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Clearwater company aims to bring credit to market

It's late, you're headed home from work, but first a quick hop to the supermarket. You pick up the essentials for dinner and stand in line at the checkout. Looks like an easy getaway, but - nope. The woman in front of you pulls out a checkbook, and the agonizing wait begins. Or you're flying back into town and catch a van at the airport to the long-term parking lot. You start counting up the days you've been gone. To buy your car back from the lot will cost $60, or is it $70? It better be $60, because that's all you've got.

If these sound like scenes from your busy life, some folks in Clearwater have been dreaming up ways to make things, yes, more convenient for you. LeRoux Pitts & Associates Inc., which was bought last month by the New York-based Baby Bell, NYNEX Corp., is an innovative software company at the cutting edge of how people spend their money.

The Clearwater company designs software packages aimed at some of the last bastions of the paper-money society. Among the the bigger clients LeRoux Pitts handles are the Ralphs and Safeway supermarket chains on the West Coast. The company also has worked on airport parking systems for the three New York area airports and for Dallas-Fort Worth International Airport.

"Paper or plastic" soon may refer not to the kind of bag customers want, but how they wish to pay. As the checker scans the groceries, the customer swipes a card through a reader, punches in a code, then waits for the price to total up. Verification on leased phone lines through a central office is nearly instantaneous. Or some establishments instead receive electronic lists of lost, stolen or overextended cards into their computers daily.

Using plastic in supermarket checkout lanes is not new, but there's a reason it may catch on now. "It's switching from a convenience item for customers to a financial advantage for banks and retailers," said L. Wayne LeRoux, president of the company.

The financial advantage is that systems are faster than ever.

Faster checkouts mean happier service-oriented customers who come back again. A credit-card transaction can be completed in as little as four seconds - even faster than cash - while checks can take minutes.

About 50 supermarket chains nationwide already accept Visa and MasterCard for food purchases. But they account for less than 15 percent of all grocery stores. Because of the huge volume of sales at supermarkets, the stores are considered the last big untapped market for revenue-hungry credit-card companies.

There are barriers. Supermarkets operate on slim margins, and they do not want to pay the 1 percent transaction fee credit-card companies charge merchants on each transaction. Also, the idea of buying food on credit may be alien to people, who do not want to pay for their Cheerios months after the box is done. But for those customers who instead use their automated teller machine (ATM) cards as debit cards, the purchase may cost more, including the bank transaction charge of 75 cents or $1.

One of the nation's retail leaders in electronic funds transfer is Lakeland-based Publix Super Markets Inc. Publix is not a LeRoux Pitts customer. In addition to Presto teller machines the stores have at their front doors, terminals are being added in the checkout lanes for cards on the Honor and other ATM networks. Of the chain's 370 stores, 172 have the checkout terminals, mostly elsewhere in Florida, said spokesman Bob McDermott.

LeRoux Pitts designs specifically for clients software that is used with a variety of computer and communications equipment from other companies.

With the NYNEX purchase for an undisclosed sum, LeRoux Pitts is counting on a lot of support and growth potential. The company, which now employs 52, expects to put 75 to work by the end of the year at its wooded, campus-like headquarters in the Pioneer Center off Roosevelt Boulevard.

LeRoux Pitts projects 70 percent of its business over the next three years will come from grocery chains. Annual revenues are now about $4-million, and the 12-year-old company is forecasting sales growth of about 50 percent a year through 1992.

"Banks do not necessarily recognize software as collateral" in making a loan, said Bruce Wilson, a vice president for NYNEX Information Solutions Group Inc. in White Plains, N.Y. "With our tremendous base of capitalization, they can approach larger projects."

Of course, LeRoux Pitts is not alone. Four years ago, another Baby Bell, US West Inc. of Englewood, Colo., bought Applied Communications Inc. of Omaha, Neb., which prepares software not only for "point-of-sale" terminals but also for large bank computers and ATM networks.

At the time, Applied Communications had annual sales of $29-million. "We've grown substantially since then," said spokeswoman Judy Prusa, although the company does not give out financial figures as a subsidiary.

LeRoux, a native of Canada, left a career with IBM in 1978 to start out as an entrepreneur in Florida, which he had visited on vacations from Vancouver, British Columbia. Three years later, Ken Pitts became a partner. Pitts has since retired.

Initially, the company developed accounting systems for agricultural businesses. In 1984, LeRoux began developing software for electronic payments. Seeing the potential, LeRoux sold off the accounting systems business only a year later to focus on the fast-growing industry.

What's next in the business? In Alaska, where things are more expensive so cost-competitiveness thresholds for new technology come faster, plastic is commonplace at such places as dry cleaners. And in England, cellular phones help with the verification process on credit-card transactions for taxicabs.