The European processing landscape,
long characterised by consolidation, is set to be redrawn again
following the news that Equens has signed an agreement with
France’s Crédit Agricole’s payment processing subsidiary Cedicam to
explore the possibility of the two entities merging.

By combining volumes and developing
synergies, both parties said the new entity would become a major
player in the European market and subsequently bring about lower
unit processing costs. Negotiations are slated to conclude next
year, with a final agreement subject to consultation with employee
representation groups and regulatory approval.

A merged entity comprising Equens and Cedicam
would become by far the largest payment processor in Europe,
dwarfing the likes of Italy’s SIA-SSB and VocaLink of the UK, and
it would also be a serious contender to take market share away from
the likes of First Data and TSYS, which are headquartered in the
US.

Between them, Equens and Cedicam have a
processing volume of over 15 billion transactions per annum.

For Cedicam, the benefits of such a move would
be much-needed access to the wider European marketplace, and for
Equens, it would extend its already considerable reach into the
French payment marketplace.

Jean-Yves Hocher, deputy CEO of Crédit
Agricole, said: “We are facing major challenges within the rapidly
changing European landscape.

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By GlobalData

“By discussing a partnership with Equens to
become the pan-European card and payment processor, we will be able
to combine expertise, technology, in-depth knowledge and the
processing of several billion transactions to serve our
network.”

Michael Steinbach, chairman of Equens’ board,
added: “The intended co-operation with Cedicam is a major step
forward in our strategy to become the premier pan-European
processor.

“It will enable us to further increase our
scale, geographical presence and product offering for the benefit
of our current and future clients and shareholders, like ABN AMRO,
DZ Bank, ICBPI, ING and Rabobank.”

SIA-SSB sale stalls

Elsewhere in Europe, the protracted
sale process for Italian payment processor SIA-SSB has hit another
hurdle, after the Banca d’Italia blocked the sale in order to avoid
Italian banking assets falling into foreign hands.

It is believed that Atos Origin,
owner of European processor Atos Worldline, was likely the
frontrunner in the bidding process, having seen off competition
from early bidders who dropped out, including Telecom Italia.

SIA SSB was initially put up for sale in
mid-2008 by its consortium of bank owners, including Intesa
Sanpaolo, UniCredit and BNL, but the bidding process has been
derailed by a string of setbacks, with several early bidders
dropping out, and negotiations over the sale price dragging on as
the global economic turbulence slashed company valuations.

Having posted an initial asking price of €800
million ($1 billion), SIA-SSB is thought to have dropped the price
to around €500 million.

It is believed that Atos Origin is prepared to
offer between €350 million to €450 million for SIA-SSB.

Aside from card processing, SIA-SSB also has
network service management, capital markets and automated clearing
house (ACH) processing business lines.

It is this potential of converging all
elements to produce much higher leverage of volume economies that
has kept the bidding process alive as payment schemes and
processors adapt to the post-SEPA European landscape.

Payment Processing