Chicopee Municipal Employees Credit Union is one of seven institutions in Massachusetts and Connecticut that have signed on to participate in the MoneyPass ATM surcharge-free network.
A new surcharge-free ATM network is making its way into New England, with the goal of making smaller financial institutions more competitive across the nation.
So far, about seven Massachusetts and Connecticut financial institutions have signed on to participate in the new nationwide MoneyPass ATM network. All are credit unions, hoping to gain a competitive edge over their larger colleagues by luring new customers and retaining old ones with surcharge-free ATM transactions.
“The ATM is not Starbucks, where you have to pay $4 for a cup of coffee,” said Bipin C. Shah, chief executive officer of Genpass Inc., which recently launched the new network. “The whole purpose of creating a network is to be able to go to any machine, anytime, throughout the world, without having to pay for it.”
MoneyPass is looking to provide another option to local institutions that previously had as their only choice joining the national NYCE network to become members of the more New England-focused SUM ATM network, a selective-surcharge program administered by NYCE. More than 440 financial institutions and 2,800 ATMs currently participate in the SUM program. With SUM, all other SUM members’ customers can use designated ATMs without paying a surcharge, although some NYCE cash withdrawal transactions may be subject to a surcharge.
NYCE is one of the leading electronic funds transfer companies in the United States, with 2,200 financial institution participants and 55 million cardholders who have access to more than 120,000 ATMs in the NYCE network.
Shah said he believes MoneyPass will have at least half as many cardholders as NYCE within the next year.
Genpass originally launched MoneyPass to return surcharge-free access to the card-issuing institutions already in the Genpass MONEY BELT network, which is prevalent throughout many southern states. But feedback was so positive, Genpass decided to expand the system throughout the country. In the four weeks following the first MoneyPass transaction last October, more than 100 financial institutions signed on.
“Today, about 130 banks have signed up for MoneyPass, with over 6,000 machines in 47 states. We see ourselves signing another 20,000 machines in the near future,” Shah said, adding that one large bank which is “very close” to signing on will bring in close to 10 million cardholders.
“Within one year, we’ll have more than 20 million to 30 million cardholders,” Shah said. “Within one year, you’ll see MoneyPass all over the place.”
MoneyPass is managed by Genpass, the second-largest third-party ATM driver in the country and the owner and operator of similar networks prominent in the southern United States. Genpass has been driving ATMs, switching transactions and managing debit cards for more than two decades.
Pass Catching
Genpass is touting the new network to smaller institutions as a product that offers greater cardholder loyalty, gives a competitive advantage against even the largest banks, and creates less need to deploy additional ATMs. ATM owners may see increased volume and revenues, greater ATM recognition and a competitive edge in ATM placement, according to Genpass.
Smaller institutions in Philadelphia, New Jersey and Delaware have signed on to MoneyPass, and a very large institution is getting ready to sign soon in Detroit, Buffalo, N.Y., and California, according to Shah. Many food stores in the Midwest have also signed on, as well as Hard Rock Cafes across the country. In fact, the Hard Rock Cafe on Clarendon Street in Boston is one of three existing MoneyPass ATM locations in Boston. The other two are located at Longfellow Garage on Staniford Street and The Garden Garage on Lomasney Way.
One advantage of the MoneyPass system is that those who are existing members of NYCE or other networks can simply sign on to MoneyPass as well, said Shah.
“It doesn’t matter what network you already belong to. You can put the MoneyPass logo on your machine and on your cards, and you’re ready to go,” Shah said.
With banks and credit unions already having the freedom to belong to multiple networks, Genpass has no intention or need to try to link MoneyPass to other networks like SUM, Shah added.
MoneyPass may not be a prominent force in New England, but “we are coming,” Shah promised. “We have some credit unions signed on in New England, and we’ve been at it only three months.”
In Massachusetts and Connecticut, Hartford Healthcare, Chicopee Municipal Employees, Haverhill Municipal Employees, Haverhill Teachers, WG Federal, Goldmark and Plymouth Teachers credit unions have all agreed to participate so far.
“We thought, ‘now is the time for a change,'” said Deborah Beando, manager of Worcester-based WG Federal Credit Union, which is looking to completely switch from SUM to MoneyPass. “It’s up-and-coming; we thought we would be better off.”
Her credit union has had some trouble with NYCE in the past, she said. Plus, MoneyPass is more cost-efficient for both the credit union and its members.
“NYCE is not only expensive, it’s outrageous. The cost gets higher and higher in a lot of places. I understand some people have got to charge a fee, but we’re a small credit union. I’ve got to watch out for our membership,” Beando said
“We pay a lot of money to be part of the SUM network, because you have to be part of NYCE to be part of SUM,” echoed Richard Daniels, chief executive officer of Haverhill Municipal Employee Credit Union. “We don’t have our own ATMs. SUM costs $1,500 a month, while Genpass has been offering sign-up bonuses to infiltrate the New England market.”
Daniels said he doesn’t expect to see much benefit from the MoneyPass system until it gets more established, but he is optimistic. His credit union began using Genpass as its ATM driver a while ago because of better pricing.
Chicopee Municipal Employees Credit Union also uses Genpass as its ATM provider.
“Genpass is our [ATM] provider, and we’ve been satisfied with them,” said Chief Executive Officer Ken Champeau. “We look at [MoneyPass] as an enhancement to our membership. For myself, for example, I can go to Florida to Disney World and not be surcharged with this brand-new program.”
Champeau’s credit union is also a member of SUM.
“We want to have as consumer-friendly an ATM network as possible,” Champeau said, noting the fact that MoneyPass is a national program, while SUM is somewhat more local. “We’re trying to provide enhanced value for our own membership.”
Shah acknowledged that bigger institutions such as Bank of America may be a tougher sell for MoneyPass.
“But eventually, over time, they’ll come along,” Shah said confidently. “The big guys are always tough to get in the beginning.”
“A large bank is not going to switch; it’s a no-brainer,” noted Daniels of Haverhill Municipal. “If you’re a multi-million dollar bank, it would be too expensive to switch.”
But most credit unions usually don’t have that many ATM machines, though they may have a large number of cardholders, Shah noted, making MoneyPass more appealing for those smaller institutions.
Beando said she intends to spread the word to other local credit unions to encourage them to join MoneyPass. She predicted that it would take about two years before the MoneyPass logo becomes as recognizable as that of the SUM network.
“Before, NYCE was the only option in the area, and that’s who you spoke with. But it’s a matter of looking around. [MoneyPass] will catch on,” Beando said. “It’s just a matter of time.”
