Coral Bay Havin’ Cash-Flow Problems

Coral Bay residents find that it’s not easy getting green.

A customer in Lily’s Market in Coral Bay recently needed cash to purchase milk and some frozen dinners. As she had done on numerous other occasions, she slipped her First Bank card into the store’s ATM for a withdrawal. Instead of cash, however, the machine produced a receipt that had “unauthorized user” printed on the bottom of it. The customer left the store empty-handed and she’s not alone.

Coral Bay residents, who have become accustomed to withdrawing money from the ATMs located in two local businesses for less than a year, are walking away from the machines cash-poor.

In fact, anyone with a First Bank or Banco Popular card no longer can make transactions at certain machines territorywide.

Defining Latin America
The sudden financial service void stems from a dispute between Automated Systems of America Inc. (ASAI), a California-based independent sales organization (ISO) that owns around 50 ATMs on the U.S. Virgin Islands, and financial giant Visa International.

“We don’t have any problems with Visa in the United States,” said Sam Sarcinelli in ASAI’s Chicago office. “But Visa International considers the U.S.V.I. to be part of Latin America, and says that independent ATM operators need special Visa International bank sponsorship for transactions down there.”

ASAI was forced to switch off access to First Bank and Banco Popular accounts in its machines, according to Sarcinelli. Scotia Bank access was never possible.

As an unaffiliated ISO—one of the largest in the United States—ASAI makes its money by charging a fee for each transaction, which is paid from the customer’s bank account.

According to Sarcinelli, First Bank and Banco Popular, which were part of ASAI’s network in the beginning, did not feel obligated pay any surcharges to ASAI.

“We didn’t make money on the machines,” he said. “In reality, you could say that the banks are behind this, because banks run Visa, and this is a way to wipe out the (bank machine) competition.”

Sarcinelli’s assertion of rivalry is based on the fact that Visa International is an association of 21,000 financial institutions around the world, including the three major banks in this region.

At press time, Visa International, First Bank and Banco Popular had not commented on ASAI’s dispute.

To Cruz Bay customers of First Bank and Scotia, this may seem like much ado about nothing, as those institutions have a branch presence there. In Coral Bay, however, there are no branches and there are no bank-affiliated ATMs, just the ASAI machines in Lily’s Market and Love City Mini Mart.

The result is Coral Bay residents without stateside accounts to draw from are back to square one: driving to Cruz Bay for money—and that can’t be making the owners of the two markets happy, either.

Businesses Affected
A cashier at Lily’s Market has seen customers walk out without buying anything because they were unable to cash-up at the ATM.

This is not lost on Sarcinelli.

“Sure, there are bank branches in Cruz Bay, but what about the guy who lives on a northeast corner of the island? These banks have a total of 10 to 15 machines on the islands, and we can serve people with 50,” he said. “It’s crazy, it’s ludicrous.”

ASAI has retained St. Thomas attorney Denise Francois to try to settle the matter with Visa International. If there is no resolution, Sarcinelli said, the company will file a lawsuit challenging Visa’s regional definitions.

“We are a U.S. company doing business in a U.S. territory. We are not an international ISO, and the U.S.V.I. is not Central or South America,” he said.

In the meantime, ASAI’s chief executive, John Steely, will be in the territory next week, trying to negotiate a deal with one of the region’s banks.

When asked if First Bank had any plans to establish a presence in Coral Bay, a spokesperson would neither confirm nor deny the possibility. A spokesperson for Banco Popular would only say that “there is a plan, but there’s nothing definitive.”