Magazine article American Banker

Global Picks Up Alliance's Bank Card Processing

Magazine article American Banker

Global Picks Up Alliance's Bank Card Processing

Article excerpt

Global Payment Systems and Alliance Data Systems Corp. have entered an agreement to process cobranded credit cards.

Alliance Data is one of the top five third-party processors of private-label cards, and Global Payment Systems is a merchant acquirer and bank-card processor.

The outsourcing agreement is seen as a way for Alliance Data to stay competitive in the private-label processing world while responding to the changing needs of its clients, which include large retail chains.

Under the terms of the deal, signed last week, Global will process the credit card accounts for Service Merchandise's new cobranded Visa, while Alliance will own the receivables.

Service Merchandise "wanted to experiment with a Service Merchandise Visa," said Ralph Spurgin, Alliance's chief executive officer. "At this point, we don't have a system for processing bank cards."

He said Alliance, based in Dallas, has had a long-standing processing relationship with Electronic Data Systems, which sold its credit card processing platform to Global in January. At about the same time, Service Merchandise switched its private-label business away from Banc One and First Data Corp. to Alliance.

Alliance chose Global for the outsourcing arrangement because of the EDS connection, Mr. Spurgin said, adding that his company "did not want to stop and start over."

First Data, Mr. Spurgin said, "is a competitor ... in merchant bank cards."

John Grund, senior associate, First Annapolis Consulting, Linthicum, Md. …

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