Executives of Total System Services Inc. aren't worried about the diversification moves of giant rival First Data Corp. They're too busy processing.

During a recent discussion of his company's very good fortunes, the chief executive officer of Total System Services Inc. was reluctant to mention his biggest competitor.

"They're friends of mine -- I won't say anything nasty about them," Total System chairman Richard W. Ussery said when his credit card processing archrival, First Data Corp., came into the conversation.

But the courtly Mr. Ussery, who has led Total System since before it became a stand-alone company in 1983, inevitably let his guard down. He believes the contrasts between the two put Total System in the better light.

"They are our competition," Mr. Ussery said. "But we don't spend a lot of time worrying" about First Data's forays into areas outside Total's credit card-related concentration.

"We continue to be focused on being absolutely the best at what we do, with the best technology and flexibility and quality of service," he said.

The word "focus" continually creeps into any conversation with Mr. Ussery and his lieutenants. They say they have not lost sight of "the mission" since their card processing operation was a department within Columbus Bank & Trust Co.

The Georgia bank's parent, Synovus Financial Corp., still owns 80% of Total's stock, and it hardly could have invested better.

But in recent months, even as Total maintained its steady growth course and split its stock for the fourth time, First Data has been making a lot more headlines.

Most have had to do with acquisitions, topped off in early November with a $680 million agreement to acquire the merchant processing company Card Establishment Services Inc.

First Data's aggressive growth as a diversified payment and transaction processor with $1.5 billion of annual revenue, and the attendant marketing and publicity, tended to overshadow Total, which should end this year with about $180 million of revenue.

First Data has more than 22,000 employees, including 8,000 in its Card Services Group; Total System recently passed 2,000.

This is where Mr. Ussery emphasizes "focus." Nine-tenths of Total's revenue comes from credit card processing.

That makes Total's stock "the purest play of all the payment processors on credit cards' replacing cash and checks as a means of payment," Montgomery Securities analyst Richard Weingarten wrote in a report earlier this year.

(To make that play, an investor would have to buy into a price-earnings multiple approaching 50, which led Mr. Weingarten to conclude, "There is better value elsewhere.")

First Data does not disclose line-of-business revenues, but less than half the 1993 total is believed to have come from bank card activities comparable to Total System's.

Mr. Ussery went so far as to call First Data's diversification "high risk" -- strong words from someone who didn't want to make his competitor the center of attention.

After all the notice First Data has been getting, "maybe not enough people have been vocal on the other side of the issue," Mr. Ussery said in an interview last week in the depot, the old Columbus, Ga., railroad station that has been converted into company headquarters.

"We're basically in the information business," Mr. Ussery said. "We have huge data bases, we connect a network of over 70,000 terminals, we're the largest first-class mailer in the Southeast -- that should tell you something about what we know and do well."

"Diversification" is not absent from Total System's vocabulary, but as written in its 1993 annual report, it will be "in ways that will complement our core business." Any acquisitions will be of "companies related to our core services."

"We decided a few years ago that we were going to be as good as we can be in credit card processing," Mr. Ussery said.

The company made two relatively small acquisitions in 1992 -- of Mailtek Inc. and Lincoln Marketing Inc. -- which improved its direct marketing and mailing capabilities. In 1994, Total added Columbus Productions, a printing company formerly owned by Columbus Bank & Trust Co.

Total has worked with Florida State University on a pioneering student identification-payment card, which could lead to more debit card and electronic purse ventures; and it does the statement processing and mailing for the Delta Airlines Frequent Flyer program.

"We could go in a lot of directions," Mr. Ussery said. "Our core skills can work well in a lot of areas and a lot of industries."

He cited health care, cable television, cellular telephones, and an existing credit card client, Circuit City: "All do 30-day billing, which we are very good at, and much of what they do is less complicated than what we have always been doing."

Lest one get the impression that Mr. Ussery and his team are distracted by diversification temptations, he said, "Over the next five years, our core business will provide a nice amount of growth, and beyond that there will be international and diversification opportunities.

