Total System Services Inc. has signed a processing contract that company officials hope will act as a jumping-off point to enter the lucrative health care processing business.
The Columbus, Ga.-based credit card processor will be handling the processing of the USMed Card, a new, private label, medical credit card.
The card, which is issued by Tallahassee, Fla.-based United States Medical Finance Corp., allows hospital patients to pay for insurance deductibles, co-payments, and other out-of-pocket health care costs.
The issuer is currently beta-testing the card with several Florida hospitals, and plans to roll it out completely within the next few months. The start-up company predicts it will have 20,000 to 30,000 accounts by the end of this year, and 400,000 to 500,000 within five years.
The financial terms of the contract were not disclosed.
Total System, majority-owned by Synovus Financial Corp., is the second- largest credit card processor, handling about 45 million accounts for 114 issuing institutions. The company has signaled its intention to diversify into related fields and untapped markets, one of which is health care processing.
"We're excited about the opportunity to play a role in the changing health care arena," said Philip W. Tomlinson, president of Total System. "This agreement represents the first time Total System will process a medical payment vehicle and may be a precursor to expanding into the electronic medical claims processing business."
Experts say about $188 billion is spent annually on health care information, administration, and data processing, a number that has banks and banking-related companies very interested.
First Data Corp., whose Card Services Group is the biggest credit card processor with more than 90 million accounts, is already active in the health care processing market. Card Establishment Services, which First Data is acquiring, has a business unit that serves more than 1,500 health care providers, insurance claims administrators, and employers.