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Royal Bank of Scotland to Acquire Lynk Systems

Grab your targes, axes and pikes. Things are heating up this summer in the battle of the billion dollar bankcard acquirers, and there's no saying who will get captured next.

On Aug. 3, 2004, Atlanta-based Lynk Systems, Inc., announced it would be acquired by the Royal Bank of Scotland Group plc (RBS) for $525 million in cash. The transaction is expected to close in the third quarter of 2004.

Keeping its name, Lynk will continue to operate as Lynk Systems, said Norma Wayco, Chief Marketing Officer of Lynk. Wayco also said that, strategically, RBS was the right company for Lynk.

"We've had a lot of suitors over the years but have committed to the company that could give us the best strategic positioning by keeping us intact and using our technology and processing platform," she said.

With the acquisition of Lynk, RBS said it will be the third-largest merchant acquirer in the world. Previously, RBS had no merchant processing presence in the United States.

Lynk, a provider of credit and debit card processing services, employs 550 people at its headquarters and has a national network of 400 salespeople. Lynk services approximately 100,000 merchants, processing $18 billion in charge card volume and 400 million transactions annually. RBS owns Citizens Bank, soon to be the sixth largest bank in the United States, and will provide Lynk access to Citizens' customer base.

RBS' purchase of Lynk isn't the only merger this year poised to shake up The Green Sheet's most recent rankings of the billion dollar acquirers (based on 2003 transaction volume estimates). On July 13, Bank of America Corp. (BofA) announced plans to acquire National Processing Inc.'s National Processing Co. (NPC) for $1.4 billion. BofA also acquired FleetBoston Financial Corp. in April.

Also in July, J.P. Morgan Chase Co. completed its acquisition of Bank One, and the newly-formed company, now called J.P. Morgan Chase & Co., selected TSYS, not First Data Corp., to provide processing services for its 87 million Visa and MasterCard-branded cards. And in February, First Data officially acquired Concord EFS, Inc.

In the Green Sheet's 2003 rankings of top credit card acquirers in the United States (GSQ, December 2003, Vol. 6, No. 4), J.P. Morgan Chase's Chase Merchant Services, LLC was the largest acquirer; NPC was the second largest; Bank One (and First Data) was third; First Data's First Data Merchant Services was fifth, followed by Concord EFS, in sixth place; Bank of America's BA Merchant Services, Inc. division came in 10th; Lynk was the 14th largest acquirer; and FleetBoston's Fleet Business Payment Solutions was the 16th.

The effects of these acquisitions might also impact the top online (PIN) debit acquirers, which The Green Sheet also ranked in 2003 (based on 2002 transaction totals).

First Data's acquisition of Concord this year included Concord's STAR debit network, the largest in the United States.

However, in order to appease the Department of Justice's monopoly concerns, First Data sold its majority stake in NYCE, the nation's third largest debit network, to Metavante Corp., a subsidiary of Marshall & Ilsley Corp. In the 2003 PIN debit rankings, Concord was first, followed by J.P. Morgan Chase (2), First Data (3), BofA (4), Lynk (5), and FleetBoston (11).

The 2004 acquirer rankings will appear in the December 2004 GSQ.

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