Vital Processing Services LLC, the merchant-processor TSYS Inc. and Visa U.S.A. set up as an alternative to First Data Corp., on Tuesday named a new leader: Beverly Wells, the former head of Wachovia Corp.'s retail division.
Ms. Wells, a well-known figure in credit card circles, is Vital's third dedicated chief executive in its seven years of existence. She succeeded Jonathan J. Palmer, the former retail and technology chief at Barnett Banks Inc. (now part of Bank of America Corp.), who took the job in early 1999 and resigned Monday for personal reasons.
Vital's first CEO, Fred O. Gumbel, left in 1998. Philip W. Tomlinson, the president of TSYS and the chairman of Vital, filled in for eight months until Mr. Palmer was recruited. The turnover has prompted speculation that the job is a tough balancing act, in which an executive must serve two masters: Visa and TSYS, which processes for card issuers and is majority owned by Synovus Financial Corp. of Columbus, Ga.
But Ms. Wells said in an interview Tuesday that she relished Vital's connections to its corporate parents. "My perception is that Vital has the opportunity to create its own strategy and direction. It obviously relies on the experience of its two parents, but it's allowed to function independently."
The Vital that she took over looks very different from the one Mr. Palmer joined in 1999, according to Ms. Wells.
"When he came on board, this was a company, but it was more of an idea," she said. "What he did was move from a concept stage" of a bank-owned merchant acquiring processor "to an operational company that enjoys a significant reputation in the industry."
Vital processes credit and debit card transactions for retailers through contracts with merchant-acquirers, which include banks and third parties such as independent sales organizations. It says it handles one of every four electronic payment transactions in North America.
In 1997 it acquired Golden Retriever Systems, which provides support services for loyalty and affinity card programs. Three years later it expanded into the point of sale terminal management business by purchasing AMS LLC and a subsidiary, SupplyXpress, which is now called Vital Merchant Services.
At Wachovia, Ms. Wells went from running credit cards to overseeing the retail business. She says Vital's processing business is not smaller or more niche than one she ran at Wachovia, "just different." In 2001, before First Union Corp. bought it, she orchestrated the sale of the old Wachovia's $7.8 billion credit card business to Bank One Corp.
After the First Union acquisition, Ms. Wells was named the general bank product executive, a position she said she filled at the request of its former chairman, L.M. "Bud" Baker Jr., and its current chairman, G. Kennedy Thompson.
She left Wachovia in February 2002, after 26 years there, when she felt most of the challenges there were over, she said. Another issue was the 80-mile commute between her family home in Winston-Salem, N.C., and her office in Charlotte.
"Two of my most significant experiences at Wachovia were my years managing the cash management division and credit cards," said Ms. Wells, 53. "Vital provides me with the opportunity to leverage both those experiences."
She said she has already begun meeting with merchant-acquiring customers.
Ms. Wells said she welcomed the move to Tempe, Ariz., where Vital is based. Mr. Palmer, a longtime Floridian, notified the board that he planned to return to Florida to take care of family matters.
Mr. Tomlinson, the president of TSYS and chairman of Vital, said Mr. Palmer's departure was "absolutely his decision." He also said he approached Ms. Wells - whom he called a close friend for 15 years - soon after Mr. Palmer gave notice.
"I think he's a brilliant man," Mr. Tomlinson said of Mr. Palmer. "He brought us a long way with technology and service levels. He's done everything we've asked him to do."
Paul Martaus, who runs a merchant consulting firm in Mountainhome, Ark., said that Vital's ownership structure makes it a difficult company to run. "It doesn't allow anybody to be in charge."
But Ms. Wells said the parent relationships were part of the attraction to Vital. "At Wachovia, employees felt highly valued and viewed themselves as having lifelong career opportunities. I'm looking for the same thing."
As in retail banking, there are plenty of market difficulties in processing. For instance, there is stiff competition from First Data, of Denver, which is currently locked in litigation with Visa. "It's a consolidated market, very, very competitive," Mr. Tomlinson said. "The price of doing business as far as transaction pricing is getting down to levels no one ever thought were imaginable two much less five years ago."
Ms. Wells is well-versed in snags. At Wachovia, she oversaw intense bidding for its credit card portfolio, which Bank One finally won. But the First Union acquisition threw a wrench in that deal when MBNA Corp.'s contract with First Union took precedence. The Bank One sale was not rescinded, but Wachovia was forced to terminate its agent bank agreement with Bank One, pay a $350 million termination fee, repurchase $1.3 billion of receivables belonging to cardholders who were also retail bank customers, and repay part of its premium.
"That got a lot of attention in the press, but it was just part of bringing two massive organizations together," she said nonchalantly.
Lavonne Kuykendall contributed to this article.
