Total System Services Inc.
) inched up about 0.5% to $31.14 as of Nov 22, following the
announcement of its extended alliance with FirstBank Puerto Rico
(FirstBank) -- a subsidiary of First Bancorp last week. However,
the details of the alliance remain undisclosed.
FirstBank is armed with 152 branches, separate offices and
service centers across Puerto Rico, the Virgin Islands and
Florida. Through these locations, the bank also offers services
related to small loans, mortgage origination, insurance and asset
management, apart from standard banking services.
Recently, FirstBank repurchased its consumer credit card
portfolio from FIA Card Services, which highlights the role of
Total System to process this card portfolio. Meanwhile, the
company had already converted the bank's card portfolios to TS2
platform in Sep 2013.
Hence, Total System will now continue to process FirstBank's
debit and credit card portfolios through the same TS2 platform
and issue new credit cards in the future, overall strengthening
the payment processing network.
The over two-decade old alliance has been further strengthened
as Total System will now deploy its fraud detection machinery for
FirstBank. Subsequently, the company will not only identify sham
transactions but also rectify the doubtful actions, thereby
aiding smooth payment processes.
The alliance blends well with Total System's integrated
merchant acquiring platform that offers 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 number of
processed transactions, thereby supporting its financials.
Overall, we believe such strategic alliances, acquisitions and
technical competence are expected to consistently drive long-term
growth for Total System. Moreover, a healthy impact of the U.S.
regulations regarding the credit card industry should help
recover client accounts and augment long-term contracts,
instilling shareholder confidence.
Total System presently carries a Zacks Rank #3 (Hold).
However, some better-ranked stocks in the same sector include
Higher One Holdings Inc.
Global Payments Inc.
). All these stocks hold a Zacks Rank #2 (Buy).
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