By naming respected credit card banker David K. Hunt as chief executive officer, Global Payment Systems is reaching for credibility in the highly politicized merchant processing market.
The company was formed in February by National Data Corp., its majority owner, and MasterCard International, with the aim of challenging nonbank processors typified by the industry leader, First Data Corp.
National Data faced a potential image problem, in that it competes against banks in the merchant-acquiring market even as it offers to support them through the new company known as Global.
Industry experts saw the appointment of Mr. Hunt, most recently CEO of AT&T Universal Card Services, as an attempt to soothe doubts about National Data's and Global's motivations.
"National Data Corp. does compete against banks for the business of signing merchants to card processing contracts, whereas, Vital Processing does not," said David Robertson, president of The Nilson Report, Oxnard, Calif., referring to the similar venture formed by Visa U.S.A.
Visa U.S.A. and Total System Services Inc., the Columbus, Ga., credit card processor, each own 50% of Vital. MasterCard owns only 6.5% of Global, National Data 93.5%.
"The choice of David Hunt is very good, because he's a longtime, well- respected banker. He's not a technocrat," Mr. Robertson said. "He will do a good job of putting the best face forward on behalf of that company to bankers who might wonder why they ought to be doing business with a company that at the same time might be trying to (pull) customers out from under them."
Mr. Hunt said he found the competitive concerns about National Data surprising.
"Generally, we see banks as our allies and partners in this process, not only domestically, but as we go globally," he said. "Definitely, we want to channel through banks wherever we can.
"It doesn't mean if you don't have bank partners, you won't do some business directly, but I don't see our future as competitive with the banks."
Mr. Robertson said National Data will try to raise MasterCard's profile within Global Payment Systems to put member banks at ease. That would make Global seem structurally "much closer to Vital Processing Services," he said.
Mr. Hunt said there is a "terrific opportunity for Global in the marketplace," which he considers both domestic and international.
Global made its announcement about Mr. Hunt Monday. The 50-year-old executive starts at the Atlanta-based venture in January, having stepped down as AT&T Universal president in November. He was previously senior executive vice president at Signet Bank.
Mr. Hunt said he left AT&T Corp. because in "such a large company you can't move the needle."
Mr. Hunt will report to Robert A. Yellowlees, chairman of National Data and Global.
"This is a wise move," said Stanley Anderson, president of Anderson and Associates, who has known Mr. Hunt for a number of years. "David will be able to bridge the gap between the association, MasterCard, and National Data, the processor. It brings the sensitivity the banks will be looking for."
