When the biggest regional branch of Russia's Promstroybank launches a debit card system, much of the operation may be based on methods used by the Bank of Butterfield.

"We wanted to see the fresh experiences of the Bank of Butterfield and its Island Card system, we wanted to understand the tiny details associated with starting such a system, we hope this visit will help implement our card system efficiently,'' said Mr. Alexander Stepanov, vice director of the Magnitogorsk branch.

Representatives of the Magnitogorsk regional branch of the huge Promstroybank of Russia, met earlier this week with Bank of Butterfield representatives to discuss the immense task of implementing a debit card system.

"We chose to visit the Bank of Butterfield because they recently introduced the IslandCard ... it is better to see something once with your own eyes than to hear about it many times,'' added Mr. Stepanov.

The Promstroybank plans to implement its debit card system by September 1995 and eventually offer VISA and Mastercard credit services.

Mr. Stepanov estimated it will cost about 10 billion rubles ($3 million) to implement the system but the bank should recoup its initial costs in about two years with merchants charged a fee in connection with the use of the debit card.

"We wanted to look at the Bank of Butterfield card system, they have just introduced a new card, (Island Card), and we wanted to see how it worked soon after its was started,'' he added.

The group of five Russians discussed topics from implementation to marketing, and from education of bank staff and employees, to security, said Mr. Steve Marklew, senior marketing manager at the Bank of Butterfield.

"These members represent a bank which is starting a card service operation from the ground up,'' he added.

"We discussed not only the nuts and bolts, how to structure the implementation, the marketing, the kind of people who should be involved, we even discussed risk management associated with a debit/credit system,'' said Mr. Horst Finkbeiner, assistant manager, electronic banking.

A debit card system will allow customers to buy goods without cash changing hands, the amount is debited from the appropriate account, explained Mr.

Philip Harrison, senior manager of European sales for Applied Communications Inc.

Introducing a debit system is linked to increased privatisation, huge inflation, foreign companies making inroads into Russia, increased crime and even sheer volume -- the physical "space'' taken up by money has become Russians studying local bank From page 10 money needed by the just the steel works alone for its payroll.

According to Mr. Harrison, the steps necessary to set up a debit card system are practically identical to those involved in a credit card system.

"The Bank of Butterfield's new card is a credit card but the marketing and operational factors are similar,'' he said.

ACI Ltd., is a UK-based subsidiary of ACI Inc., based in Omaha, and provides software to over 700 banks worldwide.

About 60 percent of the world's electronic banking transactions are linked to ACI software and the company is a consultant and a supplier to the Promstroybank.

Mr. Graham Villis, formerly employed with the Bank of Butterfield and now a consultant with ACI, connected Russian bankers with the Bermuda bank.

"Many banks in Europe implemented card services 20 years ago and the Russian delegation felt it would be best to speak with a bank that started a card service recently,'' he noted. Though the industrial environment is a stark one, the people of Magnitogorsk "have a fierce pride in their city,'' remarked Mr. Villis.

The Magnitogorsk bank branch serves 500,000 people in a region located at the southern end of the Ural Mountains near the Kazakhstan border.

The steel works at Magnitogorsk, largest of its kind in the world, employs 62,000 people and the company itself is a bank client.

The city, because it straddles the Ural River, is only one of two cities in the world, the other is Istanbul, which can say it is located in Europe and Asia.

RUSSIAN VISITORS -- (From left) Mr. Vitali Valeev, manager at Compass Plus, the card processing centre for the Magnitogorsk region of Russia, Ms Valentina Chernova, a manager at Magnitogorsk regional bank, Mr. Graham Villis, ACI Inc.

consultant, Mr. Horst Finkbeiner, assistant manager electronic banking, Bank of Butterfield, Ms Tatiana Kartavtseva, director of the language institute in Magnitogorsk, Mr. Alexander Stepanov, vice-director of the Magnitogorsk branch of Promstroybank, Mr. Steve Marklew, senior marketing manager, Bank of Butterfield, Ms Olga Demini, of Compass Plus, and Mr. Philip Harrison, senior manager European sales, ACI Inc.