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IGA PUSHING COMPETITIVE ON-LINE DEBIT, CREDIT SERVICE

CHICAGO -- In an effort to achieve companywide acceptance of credit and debit payment options, the Independent Grocers Alliance here is launching a program offering its retailers on-line transaction services at competitive rates.A number of newly signed IGA retailers will begin accepting credit and debit transactions this month, according to a source familiar with the situation."Some of our retailers

Deena Amato-Mccoy

September 22, 1997

2 Min Read
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DEENA AMATO-McCOY

CHICAGO -- In an effort to achieve companywide acceptance of credit and debit payment options, the Independent Grocers Alliance here is launching a program offering its retailers on-line transaction services at competitive rates.

A number of newly signed IGA retailers will begin accepting credit and debit transactions this month, according to a source familiar with the situation.

"Some of our retailers are strong enough to handle the costs of accepting credit transactions," said Larry Willis, president and chief operating officer at the IGA. "This service will allow our individual retailers who are not currently processing on-line transactions to begin to do so at a competitive per-transaction rate."

According to a source at the IGA, retailers accepting Visa and MasterCard will pay a transaction rate of 1.19%. Novus card fees will be 1.15%, and debit transactions will cost 9 cents each.

According to Willis, accepting credit and debit transactions will strengthen the IGA's brand image. "If a consumer is used to paying for groceries with a credit card and the IGA retailer does not accept them, that could hurt us," he said. "It is an added value we can provide to our retailers as well as our customers."

Currently, 67% of IGA stores handle Visa and MasterCard transactions, 53% accept Discover cards and 47% accept debit cards, said Willis.

"Roughly 70% of our stores handle card transactions, but it is the remainder of our members that are our responsibility to get the program in place for," said Willis.

Sources say the addition of card transactions could reduce expenses to retailers who currently accept cash and checks only.

"Credit and debit transactions are a secure payment method, especially when customers use a personal identification number to make a payment at the point of sale," said a source familiar with the situation. "These on-line transactions will also allow the retailers to eliminate costs associated with bounced and counterfeit checks."

"Unlike the shrink stores incur when they accept bad checks, there is no debt connected with credit transactions," Willis explained.

The IGA's push for acceptance of card transactions by all its retailers coincides with the introduction of its co-branded credit card, the IGA Hometown Proud Novus card, launched late last month in almost 800 stores nationwide.

"With the launch of our co-branded credit card, the timing could not be better to offer this program to our retailers," Willis explained. "Stores that do not handle card transactions cannot support the new IGA credit card. This is one more reason for them to start supporting credit and debit transactions."

The IGA is partnering with Mellon Network Services, a division of Mellon Bank Corp., Pittsburgh, to provide the on-line POS gateway that will allow IGA customers to use Visa, MasterCard, Discover or debit cards to purchase groceries at checkout.

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