n May 9, 2005, New Jersey-based payment and transaction processor United Bank Card Inc. (UBC) announced that it sold a portion of its portfolio to Montreal-based Optimal Payments Corp., a wholly owned subsidiary of Optimal Group Inc., for $44 million in cash.

The portfolio represents 15,500 merchant locations that generate in excess of $1.5 billion in annual credit and debit card processing volume, according to the companies.

UBC said the transaction will not impact its ISO/merchant level sales (MLS) partners, and UBC will continue to provide customer service and technical support to all the merchants involved on behalf of Optimal Payments.

UBC intends to use the cash to expand its Tucson, Ariz. facility; add merchant retention, quality control and finance departments; and hire more support staff. UBC will also invest in new processing technology to reduce costs and enhance programs for ISOs/MLSs.

Following the announcement, news of the transaction stirred up much discussion on GS Online's MLS Forum. Many ISOs/MLSs who send their business to UBC wondered how it would affect their residuals.

"This transaction was an important step in realizing the future vision of United Bank Card," said UBC Chief Executive Officer Jared Isaacman.

"We structured this deal to be entirely transparent to our ISOs and merchants. Since only a portion of our portfolio was included in this transaction, there will be no impact to our ISO partners or merchant customers."

UBC said that its ISO/MLSs have the option to sell their residual portfolios. Agents can also choose to have UBC pay them on a regular basis, and their merchants will remain on UBC's current platform and bank.

Optimal Group Inc. is a payment and services company with operations throughout North America and the United Kingdom.

The acquisition will give Optimal more of a presence in U.S.-based "card present" payment processing, according to Mitch Garber, President and CEO of Optimal Payments.