Bank of Butterfield ATM card holders will later this year be able to make purchases without using cash, credit cards or cheques, thanks to MasterCard International's Maestro debit service.

The bank and MasterCard announced the new debit service -- which allows retailers to debit a customer's bank account through the shopper's ATM card -- at a press conference yesterday.

Debit card holders from overseas are now able to use the cards at a number of Bermuda's restaurants and stores, with the service expected to be made available to Bermuda residents this fall.

"Bank of Butterfield and MasterCard have worked together over the past three months to develop an implement the service,'' said Mr. Colin Furr, senior vice president, banking, at the Bank of Butterfield.

"We are delighted to be the first bank to bring this service to Bermuda which will provide our customers with the most advanced and innovative payment option in the world.'' Maestro, a service launched by MasterCard less than three years ago, is the world's largest debit card programme with 1,367 financial institutions participating in 31 countries. Over 93 million people have ATM cards with the Maestro debit service feature.

Phase one of the Bermuda service includes 25 merchants.

Participating stores, including retailers and restaurants, will get their first taste of the debit card experience as MasterCard executives, due to attend their Latin America & Caribbean regional conference here tomorrow and Monday, will be carrying ATM cards embossed with the Maestro logo.

The number of stores taking part in the pilot project will be expanded over the summer months, the bank said.

"The second phase of Maestro's introduction will involve issuing Maestro cards to qualified Bank of Butterfield customers,'' said Mr. Furr.

"With Maestro, customers will use their existing PIN number to access bank accounts, providing a quick, easy and secure way to pay for purchases.'' The service also has an advantageous exchange rate for purchases made outside the card holder's home country.

To make a purchase, a consumer presents their ATM card to the store, the clerk then swipes the card through an electronic terminal and enters the purchase amount. Customers then enter their PIN number.

The customer's account will be debited in under five seconds from anywhere in the world the service operates.

Maestro is accepted at 500,000 locations world-wide, 35,000 of them in the US.

By introducing Maestro, the Bank of Butterfield joins 34 of the world's top 100 banks like Chemical Bank, the fourth largest bank holding company in the US; Wells Fargo, the second largest ATM card issuer in the US; and Key Bank, the 11th largest consumer finance company in the US, as participants in the service.

"Maestro will streamline checkout procedures by eliminating cheque handling.

It will also reduce the amount of cash in store registers and, upon approval, guarantee payment,'' the bank said.

The cost is anticipated to be less for the customer than cheque writing and less for the retailer than credit card service but MasterCard executives, at the press conference, declined to be specific about fees associated with the use of the service.

Maestro is not a substitute for a credit card, and more likely to be used for purchase of lower-priced items, but the card may in future include a "cash back'' feature.