In an attempt to expand its merchant acquiring services,
Total System Services Inc.
) extended its alliance with MainStream Merchant Services. The
latter is the leading payment processor, armed with annual credit
transactions worth $1.0 billion.
Accordingly, the strategic association entails Total System to
manage MainStream Merchant Services' card portfolio by providing
a wide array of services. These include authentication,
authorization, clearing and settlement services along with the
sponsorship of bank identification number.
The alliance blends well with Total System's integrated
merchant acquiring platform that offers a high-class customer
experience through its upgraded technology and point-of-sale
authorization capacities. Moreover, the renewed contract will
continue to enhance Total System's payment volumes and a number
of processed transactions, thereby supporting its financials.
Total System has been strengthening its clientele by offering
customized and flexible processing solutions to all its partners,
primarily in the merchant acquiring space. Furthermore, the
company continues to explore new market opportunities while
retaining the older ones. So far in 2013, the company
hasbolstered its contract portfolio through attainment of
processing contracts from KeyBank, LINK, Nationwide Building
Society, Qatar National Bank, KBC Bank Ireland and Payment
Alliance International, among others.
Meanwhile, Total System faces headwinds from strong
competition, currency and interest rate fluctuations and
stringent regulatory reforms. These factors have disturbed
pricing, credit allocation and business model of the company.
Hence, we believe such inorganic growth strategies bode well for
Total System's long-term growth, the fruits of which are likely
to be reflected in the financial results of the upcoming
While Total System carries a Zacks Rank #3 (Hold), other
strong performers in the financial sector include
). All these stocks carry a Zacks Rank #2 (Buy).
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