Vital Processing Services, the merchant acquiring unit of Total System Services Inc. of Columbus, Ga., has changed its name in preparation for expanding beyond the United States.
The new name, announced Monday, is TSYS Acquiring Solutions.
Beverly Wells, the Tempe, Ariz., unit’s president and chief executive, said in an interview that using the name of its parent would make it easier to market itself abroad.
“We very much want to take our acquiring company worldwide, and we have no brand recognition” outside the United States, she said.
Vital Processing was originally a joint venture between TSYS and Visa U.S.A., but TSYS bought Visa’s half of the venture in March of last year.
Ms. Wells said being half-owned by Visa’s U.S. unit had restricted the venture to operating only in this country, but the buyout opened the door to taking it elsewhere. The unit has spent the past year studying the international market, and is now ready to venture abroad, she said.
Though TSYS Acquiring Solutions has no foreign customers now, “we have a lot of activity going on, in and out of this country,” she said, and she hopes to announce an international deal soon.
She said that her unit has identified several foreign markets “where we have a lot of interest” — Europe (especially the United Kingdom), China, and Brazil.
This strategy matches that of its parent, which is also expanding abroad. TSYS already has operations in Europe, and in December it announced that it had purchased a 34% stake in China’s top transaction processor, China UnionPay Data Co. Ltd.
TSYS did not want to create an acquiring company for international customers, Ms. Wells said. “We want to be the acquiring arm of the international division.”
Robert J. Dodd, an analyst for Regions Financial Corp.’s Morgan Keegan & Co. Inc., said the new name will have “a lot more recognition than Vital, which would have zero.”
He also said that the three target markets are good choices for TSYS Acquiring Solutions. Its parent already has operations in China and Europe, including a data processing center in the United Kingdom, where “TSYS would have the most name recognition.”
Transaction processors are also eager to expand into Latin America, and Brazil is the largest market in the region, Mr. Dodd said. “Everybody wants to be in Latin America” right now.
Last month Fidelity National Information Services Inc. announced a deal to process card transaction for Brazilian banks. The deal makes Fidelity National the country’s top third-party processor.
Mr. Dodd said that many foreign card issuers have already started to use third-party processors, but that the merchant acquiring end of the business is still handled mainly by banks, either in-house or through bank-operated consortia.
“The outsourcing of acquiring services is not as common overseas as it is in the United States,” he said.
Many of those foreign issuers “have focused more on growing the business, rather than on becoming efficient,” he said, and a dedicated processor could attract customers by offering more cost-efficient merchant processing services. For example, in September, HSBC Holdings PLC announced a partnership with Global Payments Inc., which took over HSBC’s merchant processing in Asia.
These extensive bank-operated merchant portfolios are a lucrative potential market for TSYS Acquiring Solutions, which could pursue similar partnerships with foreign banks, Mr. Dodd said. “It won’t be easy, but there’s a market out there.”
