STRATEGIC PARTNERS
April 2, 2003
NEW YORK -- Soon after confirmation came that Greenwood Village, Colo.-based First Data Corp., the world's biggest credit card processor and owner of Western Union, had forged an agreement to buy Concord EFS, a dominant force in both PIN-based debit and ATM transactions, speculation began as to how consumers might be impacted.
The Public Interest Research Group (PIRG), a consumer watchdog group based in Washington that has issued several reports on ATM fees, believes that consumers may end up paying higher transaction fees following the $6.75 billion merger.
"There is huge money in the business of transaction fees and if there are fewer companies with more market share, down the line consumers will pay with higher fees," said Edward Mierzwinski, PIRG president, in a Newsday report.
Jeffrey Green, editor of EFT trade publication ATM&Debit News, took a less definitive position in USA Today. "Theoretically, this deal creates efficiencies, so costs should go down. But history suggests that doesn't always happen," he said.
First Data's chairman and chief executive Charlie Fote said during an April 2 conference call that the combined company would offer more electronic payment options for financial institutions, retail merchants and their customers.
The EFT megamerger will close in the third or fourth quarter, if it passes regulators' scrutiny. Some industry analysts said they expect First Data to sell its 64 percent stake in the NYCE network, according to both Newsdayand USA Today.
The combined company is expected to generate $10 billion in annual revenue.
