Total System Services Inc. of Columbus, Ga., is settling in to Canada.
With two big signings late last year, the credit card processor made big strides toward its goal of dominating the outsourcing business north of the border.
It underscored its intentions with the opening this month of an office in Welland, Ontario. This lets the Synovus Financial Corp. subsidiary, second only to First Data Corp. in U.S. card processing, "quickly react to our customers' needs," said Gaylon Jowers, Total System's group vice president of sales.
Its 1997 coups were a seven-year contract with Canadian Tire Acceptance Ltd. to process six million private-label and MasterCard accounts and another multiyear deal with Royal Bank of Canada for five million Visa accounts.
Canadian Tire is the 13th-largest card issuer in Canada and the fifth- largest MasterCard issuer; Royal Bank of Canada is the largest in the country and second in bank credit cards.
Mr. Jowers said Total System now serves more than half the Canadian card market. For several years it has done processing for the top seven commercial card issuers in Canada, including Citibank, Chase Manhattan Bank, and Bank of Nova Scotia.
Driving the growth is TS2, the backbone processing system introduced in 1994, which Total System touts as being year 2000-compliant. The software can store four times more cardholder data than traditional processing systems and shortens the time required to make changes in products and terms, said Mr. Jowers.
TS2 handles about 20 million of Total System's 90 million accounts, including those of Canadian Tire and Royal Bank, which are being converted from in-house processing.
The proposed merger of Royal Bank with Bank of Montreal could pose a complication for Total System. Canadian banks are not dual issuers. Royal Bank issues Visa cards; Bank of Montreal issues MasterCards and processes them in-house. But Mr. Jowers said Total System is optimistic.
"Although we don't understand all of the ramifications" of the merger, he said, "we have established a long-term relationship with Royal Bank of Canada."
Total System's biggest challenge is convincing banks to use an outside service rather than to continue with their own systems, Mr. Jowers said.
