First Data Corp.'s OmniPay platform is processing Internet transactions for merchant customers of HSBC Holdings PLC in Europe and may eventually do so in other places.
The Denver company, which began doing so Nov. 1, announced the three-year deal Wednesday.
HSBC has processed online merchant transactions, but not cross-border ones. The OmniPay relationship is for "companies that want to trade globally and want a bank that can follow them across markets as we do with our payments and cash management," said Mark Robinson, the managing director for HSBC's group cards division.
A First Data spokeswoman said the deal will let the merchants process international transactions and pay the same interchange fee they would pay for local ones.
Initially, "the emphasis is on e-commerce, Internet-type merchants," which are more likely to operate in multiple countries, said Pamela H. Patsley, the president of First Data International.
The deal will not affect the one that Global Payments Inc. struck in September to process transactions for HSBC in China, India, Taiwan, Hong Kong and Singapore, and other parts of Asia, according to Mr. Robinson.
"The global merchant really wants to see a single point of interaction, a single consistent system rolled out, which is what we're offering as part of our cash management proposition," he said. "The traditional acquiring in-country, dealing with national merchants, brick and mortar stuff is where we work with Global Payments."
However, it is quite possible that e-commerce transactions in Asia could be processed on the OmniPay platform, Mr. Robinson said.
Global Payments agreed to pay HSBC $67.2 million in cash to acquire 56% ownership of the joint venture they are forming to handle the transactions; HSBC would own the rest.
HSBC also agreed to give the venture its existing merchant acquiring business in the 10 Asian countries and territories where the venture would operate. That business has about 40,000 customers in those areas and generated revenue of about $50 million there in 2004.
Jane Forbes, the vice president of investor relations for Global Payments, said it could process for Internet-only merchants, but "we choose not to, because the risk profile for Internet-only merchants is much higher."
Her company's deal with HSBC is expected to be completed by September, she said.
Lawrence S. Berlin, an analyst for First Analysis Securities Corp., said that OmniPay would most likely "be used where Global Payments isn't." HSBC has merchant relationships in far more countries than the ones where it is working with Global Payments.
Different countries have different rules governing security and how much a company can charge, Mr. Berlin said. "One of the things that OmniPay does better than other platforms to date is it allows you to use one platform for all these countries. And it adjusts to all the different oddities of each."