"For the last 12 years, it was all we could do to keep a handle on growth and make sure we did not bite off more than we could chew."

Growth has been especially keen since 1990, the year AT&T Corp. launched the Universal Card. Total System won the processing contract -- since renewed for a second five years -- and Synovus opened a subSidiary, Universal Bank, to be the MasterCard and Visa issuer.

If Total manages to surpass $175 million in revenue for 1994, which would hit Mr. Ussery's 15% growth target, it will approach a tripling of the 1989 figure of $66 million.

In 1993, AT&T Universal accounted for one-fourth of revenues, NationsBank Corp. another 12%. This year, BankAmerica Corp. came into the fold, for processing of both its consumer and merchant accounts.

Bank merchant customers served by Total jumped by 100,000 in recent months, to 375,000, largely thanks to BankAmerica.

To keep this up, Total wants to add one of the top 10 credit card banks to its customer list every 18 to 24 months -- another goal in the strategic plan.

That would be a scary prospect if not for TS2, the new software that has been the company's back-office preoccupation for the last few years, on which it has spent more than $30 million in development and related costs.

The legacy system, TS1, was built to process 25 million card accounts and was enhanced to handle the current 45 million, Mr. Ussery said.

Total decided that instead of trying to build on top of the old platform, it would engineer a system from scratch, based on client consultations and extensive research.

"We discovered there was no software in the market that could meet the needs of the future, and we are convinced that TS2 gives us that technological advantage," Mr. Ussery said.

The birth of TS2 took longer than expected, but by October, First Omni Bank of Millsboro, Del., and its 800,000 accounts were converted.

Mr. Ussery said energies in 1995 will be devoted to bringing the big three clients -- AT&T, BankAmerica, and NationsBank -- onto TS2.

"That should give us enough momentum to take on the rest of the base [more than 110 institutions] by 1996 and add new business," Mr. Ussery said. "In 1994 we built a foundation and stabilized it for the next growth spurt."

He said TS2 is not just a quantum leap in features and functions -- for one, banks will easily be able to make and implement marketing and pricing decisions -- but will be able to accommodate at least 250 million accounts.

That would be about 10 times the number of accounts of the largest U.S. card issuer, Citibank, and three times the number First Data processes.

"We feel any issuer is a prospective client," Mr. Ussery said. "I think the market sees that with clients that include AT&T, NationsBank, and GE, we can accommodate some very large issuers with the highest quality and productivity."

As he views the card-processing market, First Data controls' 23%, Total System has 19%, and 48% is still operating in-house -- up for grabs by First Data, Total, Electronic Data Systems Corp., and perhaps a few smaller servicers.

"There are still plenty of opportunities for both [First Data and Total] to continue to grow," Mr. Ussery said. "And while they [First Data] are out to conquer the world, we think we can take some of their accounts out the back door."

Like First Data and EDS, Mr. Ussery has an eye on international outlets for Total's "core expertise."

"We have a lot to offer," he said. "Our technology is five years ahead of what you find in much of the world, and 10 years ahead in the case of Mexico," where Total has entered into a joint venture to process credit cards for the Prosa banking association.

"If there are international opportunities, it will be through alliances," Mr. Ussery said. "There is little interest in having an American company come in and hang out its shingle... We think what we are doing in Mexico could be a model for other parts of the world."

Mr. Ussery added that alliances will also be prevalent at home. He said his relations with the MasterCard and Visa associations have never been better -- Total has enthusiastically supported their debit and commercial card efforts -- and Total is in joint marketing agreements with Deluxe Data Systems in electronic funds transfer services and National Data Corp. in merchant processing.

"We are approached by a lot of people who want to be our partner, which is very flattering to us," Mr. Ussery said. "We'll be selective and do what is right for our clients... And you might see us quietly make some acquisitions that are natural extensions of what we do.

"You won't see us spending $1 billion over a year or two making acquisitions. We feel good about what we are doing and we'll take our chances on being able to compete against anybody."

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