To better compete in the Single Euro Payment Area market, transaction processors Sermepa SAU and Redes y Procesos SA have agreed to merge their bankcard processing units, forming a new company called RedSys, the two Spain-based companies announced earlier this week.
SEPA is an initiative the European banking industry launched in 2002 to link European Union and other euro-based countries’ separate national payment systems into a standardized system.
The deal still requires ratification by the companies’ shareholders, who will consider the proposal in July, and approval from Spain’s National Competition Authority.
Following the merger, RedSys would process about 3.3 million transactions per year with cards from ServiRed SA and Sistema 4B SA, Spain’s two largest payment systems, the processors noted in a news release. Additionally, the merger would increase payments-processing efficiency in Spain to stay competitive, the companies noted.
RedSys transactions primarily would originate from the 60 million bankcards, 45,000 ATMs and nearly 1 million point-of-sale terminals that ServiRed and Sistema support.
The new unit also would handle cross-boarder transactions within Europe.
Because of the European Commission’s recent decision to reduce interchange rates, “issuers’ revenues per purchase transaction are falling rapidly, and we are obliged to diminish costs in our business wherever possible, including processing,” ServiRed Chairman José Manuel Gabeiras Vázquez said in a recent chairman letter.
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