Tempo Boosts Merchant Base with Its Chase Paymentech Deal

Fledgling PIN-debit network Tempo Payments Inc. this week reported that Chase Paymentech Solutions LLC, the nation's largest merchant acquirer, is now offering Tempo acceptance. With Chase processing for more than 500,000 merchants, the agreement opens a huge new acceptance base to San Mateo, Calif.-based Tempo, though whether that potential is realized won't be known for some time. Chase Paymentech added Tempo to its line-up that includes conventional credit card and debit card acceptance as well as the automated clearing house and alternative networks because it wants to give merchants as many options as possible, Diane Donoghue, executive vice president and general manager, Retail Network Service, tells Digital Transactions News. “We want to be able to process all types of payment; we're not limiting ourselves to [major brand] debit and credit,” she says. “Also, because of the structure of the Tempo card, it is very easy for merchants to adapt it to their current point-of-sale terminals. It's a plug and play.” Tempo has positioned itself as a low-cost, retailer-oriented card option that costs merchants much less to accept than credit or signature-based debit cards, and lets them earn interchange on Tempo-branded cards they issue. Chase Paymentech will target Tempo acceptance at merchants that are especially receptive to PIN-debit cards, including convenience stores/gas stations and some grocery stores and other retailers, according to Donoghue. She wouldn't say how many such PIN-debit merchants Chase Paymentech has, but a release announcing the deal says Chase Paymentech accounts for more than 20% of PIN-debit transactions. Dallas-based Chase Paymentech will market the Tempo offering through its sales force, written materials and signs for merchants, and through meetings with groups of merchant clients. “Our agreement with Chase Paymentech extends the reach of the Tempo Payment Network and provides us with a strong industry ally,” Mike Grossman, Tempo Payments' chief executive officer, said in the release. “Chase Paymentech merchants exhibiting Tempo signage at the point of sale, alongside other payment networks, will strengthen our national brand recognition. It is our aim to provide all merchants with lowered costs and consumers with increased incentives.” Chase Paymentech will price Tempo transactions at the rates it offers for other PIN-debit brands, according to Donoghue. Pricing will be “very competitive,” she says, but she refused to disclose specifics. The addition of Chase Paymentech further strengthens Tempo's strong side, acceptance. The network already had 200,000 acceptance locations, and its other major merchant processors include some of the industry's largest: Fifth Third Bancorp's Fifth Third Processing Solutions and RBS Lynk as well as Fiserv Inc., owner of the Accel/Exchange PIN-debit networks. Tempo acceptors include such national retailers as Wal-Mart Stores Inc. and the CVS/Caremark Corp. drug-store chain as well as a number of regional and local retailers, primarily c-stores and grocery stores. National retailers, however, have been slow to sign on as Tempo card issuers so far; most issuance has been through the local and regional chains. But Tempo did take a step to boost its issuing side this month when partner HSBC Retailer Services, one of the top third-party private-label credit card issuers, added a loyalty component tailored to PIN-based cards (Digital Transactions News, April 5). Chase Paymentech is 51%-owned by JPMorgan Chase & Co.; processor First Data Corp. owns 49%.