Fifth Third Bancorp, with a tight grip on servicing the payments needs of large financial companies and retailers, is now going after the small guy. Last month it signed an agreement to acquire 49% of Universal Cos., a privately held payment and e-commerce processor that caters to small and medium-sized concerns. The deal will add Universal's client base of 50,000 to Fifth Third's 85,000-client Midwest Payments Systems. Terms were not disclosed. Midwest Payments, even before absorbing Universal, is one of the country's biggest payment processors. It processes more than 5 billion ATM, point-of-service and e-commerce transactions per year. Most of its customers are large financial institutions and retailers, such as Kroger's and Kinkos. The deal with Universal, headquartered in Milwaukee, will give Fifth Third exposure to the smaller markets it has shied away from in its 18-year history. Universal processed more than $4 billion in transaction volume during 2000.Chicago-based MPS typically has not grown through acquisition, but this is its third deal in the past 12 months. In April of 2000, Fifth Third acquired Langhorne, PA-based ACI, an electronic payments processor. Following that deal, Fifth Third purchased New York-based Integrated Delivery Technologies Inc., an electronic banking and payments processor.When asked whether the $46 billion-asset Cincinnati-based holding company planned to acquire a larger share of Universal, a Fifth Third spokesperson said she was unable to forecast the bank's intentions. The deal is expected to close this month.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.