Chase, First Data Merging Payment Ventures
Breitkopf, David, American Banker
By consolidating their two merchant-acquiring joint ventures, JPMorgan Chase & Co. and First Data Corp. are creating a payments juggernaut whose transaction volume will dwarf that of its nearest competitor.
JPMorgan Chase and First Data said Wednesday that they agreed to combine Chase Merchant Services with Paymentech LP to create a venture called Chase Paymentech Solutions LLC.
JPMorgan Chase, which owns 50% of Chase Merchant Services and 52.5% of Paymentech, will own 51% of Chase Paymentech. (JPMorgan Chase acquired its stake in Paymentech when it bought Bank One Corp. last year.)
Michael P. Duffy, Paymentech's president and chief executive, has been named the president and CEO of Chase Paymentech.
"I think the integration of the two companies is a great opportunity for the marketplace, because we're going to be able to deliver more products to a bigger constituency" Mr. Duffy said.
Thanassis Mazarakis, who had been the president of Chase Merchant Services, left in July and is now the chief operating officer of Southern Star Co. Inc., a New York holding company for shipping, milling, and other businesses.
Chase Merchant Services was the No. 1 merchant-acquirer last year, with $254.9 billion of transaction volume, according to the industry newsletter The Nilson Report. BA Merchant Services was No. 2, with $247.2 billion. Paymentech was No. 4, with $189.7 billion, so Chase Paymentech would be well out in front of the pack.
JPMorgan Chase said the new venture's customer base will include more than 541,000 merchants with nearly 1 million locations in the United States and Canada. This year it is expected to process about 13.1 billion transactions worth more than $500 billion. …