Total System Services' (TSS) planned $1.4 billion acquisition of prepaid card company NetSpend will give it direct access into consumer's wallets. This shift in TSYS' DNA will alter how the company does business — with both its competitors and its existing customers.

The acquisition, which will be completed in the in the middle of 2013, is the second that it’s made in recent memory. Last year, TSYS acquired ProPay, giving the payment processor a Square competitor in the ProPay Jack.

"The acquisition [of NetSpend] doesn't necessarily make the processor a closer competitor to its bank customers," says Madeline K. Aufseeser, a senior analyst with Aite Group. "What this enables them to do is now go to existing clients, bank clients of TSYS that are not in a prepaid business, and offer them a turnkey, white-label solution."

This isn't the first time a processor has bought a consumer-facing company, says Jim Van Dyke, chief executive and co-founder of Javelin Strategy & Research, a division of Greenwich Associates.

"First Data has purchased several consumer-facing companies. Western Union is just one, and they were eventually spun off," he says, in an email to American Banker. "At the end of the day it's hard to serve multiple constituency groups. One audience (bank, merchant, consumer, etc.) generally becomes the more predominant audience. For example, by most Javelin research measures, Visa is the most trusted brand with all US consumers (followed by PayPal, MasterCard and then American Express), and Visa certainly has a strong reputation with its issuing banks. Yet it's impossible for any one entity to be number one with all audiences, and the merchant community does not feel as much love for card brands as the issuing banks do."

He adds that PayPal is also working to serve both merchants and consumers, though in the end they might be best at serving casual payment acceptors and micro-merchants.

That, however, shouldn't diminish what the TSYS-NetSpend merger means to both companies.

"A back-end processor literally buying into the fastest growing area of customer-facing payments is significant," says Van Dyke. "What TSYS must now do is go from being brilliant at the geeky systems side of things to being a leader in consumer marketing, and many companies do not make this turn successfully. Only time will tell if TSYS can do it."

To other processors, TSYS is sending a clear signal: Watch your back.

"It does make them a significantly heavy hitter, for sure," says Nick Holland, a senior analyst at Yankee Group. Competitors must "pay attention, because there are other players in the market that are becoming more viable."

In addition, the acquisition begins to bring some parentage to the once-unruly prepaid card market, says Brian Riley, a senior director in the cards and retail banking practice at CEB TowerGroup.

"It's another way that the prepaid business is getting legitimized," he says. "I think TSYS has been a very well-run company and they are lifting NetSpend up to a higher standard than they had before."

Other recent high-profile debit card deals include American Express's launch of its BlueBird account and JPMorgan Chase's rollout of its Liquid prepaid cards.

Regulators, too, will inevitably take notice of the maturing market, says Riley.

"I think the CFPB has less to worry about," he says. "Where NetSpend was kind of an upstart company on its own, working in Texas, with very limited disclosures, now they are entering the world of TSYS, which has withstood many regulations, many deep looks at their financials."