Arkansas Systems acquires Visa authorization software.

With one eye on the future and the other on the present, Arkansas Systems Inc. recently acquired Visa International's card authorization and processing system.

The system, formerly known as Vicaps, is designed for the IBM AS/400 platform used for small credit card programs.

The addition of the software -- renamed Integrated Credit Card System -- to Arkansas Systems' Integrated Transaction Management Solution payments system will enable the company to offer comprehensive payment processing to financial institutions.

According to Bruce Hobbs, director of bank card system sales for the Little Rock-based firm, the future of plastic may be an all-for-one card, functioning as a credit, debit, and automated teller machine card.

If that industry conversion occurs, said Mr. Hobbs, Arkansas Systems will have the software available to offer to its customers.

The acquisition will also give the company an edge right now, by enabling it to function as a full-service shop in payment processing

"We're a software provider that lets banks do it for themselves," said Mr. Hobbs.

The company has concentrated on ATM and debit point of sale transactions in the past.

Arkansas Systems specializes in setting up in-house systems for community banks seeking a more cost-effective alternative to outsourcing.

Banks can spend from $150,000 to $250,000 to install software and get the system going, said Mr. Hobbs.

Visa wrote the credit card payment software in 1989 to entice small banks launching credit card programs to become Visa members. As those businesses progressed, Visa began .receiving requests for payment systems for other bank functions.

Visa licensed the software to Arkansas Systems "to better serve our members and provide them services from a vendor that already had products available for the AS/400," said Christine Beckstead, vice president for Visanet Processing Systems.

The software accommodates portfolios of up to 100,000 accounts. Ms. Beckstead said that typically members with small credit card programs use third-party processors. "It's much more cost effective for members to bring [processing] in-house," she said. She also pointed out that customers gain functionality, flexibility, and control over their programs.

Ms. Beckstead stressed that Visa is still very involved with card processing and will continue to be. "This was a small niche [for Visa] as a software vendor, it's not typically what we do."

According to Charlie Stuart, client representative for International Business Machines Corp. in Little Rock, the Visa card processing software is the only one listed in IBM's Solutions data base that is compatible with the AS/400 platform.

Mr. Stuart said the acquisition would broaden the company's capabilities. "They're positioning themselves to be full players in the world of electronic transaction payment," he said. "They've got all the aspects covered."

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