First Data Corp. has been marching into Europe to try to replicate its dominance in U.S. card processing, but the going has been rough.

The Atlanta company, which recently renamed its European subsidiary First Data Europe to mark what it hopes will be a fresh start for the 10-year-old operation, says that each country in Europe handles card processing differently, and banks are reluctant to break their old habits to convert to a U.S. vendor.

"All the markets have these idiosyncrasies, and someone will take the role of pulling all this together," said Gerald Hawkins, chief executive officer of First Data Europe. Mr. Hawkins, a Briton, works from the division's headquarters in Basildon, Essex, England.

Some countries, like Spain, use their own technical standards, and some rely far more heavily on debit cards than credit cards. France and Germany already rely heavily on smart cards and are busy converting to the EMV (Europay/MasterCard/Visa) standard for chip products, while other countries, including the United Kingdom, are just now getting geared up for chip card use.

Mr. Hawkins portrayed the processing arrangements in Europe as old-boy networks that have welcomed neither change nor American captains of industry.

First Data's chief rival in the United States in processing for card issuers, Total System Services Inc., has also been trying to build its business in Europe, and has met with similar hurdles. Both Total System and First Data have focused first on the United Kingdom, because of its cultural similarities to the United States, and have only more recently been reaching out to the Continent.

"Some of these marketplaces have been used to a comfortable existence and a very static situation," Mr. Hawkins said. "Change is not part of their agenda. But the world is changing around them, and they will find it increasingly difficult to play in the game."

First Data processes 28 million card accounts in Europe, the bulk of them in the United Kingdom, where the company has enjoyed the most success. There have also been some gains in Germany, the Netherlands, and Spain, where First Data has begun processing fuel card transactions for several banks that are not members of the Sermepa network, which is owned by Visa Espana.

Some European bankers said in interviews that they saw no benefits to switching to First Data.

"One of the mistakes that American companies make in coming into the U.K. or elsewhere in Europe is to presume that the market dynamics, structure, and so on follow the American model," said Ian Spencer, head of card fraud prevention at Barclays Bank PLC of London, one of Europe's largest card issuers, which handles the processing for its eight million credit cards internally. "It is my experience that each European country is more or less unique."

Mr. Spencer said Barclays talked with First Data Europe, but decided to stick with its in-house system for two reasons: "Cost and quality," he said. "It is a question of the right quality at the right cost."

Jose M. Gabeiras, chief executive officer of Sermepa, which is jointly owned by Visa Espana's 157 member banks, said Spanish banks also saw little appeal in the foreign offerings. "The custom in Spain is not to outsource anything," he said. "Our system is efficient and profitable. There is no demand for outsourcing services like FDR offers."

Mr. Gabeiras said that both First Data Europe and TSYS Europe (Total System's European subsidiary) have approached Sermepa banks, but that he does not foresee losing significant amounts of businesses to them.

Mr. Hawkins says that he has a series of tough sells in countries across Europe, but points to some encouraging signs. New banking regulations may help First Data and other foreign processors gain toeholds in countries where they have been locked out by bank-owned payment card processors, he said.

Perhaps more important, as European countries continue their migration to the euro and smart cards there will be more demand for interoperability and a common platform, Mr. Hawkins said. He foresees a trend toward a "U.S.-type model, where all the national barriers in regulation are taken down."

In the past, credit card association rules in Europe required that issuers and acquirers have a physical presence in countries where they did business, he said. For countries with smaller card portfolios, that has meant that processing and acquiring has been left to local processors jointly owned by domestic banks.

TSYS Europe is headquartered in London, and all 7.5 million accounts that the division handles emanate from two banking companies, Royal Bank of Scotland Group PLC and Allied Irish Banks. TSYS Europe is a subsidiary of Synovus Financial Corp., the Columbus, Ga., company that owns Total System.

Part of TSYS Europe's plan is to use a newly opened U.K. data and customer service center to allow U.K. clients to begin acquiring card accounts elsewhere.

"We see a need among European banks to have more functionality within their own business," said Bruce L. Bacon, managing director of TSYS Europe. "We could help U.K. banks move into other countries."

The United Kingdom has about 42 million credit cards and 46 million debit cards issued; the rest of the European Union combined issues 25 million credit and 184 million debit cards, according to data provided by First Data.

Europe is in the midst of a "very major technology transition," Mr. Hawkins said. "There is a role for somebody to integrate this together. We understand chip, we understand euro. We are very well positioned."

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