United Bank Card Inc., an independent sales organization and payment processor, is taking an option to buy 5,000 merchant accounts from Optimal Group Inc., a Montreal-based company, Optimal announced today. United Bank Card will pay $11 million for Optimal's U.S. merchant portfolio.
Under the complicated deal, Hampton, N.J.-based United Bank Card will service the merchant accounts while Optimal will continue to earn revenue from transactions United Bank Card processes for those merchants. Optimal will pay a service fee to United Bank for the ISO's services. Either Optimal or United Bank Card can trigger the sale of the merchant accounts. On or after Feb. 2, 2011, Optimal can require United Bank Card to buy the merchant portfolio, while United Bank Card can force Optimal to sell the portfolio anytime before Dec. 31, 2014. Neither company was available for comment by CardLine's deadline.
Optimal Group, which also owns the WowWee group of companies that make robotic devices, said last year it was willing to sell its Optimal Payments business (CardLine, 3/12/08). In October, Optimal sold its card-not-present processing business for $7 million to Card One Plus Ltd., a Toronto-based prepaid card and payment-services company (CardLine 10/9/08). United Bank Card says it has more than 100,000 merchant clients and processes transactions valued at more than $9 billion annually.
