Interconnection of ATMs in sight; merger of major players still blurred

ExpressNet, one of three operators of an automated teller machine (ATM) system, said that it was open to interconnection talks with BancNet. But it set as a condition of the completion of interconnectivity with MegaLink prior to resuming talks.

Aurelio R. Montinola III, ExpressNet chairman said that they would first want all its member banks, like the Land Bank of the Philippines (LBP) and HSBC Philippines, to complete its interconnections with MegaLink. Montinola is also a senior executive vice president and chief operating officer of the Bank of the Philippine Islands (BPI).

"We are open. LBP is in the process of completing connection with MegaLink," Montinola said. "On completion, we can start interconnecting discussion with BancNet."

BancNet officials said that they were "not closing our doors." In fact, they confirmed exploratory talks regarding interconnection with ExpressLink, and that merger talks between the three ATM operators were also in its informal stage.

Officials of all three ATM operators admitted that interconnectivity between their systems and the ability of their respective members banks was "technically possible."

BancNet chairman Angelito M. Villanueva said that merger talks are in the informal stage as there were still more pertinent issues like connectivity. But he believes next year would be a better time for serious merger talks.

Villanueva is also the senior executive vice president of the Metropolitan Bank and Trust Corp. (Metrobank).

MegaLink chairman Raul de Mesa said that the merger was "inevitable" albeit it would take a long period.

"What is achievable in the near term is interconnection," he added.

De Mesa, also president and chief executive officer of the Bank of Commerce, said that MegaLink had always supported calls by the Bangko Sentral ng Pilipinas (BSP) for a merger of the three ATM operators.

In the long term, regulators and bank officials see a merger as beneficial to the banking public, the Philippine banking system, and the ATM operators.

But there are also elements within the banking system that advocate status quo versus mergers but threw their hats for interconnection between the three operators.

"There is always the danger of monopoly in a single operator or the one-switch concept, while healthy competition between three players could benefit the public in terms of services and fees," they said.

But the issue of interconnection is a closed issue. Accessibility to banking services via the ATM benefits primarily the banking public and the economy in general. And it is the lookout of regulators to protect the interest of the public first before vested or limited interests, they added.

There are an estimated 14.5 million ATM cardholders with varying access to 5,247 machines. MegaLink manages 7.6 million cardholders and operates 1,539 machines while ExpressNet manages 3.9 million and 1,849 ATMs. BancNet is responsible for 3.79 million and 1,859 ATM.

MegaLink is the open operator, meaning it is the ATM network that can also service BancNet and ExpressNet cardholders. However, BancNet and ExpressNet remains unconnected.

BancNet member banks are Allied Bank, Asia United Bank, Banco Filipino, Banco San Juan, Bangko Kredito, Centennial Bank, China Bank, Chinatrust Bank, Citibank, Citystate Savings Bank, East West Bank, Export Industry Bank, Malayan Bank, Manila Bank, Merchants Bank, Metrobank, the Philippine Bank of Commerce, Philtrust, Planters Development Bank, the Philippine Savings Bank, Rizal Commercial Banking Corp., RCBC Savings Bank, Security Bank, Standard Chartered Bank, and the United Overseas Bank.

The ExpressNet member banks are Banco de Oro, HSBC Phils., HSBC Savings Bank, the LBP, BPI Direct, BPI Family Savings Bank, and BPI.

MegaLink member banks are Asiatrust Development Bank, Bank of Commerce, Development Bank of the Philippines, Equitable PCI Bank, Equitable Savings Bank, Insular Savings Bank, International Exchange Bank, Keppel Bank Philippines, LBC Bank, Pacific Ace Bank, the Philippine National Bank, the Philippine Veterans Bank, Premiere Development Bank, Prudential Bank, Queen City Development Bank, Robinsons Savings Bank, Union Bank of the Philippines, and the United Coconut Planters Bank.