Total System Services Inc. is making a $100 million statement in glass and brick.

The company's new office complex, where it plans to consolidate its scattered operations upon completion next year, will symbolize its ambitions and permanence among the credit card processing elite.

Its leadership even talks about what once seemed unfathomable: catching the leader in the field, First Data Corp.

Though never entirely overshadowed in the credit card industry by the much larger and more diversified First Data, Total System is flexing new muscle as it literally comes together on the banks of the Chattahoochee River.

"You've got two primary competitors," said Richard W. Ussery, chairman and chief executive officer. "The thing that's nice is, we see ourselves winning more often than losing."

Total System is responsible for processing 13% of the card accounts of the 50 largest issuers; First Data, 36%, according to Deutsche Morgan Grenfell analyst Wayne Segal.

The rest of the accounts, many still processed by big banking companies on their own, are considered up for grabs-and are squarely in the two industry leaders' sights.

Total System added 17 clients last year as it brought accounts serviced to 93 million, from 79 million. Its biggest customers include BankAmerica Corp., NationsBank Corp., and the AT&T Universal portion of the Citicorp portfolio.

"We believe we are the processor of choice," said Philip W. Tomlinson, president of Total System. "We've had great success over the last two years. We've had tremendous growth."

But so has First Data, a sign of how fast the business is expanding and the competition intensifying. First Data said it was handling 170 million card accounts as of March 31, a year-to-year increase of 25%.

Last year Total System signed Canadian Tire Acceptance Ltd. and Royal Bank of Canada, extending its lead in card processing in Canada.

Three years since it opened its TSYS de Mexico subsidiary, the company processes for 75% of issuers and acquirers in that country.

Executives at Total System see plenty more room for growth in the United States and abroad. Samuel A. Nunn, the Atlanta lawyer and former U.S. senator who recently joined the processing company's board of directors, said recent growth is "only just the beginning. A lot of banks are going to outsource."

One question mark for Total System is the fallout from mergers and portfolio acquisitions. While Total System serves both sides of the announced NationsBank-BankAmerica merger, it does not work for Royal Bank of Canada's pending partner, Bank of Montreal.

The AT&T account may also be up in the air, since the unit's acquirer, Citibank, does most of its processing in-house (though it does rely on Total System for commercial card processing).

"We obviously hold our breath every time there is a huge merger deal announcement because you can win or lose based on the stroke of a pen," Mr. Tomlinson said. "We certainly have our favorites in the game."

Brent Wouters, an analyst at Robinson-Humphrey of Atlanta, said Total System has "good products, good differentiation, and good opportunities" but faces an entrenched adversary. "First Data is a great competitor-it's difficult to steal away clients."

One prize Total System would like to snare is Sears, Roebuck and Co., which halted negotiations with First Data in March. The big retailer has 60 million accounts and 10% of all private-label cards.

Mr. Tomlinson said Total System aims to grow "one customer at a time." He makes the point to distinguish the company from First Data, which achieved its dominance in part through a series of acquisitions in the 1990s.

Total System has historically stressed its banking roots-its majority shareholder is the bank holding company Synovus Financial Corp., also of Columbus, Ga.-and the fact that it did not diversify as First Data did into areas like money orders and investment services. Total System's 1997 revenues were $361.5 million, while First Data's were $5.2 billion.

Very much a card powerhouse, First Data last year snared such big accounts as Banc One Corp. of Columbus, Ohio, and Wells Fargo & Co. of San Francisco.

"We focus more on the value proposition and how our services can make a difference in our clients' business," said Jack McDonnell, managing director of client development at First Data. "You're seeing a pretty steady growth of new business coming our way."

Meanwhile, Total System stands ready to take on more volume. In addition to the Chattahoochee complex, it is building a 100,000-square-foot processing facility and adding on to an existing center north of Columbus.

Mr. Ussery and Mr. Tomlinson said their growth is fueled by the new software platform TS2, the result of a seven-year, $100 million gamble.

The outlay "probably scared the board," Mr. Ussery said. But "our vision of where the future was going and where the competition was going demanded that we invest the dollars and do it sooner rather than later."

About 20 million of Total System's accounts-12 million of them in 1997- have been converted to TS2, which is year-2000-compliant and easier to customize than its predecessor.

James H. Blanchard, chairman and chief executive officer of Synovus, said the TS2 investment "is paying off. We believe that we have a technological advantage right now that is beyond any advantage that any processor has ever enjoyed in this business."

James L. Accomando, president of Accomando Consulting Inc., Fairfield, Conn., said technology may matter less in Total System's market than other factors. "Processing is processing," he said. Differences lie in "the management style and the directions it focuses on, like customer service."

Total System's managers "tend to be as proactive as possible," Mr. Accomando said. "They think of customer reaction, the speed" of response time.

Precision is an obsession. The company tracks workers' accuracy, and those who make too many errors can lose out on bonuses. In one of the center's hallways hangs a series of plaques honoring flawless streaks of a year or longer.

Total System was formed from a unit of Columbus Bank and Trust Co., Synovus' lead bank, in 1983. Both Mr. Ussery and Mr. Tomlinson have been with the company since before it was spun out, as have many loyal investors.

Total System has rewarded its shareholders, led by Synovus, which owns 80.7% of the stock: 100 shares bought for $1,550 in 1983 were worth $89,100 at yearend 1997.

Net income grew 20% in 1997, to $47.5 million.

In 1995, Total System puts its merchant services business into a fifty- fifty joint venture with Visa U.S.A., Vital Processing Services, which is also challenging First Data Corp. in that end of the business.

Total System has made one of its deepest marks in commercial card processing. It considers it a feather in its cap that all five banks designated to bid for the card business of U.S. government agencies are Total System customers.

"We feel very good about our prospects," said Mr. Ussery, looking ahead to passing the 100 million-account milestone this year. "We're getting closer and closer to First Data on the issuing side and look forward to the day when perhaps we'll pass them."

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