Transaction Network Services Inc. said it has acquired a majority equity interest in a company that gives it a foothold in Scandinavia.
Transaction Network Services, known as TNSI, provides telecommunications links to the merchant processing industry. The Reston, Va., company said its purchase of 75% of Pronoma Systems, Stockholm, was concluded last month. The companies did not disclose the terms.
The acquisition fits in with plans by TNSI to expand internationally. The company has indicated it wants to expand its business as a provider of telecommunications links for Internet transactions.
"The international credit card market is less penetrated than the United States," said Richard Weingarten, director, Salomon Brothers Inc. "This should provide them with greater growth opportunity."
Pronoma is a software company whose chief product, an Internet-based system called CashLink, enables merchants to sell products and receive credit card payments through sites on the World Wide Web.
Pronoma is a licensee of Cybercash Inc., the Reston, Va., Internet payments company. The CashLink application works hand in hand with Cybercash payment software. TNSI also authorizes credit card transactions for Cybercash.
In buying most of Pronoma, Transaction Network gained the expertise of "people who are knowledgeable in the processing and banking industry and who are working directly with the processing side of the banks in Sweden," said TNSI chief executive officer John J. McDonnell Jr.
"Sweden permits competitive telecommunications," Mr. McDonnell said. The industry is less tightly regulated there than in some European Union countries, and companies like TNSI can enter the market at a relatively low cost, he said.
Sweden's market is "nearly identical to the United States six years ago," he said. "Banks and the merchants are very unhappy with response times of 25 to 30 seconds for an authorization."
Sweden and the United Kingdom, where TNSI also has a foothold, are the only competitive telecommunication markets in the European Union, Mr. McDonnell said. The rest of the member countries will not be on a deregulated par until 1998.
