News

First Data to expand ATM activities in Australia with purchase of Cashcard

December 22, 2003

DENVER - First the United States, then the rest of the world.

First Data Corp. (NYSE: FDC), which last week got a go-ahead from the Department of Justice to acquire Concord EFS, says it has signed and entered into a Merger Implementation Agreement to acquire 100 percent of the shares of Cashcard Australia Limited, a leading electronic payments service provider in the Australia.

According to a news release, the transaction remains subject to Cashcard shareholder and regulatory approval. Financial terms of the transaction were not disclosed.

"This transaction will allow for First Data's entry into the fast growing Australian merchant ATM deployment market and further demonstrates our commitment to Australia and the wider Asia Pacific region," said Pam Patsley, president of First Data International, in the release.

According to the release, the acquisition will result in the expansion of electronic services such as credit and debit POS processing, deployment of merchant ATMs, check authorization and money transfers.

Founded in 1983 as a shared ATM network for Australian Building Societies, Cashcard now provides a range of services to other major financial institutions and retailers, as well as operating a large merchant ATM acquiring network.

"The combined organization should make for a more competitive EFT processing industry and will allow First Data to participate more fully in the merchant ATM deployment business," said Greg Baker, Cashcard's managing director.

The transaction is also subject to Australian Court approval and other closing conditions, according to the release. First Data anticipates closing the transaction in the first quarter of 2004.

Cashcard owns more than 5,000 retail ATMs. Its October 2002 purchase of rival ATM deployer Electronic Banking Solutions kicked off a wave of acquisition among Australia's independent ATM companies. (See related stories Australia's Cashcard grows with purchase of EBS and ISO consolidation continues in Australia)

Australia's government reportedly may soon give its approval to deployers collecting surcharges at ATMs.

According to a September report in the Sydney Morning Herald, Australian consumers make almost half of all their ATM transactions on "foreign" machines. Bank customers made 320 million transactions on foreign ATMs in 2002 and 364 million at their own ATMs, reported the Herald, citing figures from the Reserve Bank of Australia.

Although banks do not divulge how much they earn from ATM transactions, the figures suggest consumers are paying more than $500 million in fees each year to use foreign ATMs. (See related story Almost half of Australian ATM transactions occur at 'foreign' machines)