MAC—Philadelphia National Bank’s Strategic Venture in Shared ATM Networks

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Abstract
Philadelphia National Bank (PNB) launched MAC, its shared Automatic Teller Machine (atm) network service, in response to a threat from Girard. Girard had introduced George, the first major atm offering in Philadelphia, and hoped it would provide competitive advantage in retail banking; PNB used MAC to counter this threat. Despite Girard’s scale advantage and first-mover effects, PNB was able to attract enough banks to MAC for MAC to dominate and eventually merge with or acquire all other atm netwoiks in Pennsylvania. Several factors explain why PNB succeeded with MAC, and why the ownership structure of MAC is unique among the major shared atm networks in the U.S. Among these, timing is key—MAC emerged before the other shared atm networks, and before the critical importance of atm service was evident. Contrasting the structure of atm networks with other electronic distribution channels, and comparing the profitability of providing each, offers valuable insight into the power associated with the channel provider under different conditions.

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