Vital Processing Services has entered into a joint venture designed to provide more-complete merchant transaction information to its financial institution clients.

The new company, Golden Retriever Systems, was formed in partnership with Golden Retriever Systems Group Inc., a Chandler, Ariz. software and data base management company. Vital, based in Tempe, Ariz., will have a controlling interest.

Visa U.S.A., one of Vital's two owners, already has a marketing alliance with the Golden Retriever group.

The additional services provided by the new company are part of Vital's strategic plan to gain a competitive edge over other merchant processing companies, industry observers said.Golden Retriever will give Vital's financial institution clients more complete data, which they, in turn, can provide to their merchant customers.

"It is clearly part of the strategic positioning for Vital," said Stanley W. Anderson, president of Anderson and Associates, an Arvada, Colo. consulting firm. "Vital is looking to position itself as the leading provider of merchant data."

As part of that, Vital wants "to be able to provide a platform on which to build additional data . . . captured at the point of sale and to be able to feed (those) data back to the acquirer, as well as to the issuer," he added

The services for financial institutions and merchants will include electronic transaction information retrieval, risk management analysis, and customized reporting.

"One of our key objectives in 1997 is to add capabilities," said Vital spokeswoman Casey Watson. The company wants to "integrate information more tightly and provide reporting on statements on demand through electronic files, and this deal allows us to do that."

Vital was formed last year in a partnership between Visa U.S.A. and Total System Services Inc., Columbus, Ga. It was established as an alternative for banks and financial institutions to the larger merchant processors like First Data Corp.

"Enhancement of risk management capabilities continues to be a key issue for financial institutions," said Anthony J. de Nicola, general partner at Welsh, Carson, Anderson & Stowe. "The ability to provide more customized merchant reporting will allow Vital to be a more compelling alternative" to other merchant processors.

Golden Retriever Systems Group services 325,000 merchant locations. The data base firm's president and chief executive, David Shein, said Vital "recognizes an inherent change in the merchant processing relationship." Merchant processors' "ability to compete on price necessitates services that expand (customer) relationships, to retain existing accounts and get new ones," he added.

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