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Issue 010902- Table of Contents GS To Establish Advisory Board Wal-Mart's Resolve Wasn't To Be Discounted With the Right Knowledge, Check Services Do Sell Well Getting the Picture with Check Imaging What Makes Smart Cards So Smart? Power in the Palm of ISO Hands Give the Gift That Keeps on Giving
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Lead Story: From Equifax to Certegy I
f you have been hearing a new name around the industry and haven't heard anything about Equifax Check Services in awhile, this story will help to bring you up to speed. Equifax spun off its payments business segment, and it is now called Certegy.
Certegy is a large-scale provider of credit card processing and check risk management services worldwide. Certegy's businesses are organized across two segments: Card Services (67 percent of 2000 revenue) and Check Services (33 percent of 2000 revenue).
Card Services provides credit and debit card issuer services, merchant processing services and customer support to card issuers and merchants. Its target market is community banks and credit unions and, more recently, international financial institutions.
With more than 6,000 customers, Certegy is a leading provider to these attractive niche markets, where growth has outpaced that of the card industry as a whole. In its Check Services business segment, Certegy provides extensive check risk management services to merchants worldwide.
In Card Services, Certegy's lead will be difficult to replicate, but don't expect to see Certegy in the mom-and-pop bankcard acquirers lists anytime soon. With 30 percent market share, the company provides payment and card processing services to U.S. community banks and credit unions. Certegy's lead is propelled by contractual relationships with the Independent Bank Association of America (IBAA) and Card Services for Credit Unions (CSCU), two top trade associations.
These contracts expire in 2004, but the relationships span 25 years and the switching costs are high. Barriers to entry are raised further by the need to be a full-service provider with a dedicated, proprietary technology platform. For new market entrants, it is difficult to justify the required large-technology investments.
In Check Services, Certegy has been gaining market share based on its differentiated risk management algorithms and focused sales effort. Customers include large retailers Sears, Best Buy and Target.
Certegy has been an innovator with new products such as PayCheckAccept, which lowers risk and improves speed in payroll check cashing and has led to several successes with major supermarket chains. Its recent contract with 7-Eleven stores, to provide check-cashing software to its in-store electronic kiosks, also provides significant new revenue potential.
This change might take all of us some time to get used to (I left TeleCredit Check Services as its President in 1983, and it took me years to begin calling it Equifax). But we all can count on seeing the new name regularly.
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