NEW YORK Chase Manhattan Corp.s credit card subsidiary has agreed to buy the commercial credit card operations of the Dallas electronic payments processor Paymentech Inc.
Paymentechs commercial card unit, based in Salt Lake City, has issued more than 230,000 Visa and MasterCard commercial cards with about $2 billion of annual charge volume. Chase said it will buy the accounts, plus $200 million of receivables, and will probably offer employment to all Paymentech commercial card employees.
The transaction is expected to close in the first quarter, pending regulatory approval. Terms were not disclosed.
The commercial card industry represents a tremendous growth opportunity for Chase, said Richard Srednicki, the executive vice president in charge of Chases credit card business. This strategic purchase brings us the industrys first robust Internet-based administration and reporting platform, called PaymentNet, and it also brings us the people necessary to take full advantage of one of the fastest-growing segments of the payment systems industry.
Lorraine Hricik, executive vice president of Chase Treasury Solutions, said deal would make Chase a premier provider of commercial cards. The capabilities of the Paymentech unit will allow Chase to offer our customers improved e-procurement solutions to streamline payment, reconciliation, and data integration for business-to-business purchases.
Bank One Corp. owns 52.5% of Paymentech, and First Data Corp. owns the rest.
We are extremely excited about the opportunity to become part of the Chase organization, said James W. Baumgartner, who heads Paymentechs commercial card operations. In just five years, we became a recognized industry leader in commercial card payment technology and service. The combination of Chases customer relationships with our platform will clearly position Chase as a leading provider of commercial card programs.
Chases credit card portfolio has more than 20 million accounts and better than $34 billion of loans outstanding. Chase is the fourth-largest bank card issuer in the United States, and its joint venture with First Data is the largest merchant acquirer in the country.