Nova Information Systems Inc. has beaten two bigger competitors to win the merchant processing contract of Bank of the West.
The bank, owned by Banque Nationale de Paris, selected Nova, a midsized merchant servicer, over Nabanco and National Data Corp.
Nabanco, of Fort Lauderdale, Fla., is the largest processor of merchant accounts, and NDC, of Atlanta, is the fourth-largest, according to The Nilson Report.
In signing the five-year deal, Atlanta-based Nova strengthened its position in California, where it already counted City National Bank of Beverly Hills as a client. Bank of the West is based in Walnut Creek and has $4 billion of assets.
"Our alliance philosophy is relatively unique in the industry," said Jim Bahin, Nova's managing director and chief financial officer. "We, focus on our merchant services and attempt to form dual relationships with financial institutions."
Range of Services
Unlike major processors that use a strong sales approach to gain clients, he explained, Nova provides an array of services - back-room support, approvals, customer contact - in addition to processing. These services appeal to banks that may not be large enough to staff the programs fully themselves, and build a stronger bond between the bank and the processor.
In its three years as a processor, Nova has forged relationships with 300 banks, building a portfolio of 30,000 merchants with $3.5 billion of annual sales.
Nova executives expect the company to triple in size in less than three years. Unlike many small processors that have been swallowed up in mergers, Nova wants to become "the acquirer rather than the acquiree," Mr. Bahin said.
3,000 Merchant Accounts
Bank of the West has passed along processing and servicing responsibilities for all its 3,000 merchant accounts to Nova. Like many small to mid-sized banks, Bank of the West could not afford to invest in more advanced technology to maintain its merchant operations in-house.
The bank's executives chose Nova because of its "commitment to service," according to Frank Bonetto, Bank of the West's executive vice president.
He added that Nova had also agreed to keep six representatives in California, hired from Bank of the West's former in-house servicing staff, to maintain continuity for its customers.
Although the agreement was signed on Oct. 1, the transition will be delayed until May 31, to avoid confusion during the retailing industry's busy season.