Transaction Network Services Inc. has extended its network services contracts with First Data Corp. and MasterCard International.
The Herndon, Va.-based company, which sells telecommunications services for transaction-oriented applications, said both deals would now run through about the spring of 1998. The original contracts with MasterCard and First Data were signed in August 1991 and June 1992, respectively.
First Data uses TNS to serve its data processing applications. Because of First Data's spate of acquisitions in recent months, TNS predicted the Hackensack, N.J.-based processor would increase its transaction volume commitment.
First Data, the top independent processor of bank card accounts and an increasingly prominent force in merchant processing, has bought Card Establishment Services and Envoy Corp. this year.
More recently, it announced a proposed merger with First Financial Management Corp., which owns Nabanco, the largest merchant processor in the United States. Last week, First Data announced a partnership with Barnett Banks Inc. and Bank of Hawaii that will establish a jointly owned company.
Industry observers have said that First Data, which now owns nearly one- third of the U.S. merchant processing and card processing business, could eventually process transactions without using MasterCard's or Visa's systems, costing them millions of dollars in fee income.
TNS handles network services for MasterCard's automated point of sale program, MAPP, providing its "950" dial-up line. TNS said the card association has been adding transaction volume to its network but did not say how much.
This month, TNS bought validation and fraud control service assets from Intellicall Inc., along with an exclusive U.S. license for VICS software, for $3 million in cash. The company described this as aimed at enhancing its leading position in U.S. calling card validation and fraud control services.
In addition, TNS entered into a long-term billing services agreement with Intellicall under which TNS prepaid $1.5 million for billing services. It also made a software development pact for $450,000, payable in the current quarter.