After two years of gearing up to offer credit card processing services to banks operating in Mexico, Total System Services Inc. announced it has launched its joint venture.

The Columbus, Ga.-based card processing company sank $6 million into its partnership, Total System Services de Mexico, with 11 Mexican banks that own 51% of the start-up.

While other U.S. companies have partnered with Mexican banks to offer card processing, Total System has made a significant investment, hiring a staff of 220 employees and building a 52,000-square-foot facility in Toluca, Mexico, said M. Troy Woods, senior vice president of Total System.

"Neither of the other partners have made the extensive commitment we have," said Mr. Woods.

Banc One Corp. signed a deal in 1992 with the largest bank in Mexico, Banamex, to form a joint processing company. And First Data Resources Inc. is processing credit cards for two of Mexico's largest banks, Bancomer and Multibanco.

Total System Services de Mexico is processing cards for 18 of the 24 banks that make up the Mexican credit card market, though the venture's share in terms of card spending volume represents only 40% of the market.

"We are planning to be aggressive," said Mr. Troy. "We think we are going to be the processor of choice."

Mr. Troy pointed to the seven banks, including Citibank, that are not partners in the venture but have signed up for its services.

Adding more muscle to the partnership is Mexico's third-largest financial institution, Banco Serfin, one of the 11 bank partners. The other members are primarily smaller banks.

The bank partners were formerly part of an association called Prosa, which provided card processing services. To participate in the joint venture, the banks formed a new company, Controladora Prosa. The original association, Prosa still performs some front-end services, such as payment capture and voice authorizations, but clearing functions are now sent to Total System.

All card processing and clearing takes place in Georgia, where Total System has a staff of 100 people dedicated to the Mexican operation. But services more visible to the cardholder - customer service, production and delivery of cards, and cardholder statements - are handled by the Toluca facility.

Mr. Woods said he expects the 11 partner banks, each with separate agreements in the joint venture, to become more competitive with each other. Having been members of the same association, those banks regularly shared customer data.

"There will be a shift away from the sharing of information like cardholder and competitive marketing data," said Mr. Woods.

Despite a $460,000 equity loss in the second quarter, analysts expect the joint venture to significantly add to Total System's revenues and earnings.

Montgomery Securities analyst Richard K. Weingarten attributes the loss to the initial costs of launching the operation and the downturn in the Mexican economy.

The loss occurred "before we had a chance to generate income. We had to hire people, pay bills," said Mr. Woods. "The economic downturn had nothing to do with it."

Also in Mexico, Datacredit, a joint venture between TRW Information Systems and Services, and a prominent Mexican entrepreneur, Pablo Gerber, has become the first credit reporting company to be authorized by the government to operate in Mexico.

Before Datacredit was approved by the government, it was not permitted to collect bank data.

The approval coincided with the start of Datacredit, which began operations during the first week of July.

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