First Data Corp. has started a merchant acquiring business in Canada, introducing a brand there that it bought in Argentina last year.
The Denver company, the largest payment processor in the United States, announced Tuesday that it had launched Posnet in Canada, targeting merchants of all sizes.
Wayne Clarke, the senior vice president for Latin America and Canada in First Data's international unit, said in a press release that Posnet would let merchants accept credit cards, debit cards, and gift cards, including the smart cards that use the Europay, MasterCard, Visa security standard and a personal identification number.
"With Canada moving toward increased EMV/chip card usage, Posnet is prepared to ensure merchants experience a smooth and easy transition," Mr. Clarke said.
First Data acquired the Posnet name in December when it bought Argencard SA in Buenos Aires, a transaction processor doing business in Argentina and Uruguay.
The company said then it would run the business under the First Data International name, but retained the Posnet brand for point of sale services to merchants and private-label card issuers.
The big U.S. processor did not make an executive available to discuss its start-up strategy for Posnet in Canada, but a spokeswoman wrote in an e-mail message: "We are committed to continuing to expand and strengthen [the] merchant processing business around the world. Posnet is the next step in our strategy to grow our presence in Canada."
She also noted, "Not all segments of the market are served through our current partnerships. However, each of our businesses in Canada is critical to our growth and success."
Posnet offers point of sale systems, online and emerging payment services, authorization, settlement and reconciliation, chargeback administration, fraud prevention, and customer service.
First Data has a long history of joint ventures with financial companies and has fairly extensive operations in Canada. Under its Payment Card Alliance Canada agreement with Toronto-Dominion Bank, whose TD merchant services unit is a Visa issuer, First Data enables merchant acceptance of MasterCard, a spokesman for Toronto-Dominion said.
First Data also has an alliance with Credit Union Electronic Transaction Services in Regina, Saskatchewan, called Unified Network Payment Solutions. The credit union concern, which is owned jointly by Credit Union Central of Saskatchewan and Credit Union Central of Alberta, is a MasterCard processor.
The company also has subsidiaries called CardSolve International, which targets independent agents and independent sales organizations for merchant acquiring and payment processing in Canada, and Tasq Canada Technology Inc., a provider of outsourced point of sale equipment.
First Data was bought last month by the New York private-equity company Kohlberg Kravis Roberts & Co. in a $29 billion deal that took the processor private.
Tim Sloane, the director of debit advisory services at Mercator Advisory Group Inc. of Waltham, Mass., said the announcement was a reaffirmation of First Data's interest in the Canadian market, despite the fact that it is not a Canadian company.
"They have a unique set of expertise to bring to the Canadian market, around chip and PIN," Mr. Sloan said.
But he shrugged off a suggestion that the announcement is a hint of KKR's plans for the company.
"When KKR starts to put its imprint on what First Data does, it would be as part of a visible strategy to move the company forward," he said.
