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Digital Insight Posts 41% Profit Increase Euronet of Kan. Acquires TelecommUSA SunTrust Using S1 Small-Business Tool
Digital Insight Posts 41% Profit Increase
The Calabasas, Calif., online banking software vendor Digital Insight Corp. said its second-quarter net income rose 41% from a year earlier, to $6.4 million.
Revenue rose 12%, to $52.3 million.
Digital Insight has long attributed profit growth to online bill payment revenue, and during an earnings conference call Tuesday it spotlighted a five-year contract signed last month to resell bill payment products from Marshall & Ilsley Corp.'s Metavante Corp.
"We like the security of highly predictable, recurring revenue," said Jeff Stiefler, Digital Insight's chairman, president, and chief executive, said in the call.
He also mentioned a five-year contract his company signed last month to sell an instant account opening and funding product from CashEdge Inc. of New York. In April, Digital Insight started selling a funds transfer and aggregation product that CashEdge designed at its request.
Digital Insight narrowed its full-year revenue guidance to a range of $211.5 million to $213.5 million, from a range of $211 million to $214 million.
Euronet of Kan. Acquires TelecommUSA
The Leawood, Kan., transaction processor Euronet Worldwide Inc. has bought TelecommUSA Ltd., a Charlotte company whose offerings include a card used to initiate money transfers at automated teller machines.
The purchase was announced Wednesday. Euronet would not say how much it paid.
Daniel R. Henry, Euronet's president and chief operating officer, said the card "fits hand-in-glove" with his company's network of 7,000 ATMs worldwide. "We can take this product into places that have not been targeted before in the money transfer industry."
Since Euronet puts its machines in nations without widespread ATM coverage, the TelecommUSA card would be a new concept to its target end users, which include the unbanked, he said. "We see this as a very exciting way to get a plastic card into somebody's hand" and use that to introduce banking products and services.
SunTrust Using S1 Small-Business Tool
SunTrust Banks Inc. has started offering small businesses an online cash management system from S1 Corp., an Internet banking software vendor that, like SunTrust, is based in Atlanta.
S1 announced last week that it is hosting the S1 Business Banking system and has signed up SunTrust to use it.
David A. Saporito, a senior vice president and the head of product management and development for business and commercial products at SunTrust, said most of its business customers with annual revenue of less than $10 million previously used the same online cash management system as retail customers. A handful of small-business customers used a system designed for large businesses.
But National Commerce Financial Corp. of Memphis, which SunTrust bought in October, offered a small-business cash management system. After the purchase "we knew we had to have one in place for the conversion of those clients," Mr. Saporito said in an interview this week.
SunTrust, which will outsource the operation to S1, selected the new system for its "robust functionality," he said.
The system lets business owners control various employees' access to accounts. This capability is common in heavy-duty corporate systems, but less common in software designed for smaller companies, Mr. Saporito said.
The S1 system lets business owners see a consolidated view of the company's accounts at its bank, including depository accounts, installment loans, and lines of credit. It also supports online bill payment for corporate users.
"There's still significant demand for bill-pay among those clients who need cash management," said Sonya Crites, the manager of SunTrust's online solutions team for business and commercial products. "That's a differentiator for us."
The new system has been well accepted by customers, Ms. Crites said. She would not say how many companies are using it, except to say, "It has exceeded our expectations, let's put it that way."
Mr. Saporito said SunTrust converted National Commerce's customers to its systems in April and is putting new small-business customers on the S1 system. SunTrust plans to convert the rest of its customers in the first quarter, he said.
It runs most of its systems, from a variety of vendors, in-house and will eventually consider bringing the S1 system in-house, as well, though not for at least a year, he said.
