AIB has teamed up with payment processor First Data in a "merchant acquiring" joint venture to improve and expand the bank's e-payment and credit card services in Ireland, Britain and Europe for its 30,000 merchant customers.
A merchant acquiring business processes credit card transactions on behalf of merchants. First Data will hold the controlling interest in the joint venture, which will trade as AIB Merchant Services in the Republic. The bank will hold the remaining 49.9 per cent of the shares in the company.
It is expected that AIB's card acquiring businesses in the Republic and the UK will process about 140 million and 13 million transactions respectively in 2007.
As part of the AIB-First Data transaction, which will be completed before the end of the year, First Data will have an option through the joint venture to acquire AIB's card acquiring business in the UK.
The total value of the gross assets of the Irish and UK businesses is about €5.5 million and the transaction is expected to have a neutral effect on AIB's earnings per share in 2008.
About 30 staff in AIB's business development and sales division will move to the joint venture company.
Donal Forde, managing director of AIB, Republic of Ireland, said that First Data was providing the hardware in the transaction, including expertise on technology and fraud management. He said that the bank saw huge potential in growing its merchant acquiring business, particularly in the UK.
AIB and First Data will be involved in the day-to-day running of the joint venture and will be represented on its board of directors.
Mr Forde said that the joint venture will provide "an ideal platform for business expansion and profitable growth in a Single European Payments Area (SEPA) environment."
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)