WEGMANS PLUGS IN NEW CARD-TRANSACTION PROCESSOR

ADAM BLAIR

ROCHESTER, N.Y. -- Wegmans Food Markets here has chosen a new processor for its electronic credit- and debit-card transactions. The 54-store chain cited a competitive fee structure and the option of establishing a direct computer link between the retailer and the processor as reasons for the change.

Wegmans' new contract is with Midwest Payment Systems, a subsidiary of Fifth Third Bank, Cincinnati. MPS processes both automated teller machine and point-of-sale transactions for more than 1,100 financial institutions and 25,000 merchants worldwide, according to a statement.

"They offered a very competitive fee structure, and they are oriented to the needs of a large retailer," said George Hood, director of electronic banking operations at Wegmans. "In addition, they offered the opportunity for a direct host-to-host link between our computer system and theirs."

Hood did not reveal specifics about the volume of Wegmans' credit- and debit-card transactions, but said that together they totaled more than 10% of sales. "Both credit and debit transactions are growing at a healthy rate at Wegmans," he said.

Wegmans, which has accepted credit cards for payment since 1988, previously used a merchant bank for its credit- and debit-card processing, said Hood. "We became aware that many merchant banks themselves use third-party processors for these transactions, so the ability for us to have a direct link was a plus," he said.

The retailer began the transition to MPS in mid-June, when it moved its credit-card transaction settlement process to the new company, said Hood. The next phase of the transition involves establishing the host-to-host interface between Wegmans' and MPS' computer systems.