Acquiring Revenue Climbs at First Data on Steady Transaction Growth

Merchant transactions processed by First Data Corp. grew 38% to 5.28 billion in the quarter ended March 31, sending acquiring processing fees up 19% to $682.7 million?or almost 13 cents per transaction–at the Denver-based processor, according to first-quarter figures released today together with comparisons to the year-ago period. Merchant transactions at First Data include credit and debit card payments as well as transactions processed from ATMs. First Data owns the Star System electronic funds transfer network, which links point-of-sale terminals and ATMs for PIN debit processing. On a negative note, the company's check-authorization and ?guarantee service sustained a 4% decline in fee revenue, dropping to $94 million in the quarter. First Data, which also manages accounts and processes transactions on behalf of card issuers, saw its U.S. card accounts on file increase 12% to 409.3 million. Issuer-related transactions, meanwhile, reached 1.84 billion in the quarter, shooting up 58%. Card-issuing fee revenue was $409.8 million, or almost exactly $1 per account, up 8%. In the same quarter, so-called consumer-to-business transactions, processed by First Data's payment-services division, which includes Western Union, jumped 8% to 39.6 million. These transactions include various First Data bill-payment services. Person-to-person remittances grew 18% to 25.3 million. This growth helped transaction-fee revenue for the division increase 14% to $976.5 million. Operating profit at the division slumped 4%, however, to $314.3 million, compared to a 20% jump in profit for merchant services, to $185.2 million. Overall, the company earned an operating profit of $518.9 million in the quarter on $2.48 billion in revenue.