Co-Op Financial Services Acquires Credit-Union Processor TMG for $100 Million

Co-Op Financial Services, the big credit-union service organization based in Rancho Cucamonga, Calif., announced Monday that it had acquired Des Moines, Iowa-based payment processor TMG for $100 million.

Co-Op had been the minority owner of TMG, until recently known as The Members Group, and bought out the rest of the firm’s shares from the Iowa Credit Union League. TMG services approximately 400 credit unions and processes transactions for 6 million payment card holders across the U.S. and Canada.

Combined the two organizations will service 3,500 credit unions with about 60 million members. In addition to card processing, Co-Op’s network links nearly 30,000 ATMs and 5,000 credit-union branches for shared services. The firm also provides mobile payments and banking, and security services.

With the TMG acquisition, Co-Op, which said it is the nation’s largest CUSO, “becomes a fully-integrated, comprehensive payment-services company, realizing the vision of the original partnership formed by the two companies in January 2012,” according to a Co-Op news release.

“The combined forces of TMG and Co-Op provide credit unions with a single point of entry to the most innovative, tailored, cost-effective products and services as they prepare for a rapidly transforming payments landscape,” Todd Clark, Co-Op’s president and chief executive, said in a statement. “We will offer the market greater integration of the two company’s product lines and a simplified, predictive client experience. We will also leverage artificial intelligence, custom business intelligence, consultation, and deeper security offerings that marry machine learning and human analysis to perfect authentication, reporting and anticipation of fraud.”

Co-Op said the TMG acquisition complements its $25 million investment in technology and product innovation planned for 2017. Co-Op also announced eight executive additions and changes, including the appointment of Shazia Manus, TMG’s former CEO, as chief product and strategy officer, reporting to Clark. Jim Hanisch, formerly Co-Op’s executive vice president of network operations and corporate development, was appointed chief operating officer. And three new executives are joining Co-Op from Fiserv Inc., First Data Corp., and the Federal Home Loan Mortgage Corp., better known as Freddie Mac.

“We believe the combining of Co-Op and TMG adds up to a ‘dream team’ of the payments and financial-services industry,” said Clark, who came to Co-Op last year after heading First Data’s Star debit network. “It’s an exciting time.”