First Data Takes Over Banco Popular’s Mainland Merchant File

First Data Corp. announced Tuesday that it would process the merchant portfolio affiliated with Puerto Rico-based banking company Popular Inc.'s Banco Popular North America unit. The portfolio provides card-processing services for an undisclosed number of BPNA's 50,000 small-business customers in the United States. Banco Popular had outsourced the file to a top-10 processor that it wouldn't disclose, and the contract had come up for renewal, says Beth Anne Hastings, vice president of marketing and product development for Rosemont, Ill.-based BPNA. Part of the reason Greenwood Village, Colo.-based First Data got the business was that it already provided BPNA with other services, according to Hastings. Under terms of the so-called alliance agreement, which actually took effect about two months ago, First Data will own the portfolio but the two parties will share revenues. Neither would discuss specifics. Besides doing the processing, First Data will assign dedicated sales representatives to the alliance in BPNA's markets. “We feel it's a strong partnership because of the increasing use of cards,” says Hastings. The pact includes credit, debit, and gift card transactions and allows BPNA to offer next-day settlement for customers with a Banco Popular business checking account. Merchants also will get free Internet access to reconcile their business checking accounts, resolve chargebacks, and perform historical and trend analyses. Neither BPNA nor First Data would disclose charge volume from the portfolio. With an eye on the growing Hispanic market, Banco Popular has been expanding its mainland presence over the past decade and now has 141 branches in California, Florida, Illinois, New Jersey, New York, and Texas. While Hispanics remain the core customer base, not all the businesses in the merchant portfolio are Latino-owned, a spokesperson says. First Data reported on July 20 second-quarter net income of $436.4 million, up 11% from $391.9 million a year earlier. Total revenues grew 10% to $2.87 billion from $2.60 billion in 2005's second quarter. Segment revenues for First Data Commercial Services, the unit that includes the merchant-processing businesses, grew 11% to $1.03 billion from $929.7 million in the year-earlier quarter. Commercial Services' operating profit jumped 27% to $276.7 million from $217.3 million in 2005's second quarter.