NEBA Sale Will Close the Book on the Regional Bank Card Processing Associations

The pending acquisition of the processing business of NEBA (formerly the New England Bankcard Association), a Wakefield, Mass.-based bank card issuing and merchant-acquiring association, by processor Primax will mark the end of an era. Founded in 1969, NEBA is the last of the 12 original regional processing associations for the MasterCard network, which was then known as MasterCharge. In addition to transaction processing, the regional associations provided issuing and acquiring services to member banks.

Primax, which was formed as an offshoot of NEBA in the early 1980s, provided chargeback and fraud-detection services to NEBA members and serviced their merchant accounts. In addition, it provides processing services to credit unions, bank and non-bank card issuers and private-label card issuers. NEBA members, which processed transactions through First Data Corp., will be offered new contracts combining cardholder processing, acquiring and merchant servicing through Primax.

“We have a lot of history and shared resources between the companies and it made sense at this point to put them all together under one roof,” says Ted Keith Jr., the chief executive of Primax who holds the same title at NEBA. “This will streamline the marketing message to our customers and NEBA members.”

NEBA, which has 19 member banks, originally was chartered as a complete data-processing entity owned by its members. Founding members included Boston’s leading banks at the time such as Bank of New England, State Street Bank, BayBank and Shawmut.

As recently as the early 1990s, NEBA was operating in just the six New England states. As bank consolidation accelerated and caused some NEBA members to fall away, the association looked to expand its geographic footprint into New York and broaden its membership criteria to include community banks.

“The geographic expansion helped, but it was the outreach to small, community banks that really helped NEBA as there are a lot of them in New England,” says Jacques Breton, treasurer and co-founder of the Northeast Acquirers Association (NEAA), a regional trade association of independent sales organizations. “As a lot of the banks began to divest their merchant portfolios, NEBA’s management saw an opportunity to service banks’ merchant accounts, thereby sparing them the cost of having to hire a staff to do it. That was all done through Primax. In many ways, Primax was the forerunner of today’s ISOs.”

Keith agrees that NEBA’s long-term survival was due to the association’s ability to reinvent itself and expand its breadth of services through Primax, which also is based in Wakefield. By the early 2000s, NEBA had expanded its membership to include banks in the Caribbean as well as the Southeastern U.S. All the while, NEBA and Primax retained separate boards of directors, which enabled NEBA to retain its brand identity and Primax to establish its own.

“While the NEBA brand is ultimately going away, its legacy will live on in Primax,” says Keith.

NEBA’s legacy, according to Breton, is one of delivering quality service, dependability and integrity. “That’s how processors stick around in this business for the long term,” he says.

Terms of the planned acquisition, which was announced earlier this month, were not disclosed. The sale must be approved by NEBA’s membership, which Primax expects later this year.