In an effort to expand its merchant acquiring services,
Total System Services Inc.
) announced a long-term contract with Alaska-based MLS Direct
Network. However, the details of the contract remain
Accordingly, Total System will now be the primary payment
processing service provider for MLS Direct Network. The company
shall take care of the latter's risk management and technical
issues, while offering chargeback processing services.
Adding MLS Direct network further enhances Total System's
position in the US and accentuates its operating and competitive
leverage. As a result, the company has been witnessing
improvement in its financials over the past few quarters based on
its steady fundamental growth initiatives, primarily in the
merchant acquiring space.
Additionally, the company is making efforts to tap
opportunities in the recovering markets through high-grade
technology. This is reflected in the improved transaction volumes
and higher accounts on file along with lower-than-expected margin
decline since the formation of TSYS Merchant Solutions (TMS) and
increased client activity. Such growth-driving factors encouraged
management to produce an optimistic guidance for 2013.
Meanwhile, Total System is exploring international markets via
strategic alliances. Last week, the company attained the worthy
contract from UK's primary automated teller machine (ATM) network
- LINK. Accordingly, Total System will be the Certified Service
Bureau for LINK, which comprises more than 35 member
This enables the company to process all of the payment
transactions for over 64,000 ATMs connected to LINK across the
UK. LINK doles out about £10 billion of cash withdrawals per
month. We believe the new contract with LINK should further help
perk up international growth of the company.
Currently, Total System carries a Zacks Rank #2 (Buy). Some
more stocks in the same financial services sector carrying the
same Zacks Rank include
Global Payments Inc.
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