ITS Inc., which runs the Shazam network of ATMs, has established a Shazam Inc. holding company and will consolidate its wide range of card-related businesses under the Shazam name.
The 15-year-old regional debit network is the highest-profile unit at the Johnston, Iowa-based organization.
Executives at ITS have worked hard to keep the debit network -- the nation's 16th largest -- from becoming a casualty of the regional network merger maria that has reduced the number of players to about 50 from more than 100 only a few years ago.
ITS's survival Plan has hinged on diversifying beyond automated teller machine and debit point of sale transaction switching services into other electronic funds transfer businesses, such as credit card processing.
Now, the consolidation under the Shazam name takes that diversification to the next stage of its evolution.
"We feel that this consolidation will allow our network to continue to grow and provide greater opportunities to community financial institutions in the Midwest," said Dale Dooley, president and chief executive of Shazam.
Mr. Dooley emphasized that all of ITS's products and services by ITS will continue to be offered under the Shazam name.
In addition, Shazam Provides automated clearing house links, data communication network services, credit card issuance, and merchant processing services for member institutions.
One significant change accompanying Shazam's reorganization is the diversification of its Ownership.
Until a few months ago, the company was owned entirely by financial institutions based in the network's home state.
As part of the consolidation, Shazam has opened ownership to financial institutions in other states. And it will operate as a not-for-profit entity that takes input on strategic decisions from all its owners.
While some in the industry believe the not-for-profit structure can make for slow decision-making in an era that demands the opposite, the doubters need only look at the Star System Inc. in California for proof that cooperatively owned networks can function well.
Star, based in San Diego, is by some measures the largest regional debit network in the nation. It is also one of the more progressive, leading the charge on such services as debit POS and check authorization.
"As the first board member from beyond the Iowa border, I can attest to the benefits of expanded ownership," said Leland Walker, president and chief executive of First National Bank of Platte County in Kansas City, Mo.
Shazam executives declined to predict the transaction or membership growth that would result from the new structure.
They said, however, that the network is looking for networks with which to merge.