US-based banking and payments technology
provider Metavante Technologies has announced the £29 million
($57.4 million) acquisition of UK card processor Nomad Payments.
The move establishes Metavante in Europe, giving it a European
centre of operations, a blue-chip client base, a high-volume
processing platform and an established sales channel.
Nomad, a provider of prepaid and debit card
processing and licensed software, is well positioned in the
fledgling European prepaid payment markets. Prepaid card usage in
the continent is expected to rocket to €375 million ($557 million)
by 2010, a 600 percent increase from 2005, according to research
and advisory company TowerGroup. Nomad will now operate as
Metavante Technologies. It offers gift cards, money share cards and
general-purpose prepaid cards that can be used as an alternative to
a bank account.
Donald Layden, president of Metavante
International Group, said: “Metavante’s extensive experience in
prepaid processing is complementary and easily transferable to the
UK and Europe. It also offers a rich opportunity to expand the
prepaid processing value chain by offering synergistic Metavante
services such as closed-loop and loyalty programmes, and fraud
monitoring to the UK and European markets.”
Metavante also announced its full-year results
this month, showing net income down 69.1 percent from $160.1
million to $49.5 million, mainly from charges. It took a $101.1
million reduction in goodwill related to its Image Solutions
Division because of “updated expectations for long-term financial
performance of that business”. Revenue was up 6 percent from 2006
at $1.6 billion.
In its Payment Solutions Group segment, which
includes the company’s credit, debit and prepaid card management
suites, net income rose 8 percent to $276.8 million from $256.7
million. As well as the acquisition of Nomad, it bought Bensoft,
known in the market as RepayMe, a software company that aids the
administration of benefits.
CEO and president Frank Martire said the
outlook for 2008 was of “solid revenue growth, enhanced
profitability and strong cash generation”. He added that while
Metavante’s bank clients faced spending constraints and consumer
payment transactions could fall, he was cautiously optimistic
because of the business’s diversified product and service
The Nomad deal is expected to add around 1
percent to Metavante’s 2008 revenue and to have no significant
impact on the company’s profitability in 2008.
Metavante expects the main market opportunities
in Europe to be financial institutions, retailers, government
agencies, programme managers, open-loop gift cards, professional
organisations and affinity groups.
Gareth Lodge, senior analyst with TowerGroup,
said: “Prepaid cards as a direct substitute for today’s cash and
cheques and give Europe’s banks an ideal mechanism to achieve
efficiencies after SEPA is in effect.”
Metavante Technologies is the parent company of
Metavante Corporation, which delivers banking and payments
technologies to around 8,600 financial services firms and
businesses across the globe. Metavante also owns the NYCE ATM
network, an interbank network connecting cash machines owned by
various financial institutions, which it bought from US processor
First Data for $610 million in 2004. It recently signed a deal with
Discover Financial Services to integrate the system with Discover
Card transactions (see CI 392). Metavante was floated on the New
York Stock Exchange in November 2007 and spun off by Wisconsin’s
biggest bank, Marshall and Ilsey.

Nomad’s operations

Nomad started in 1991 as a card payments software provider and
established a payment division in 2005. Its clients include Bank of
Ireland, Clydesdale Bank, Newcastle Building Society, IDT Financial
Services and Tuxedo Money Solutions. Its has also licensed its
software to Société Générale, ING Ukraine and Romania, EFG Eurobank
(which operates in Poland, Romania and Serbia), and Poland’s Bank
Zachodni WBK.

Nomad initially processed debit cards before
offering open-loop prepaid capability to clients through Cortex,
its prepaid card software.
John Yeomans, Nomad president, said: “Joining
an established and successful prepaid processor like Metavante will
enhance Nomad’s products and services, and enable them to be
offered to a wider range of clients throughout the UK and Europe.
Our company will greatly benefit from Metavante’s financial
strength and established credibility with financial

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