Despite having sold part of its credit card processing business to a National Data Corp. subsidiary, Electronic Data Systems Corp. is no less intent on being a major force in the industry.
EDS is keeping its largest card-issuing customers, Household International and First Union Corp. And it will provide mainframe computer services to Global Payment Systems, giving Global's generally smaller customers access to a top-of-the-line system.
The transaction also means that Global, the National Data affiliate that is 7% owned by MasterCard International and that began with a merchant-processing focus, will expand into processing cardholder accounts. It will begin with those EDS is selling.
The agreement, effective Jan. 1 for the U.S. market only, calls for reciprocal marketing.
EDS customers seeking specialized services and software adjustments.
In short, the agreement promises to boost EDS' volume, while Atlanta- based Global adds a new line of business.
EDS, though No. 3 in credit card processing behind First Data Corp. and Total System Services Inc., has not kept up with their growth. The bulk of its business comes from the General Motors MasterCard portfolio.
Frank Accettulli, a spokesman for Plano, Tex.-based EDS, said it wants to be a credit card processing "boutique," distinguished by a "tailored approach" to demanding customers.
"We saw a market opportunity among midsize banks, credit unions, and S&Ls to offer a full breadth of services," said Kevin Shea, a National Data executive vice president. "The market needs an alternative to what's available," he said, saying a provider like First Data may be too big to focus attention on any but the largest clients.
Mr. Shea was quick to add that Global would welcome the business of larger banks.
On the merchant side, Global has outsourced its merchant accounting to Vital Processing Services, a joint venture of Visa U.S.A. and Total System. For new business, Global will rely on EDS.
Mr. Shea said the Global-EDS agreement takes advantage of the "core competencies" of both organizations.
"EDS is strong in providing large scale data processing installations," he said. "Global has the marketing support and product set to meet customers' needs."
Richard T. Robida, a consultant with Atlanta-based Speer & Associates, said the deal "broadens (Global's) offerings and gives them a good solid computer platform to operate on," while EDS gets additional marketing opportunities.
"It seems like a excellent alliance," said Mr. Robida. "It strengthens both companies in that marketplace."
