Magazine article American Banker

JPMorgan Chase Seen Keeping First Data Alliance

Magazine article American Banker

JPMorgan Chase Seen Keeping First Data Alliance

Article excerpt

Though it is switching its credit card processing business away from First Data Corp., JPMorgan Chase & Co. seems to remain committed to the Denver processor's merchant processing business.

James Dimon, the New York banking company's president and chief operating officer, said at a conference last week that he is negotiating to consolidate two merchant processing joint ventures between the companies. The consolidated venture would be the industry's largest such operation.

Observers have been expecting a move like this since last year, when JPMorgan Chase bought Bank One Corp. along with its stake in the Dallas merchant processing venture Paymentech LP.

The only question was whether a merged merchant processor would remain under the auspices of First Data, or whether Mr. Dimon would establish a new unit and take it in-house (as he has done with many other operations) or to a rival processor (as he is doing with the credit card portfolio).

JPMorgan Chase and First Data each own 50% of Chase Merchant Services of Hagerstown, Md.; they own 52% and 48%, respectively, of Paymentech.

Negotiations are ongoing about how to combine Paymentech and Chase Merchant Services "in a very rational way for our customers that's good for both FDC and for us," Mr. Dimon said last week at a New York conference sponsored by Alliance Capital Management LP's Sanford C. Bernstein & Co. LLC.

"I wouldn't spend too much time worrying about it ... but [the combined unit] will be the largest in the country, I believe," he said.

Colin Wheeler, a First Data spokesman, said in a phone interview, "We have no reason to disagree with what Jamie Dimon has stated."

Craig A. Peckham, an analyst for Jefferies & Co. Inc. …

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