irst Data Corp. added 160,000 merchant locations during the third quarter of 2006, First Data Chairman and Chief Executive Officer Henry C. (Ric) Duques said during a recent conference call with investors. Ninety percent were small to mid-sized merchants.

"We continue to add ISOs ... as a referral network," Duques said. "This investment in sales ensures we maintain the broadest and most diverse sales force in the marketplace today."

The company has put more emphasis not only on winning, but also keeping new business. "We put a lot more client and relationship management people" in that merchant segment.

Year to date, First Data has added more than 300 sales professionals focused on regional growth, bringing the number of sales reps to 2,100.

The processor's investment in automated activation tools began to pay off: 22% of new merchants were boarded within two days, up from 5% in 2005, Duques said.

He also said consumers' use of prepaid cards at retail chains is explosive and "a good thing for our merchant business."

When asked about competitive pressures, Duques said, "Pricing in the merchant arena is vicious." Price compression has been averaging 3% to 5% and will continue, he added.

First Data reported total transaction and processing-services fee revenue of $1.29 billion for the quarter. Merchant-services fee revenue of $693.6 million and the number of domestic merchant transactions both rose 13% from the same period in 2005. Domestic debit-issuer transactions (a service provided to financial institutions) rose 23%.

First Data reported a third-quarter net profit of $342.2 million, which was down 34%, largely due to the spin-off of Western Union in October. Total revenue for the period rose 9% to $1.8 billion.