CINCINNATI -- With an agreement to purchase ACI Merchant Services, Inc., Midwest Payment Systems has made its second acquisition in three months.
Terms of the cash deal were not disclosed. The purchase is expected to be complete in September.
Langhorne, Penn.-based ACI provides agent bank and direct processing for numerous financial institutions and over 7,500 merchants throughout the country.
ACI processes 500,000 electronic transactions -- primarily credit cards
for merchants -- per month. That will be a key revenue generator for MPS, Fifth Third Bank's data processing subsidiary and the operator of the Jeanie AT network, as the company collects a fee every time such transactions are made. The deal also brings MPS a new business, as ACI outsources and processes credit cards for financial institutions that don't have the capabilities to perform such transactions for merchants.
The announcement follows MPS' recent purchase of New York-based Integrated Delivery Technologies, Inc., (IDTI) and its Cartel Network, an independent, national electronic banking and transaction processing system that processes for 81 member financial institutions and 3.5 million cardholders nationwide.
Barry L. Boerstler, executive vice president of MPS, said, "ACI is a known quality service company in an area of the country that we've concentrated on for several years. We're pleased to partner with them to continue to grow our revenue and increase our profitability by combining our single platform processing efficiencies with their proven business and sales model."
Financial analysts value MPS because most banks don't have their own data processing unit. It generates extra revenue for Fifth Third and allows the bank to significantly cut expenses by handling its own processing.
According to the Cincinnati Enquirer, MPS contributed $62 million to Fifth Third's profits in 1999.
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