In a bid to further consolidate its year-long business ties,
Total System Services, Inc.
) has entered into an agreement with
Bank of America Corporation
) to provide its consumers processing services related to its
credit card portfolio in the U.S. While most of the provisions
remain undisclosed, it has been announced that the tenure of the
services will be at least six years.
The company also declared that it expects to conclude the
conversion of Bank of America's consumer card portfolio from its
in-house processing system by June 2014. The agreement allows Bank
of America to use the TS2 software, the payment for which will be
met over the long term.
Per the agreement, Bank of America will have access to Total
System's core payments engine, TS2, together with the right to use
various customized processing solutions. The utilization of
these services under the guidance of skilled personnel will ensure
the smooth addressal of issues related to risk and financial
management and will be beneficial to Bank of America.
The new agreement is in furtherance of a previous accord between
the companies, under which, Total System processed small and other
commercial business cards of Bank of America on its TS2 platform.
In 2010, Bank of America extended its long-term contract for
merchant and other card processing services through a new joint
Overall, Total System's contract portfolio received a boost in
2012 when it attained processing contracts from renowned banks like
Royal Bank of Scotland, a unit of
The Royal Bank of Scotland Group plc
), BancorpSouth, a unit of
) and other banks of such stature.
Total System is scheduled to release its second quarter results
after the closing bell on July 24. The Zacks Consensus Estimate for
earnings for the quarter is currently pegged at 32 cents per share,
representing an estimated year-over-year increase of 13.1%.
The company currently retains a Zacks #2 Rank, which translates
into a short-term Buy rating. We maintain a long-term Neutral
recommendation on the stock.
BANK OF AMER CP (BAC): Free Stock Analysis
BANCORPSOUTH (BXS): Free Stock Analysis Report
ROYAL BK SC-ADR (RBS): Free Stock Analysis
TOTAL SYS SVC (TSS): Free Stock Analysis Report
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