- 48 -
The second approach, the one used by Norwest, involved direct
access to the checking (or other) account for debiting, skipping
the processing middleman. This latter approach gave Norwest
greater control over the product and its use. Although by the late
1980's the credit card processing version of the debit card product
had been used throughout the United States, it was not available in
the nine States in which Norwest competed--and thus, Norwest chose
to use the direct access approach.29
To build the debit card system and links to Visa,30 NTS, which
applied Norwest's Software Development Methodology, relied on the
Base 24 operating system that ran Norwest's automatic teller
machines (ATM's) and the Visanet module, which was jointly
developed by Visa and ACI, the vendor of Base 24. The Visanet
module was necessary to connect the Base 24 operating system to the
Visa debit card system. Norwest was the first bank to acquire,
28(...continued)
night). This requires extension of short-term credit by the
issuing bank to the customer, a risk banks generally consider
appropriate for 60 to 80 percent of their customers.
29 First Data Resources (FDR), the credit card processor
used by Norwest for its credit cards, lacked experience with the
debit card product at the time Norwest entered the market.
Further, Norwest was not comfortable with FDR's having direct
access to its checking accounts.
30 As part of their partnership in developing the debit
card system, Visa provided Norwest with technical manuals,
transaction simulators, and an access point communications
device.
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