First Data Corp. yesterday reported flat growth in fourth-quarter card-processing revenue. The Atlanta-based processor says it generated revenue of $819.5 million in retail and alliances services for the quarter, down slightly from $819.8 million during the same period a year earlier. Retail and alliance services includes First Data’s merchant processing business. Full-year revenue for the segment totaled $3.1 billion, down 6.1% from $3.3 billion in 2008.
First Data released its latest earnings data yesterday (
Through 2008 and 2009, First Data made a “concerted effort to build out our distribution network,” Michael Capellas, First Data chairman and CEO, told analysts during a conference call Thursday.
Within the past year, First Data started a merchant-processing joint venture with Bank of America Corp., renewed the Wells Fargo Merchant Services LLC processing alliance with Wells Fargo Co. (
Capellas says he expects to see more business from these deals this year and next, “simply because we have gained a lion’s share of the distribution network.”
Industry analyst Robert Dodd, with Memphis, Tenn.-based Morgan Keegan & Co., pegs First Data’s share of the U.S. transaction-processing market at 50%.
Capellas says he also is optimistic because transaction volume last year grew by 7% to 8%. First Data would not release the transaction totals.
The processor also tends not to make as much money off of transactions at discount retailers, which consumers increasingly have shopped at during the recession, Ed Labry, First Data president, told analysts.
Some of First Data’s other business lines also generated less revenue during the quarter. First Data’s financial services unit, which service card issuers, earned $352.9 million in revenue, down 6.9% from $379.2 million during the same period a year earlier. For the year, revenue fell 6.7%, to $1.4 billion from $1.5 billion in 2008.
The international business segment generated $451.8 million in fourth-quarter revenue, up 12.1% from $403.2 million during the same quarter a year earlier. For the year, revenue totaled $1.6 billion, down 5.9% from $1.7 billion in 2008.
