Chase Merchant Services, Chase Manhattan Corp.'s merchant processing joint venture with First Data Corp., has won additional business from Marriott International.
Chase Merchant Services, which already handled credit and debit card processing for 240 Marriott hotels, is to extend its reach to the hotel giant's other chains, including Ritz-Carlton, Courtyard, and Residence Inn.
By the end of October, the merchant alliance is to be processing credit card transactions for more than 1,000 Marriott-affiliated hotels in the United States. The agreement runs for three years, with an option to renew.
It is the latest in a series of coups for the largest of First Data's merchant bank alliances. Last December the Melville, N.Y., operation won a five-year contract to process transactions for Dillard Department Stores Inc.
Also last year, Chase Merchant Services pried business away from a rival, National Processing Co., by landing agreements with Wal-Mart Stores Inc. and United Airlines.
Chase Merchant Services processes more than half of MasterCard and Visa credit and debit card volume in the hospitality industry. The venture brings to Marriott its "strength in technology and customer service," said Diane Vogt, chief executive officer of Chase Merchant Services. "That has earned us respect in this industry."
Marriott, which reported $9 billion of worldwide sales for 1997, said the deal was a logical extension of its existing relationship.
"We already have a track record of quality services that they provide to our full-service hotel resorts and suites," said a Marriott spokeswoman. As in other First Data alliances, First Data handles the processing, and the bank manages the customer relationships. Each owns 50% of the venture.
Observers said the Marriott contract is good news for the merchant processing division of First Data, which has been beset this year by layoffs and management restructuring. "Marriott's decision to go with First Data says they put faith in what they're doing," said Paul Martaus, president of Martaus Associates, Clearwater, Fla.
The relationship between Marriott and Chase dates from 1988, when the account was owned by Manufacturers Hanover Corp. (Chemical Banking Corp. bought Manufacturers Hanover in 1991 and merged with Chase Manhattan Bank in 1996.) Chase and First Data joined forces in 1997, when the Hackensack, N.J., processor transferred 30,000 accounts-many of them in the hospitality industry-to the joint venture.
Chase was looking for a way to return to the business of merchant processing, which it had abandoned in the early 1980s. First Data was seeking to tap into Chase's vast network of account relationships. The venture processes two billion transactions and more than $100 billion of sales volume a year.
