Electronic Payment Systems Inc., has announced that they will be acquired by Memphis-based Concord EFS Inc., for $920 million. The sale profits will be split among MAC's owners which include First Union Corp., PNC Bank Corp., and Banc One Corp; Concord's stock rose 10% after the deal was made public.
As you know from previous Green Sheet articles, Electronic Payment Systems operates the MAC ATM network. EPS will become a wholly owned subsidiary of Concord but will retain its name and the MAC brand.
Representatives report that customers will not notice a difference in their transactions or the fees charged. "We feel that operating as two independent companies, in the short term, will be in the best interests of our companies and our shareholders," said Concord chairman Dan M. Palmer, who is to run the combined company. Philip Valvardi, president of the MAC network says "Over time we're going to try to leverage our resources to bring new products and services to our clients and consumers."
Bank One spokesman John Russell says, "There was great interest from Concord, and several others by the way, and in this electronic commerce business, size is critical. I think it starts to put pressure on the very small ATM interchange companies across the country." Other companies reported to have been interested in the company include First Data Resources and FiServ.
Electronic Payment Systems, originally the ATM section of Philadelphia National Bank, has been criticized by some for not achieving their goal of establishing a national payment system to compete against Visa and MasterCard. But, supporters say it was more due to government regulation than any failure by EPS.
EPS is the nation's largest electronic funds transfer processor (40,000 ATMs, 515,000 POS terminals, 100 million transactions per month). But, the merger comes on the heels of industry rumbling that Star Systems and Honor Technologies will merge. If that merger is completed, Concord and EPS will most likely become the second largest electronic funds processor.
