Debitman Card Inc., which has touted its proprietary network to merchants as a low-cost alternative to other debit systems, is trying to expand its focus and challenge costlier types of payments.
To support this effort, the San Mateo, Calif., company made two announcements Tuesday - it has a deal with Fiserv Inc. that will make its debit network more widely available to merchants, and it has changed its name to Tempo Payments Inc. to illustrate its broadening marketing opportunities.
Michael S. Grossman, the company's chief executive, said that it will continue to focus on supplanting the major debit networks at the point of sale, but that he is looking at offering other types of products and services, including credit and prepaid cards.
"In any situation where interchange is exorbitant, we think there's an opportunity for our solution," he said in an interview Tuesday. "That is broader than debit alone."
As a result of the name change, the company has retired its "Debitman" logo, a yellow superhero cartoon figure. The character, though distinctive, rubbed some consumers the wrong way, and his name, tied too closely to debit payments, did not reflect Tempo's new strategy, Mr. Grossman said.
"The Debitman name was inherently limiting," he said. "The name was also very polarizing. Some people liked it a lot. Some people disliked it a lot."
Though Tempo is keen to eventually expand its payments offerings, Mr. Grossman said he has no concrete plans for specific products, or even a timetable. "What we have is a lot of conceptual ideas of how the brand might evolve," he said. "We want to make sure we have a name that allows us to pursue these ideas without causing a lot of confusion. We're a payments network. We're not a debit network in the long run."
Its current business model is focused on persuading merchants to issue and accept its cards. It routes payments initiated with the cards across the automated clearing house network, which is less expensive for merchants than either debit or credit networks.
Issuers receive a discount of 6 to 9 cents when the cards are used at the issuers' stores, as well as a share of the transaction fee when the cards are used at Tempo's other merchant-clients.
Stores that only accept the cards also get low transaction fees, according to Tempo. The company charges merchants a flat fee of 15 cents a transaction.
Though settlement runs on the ACH rails, Mr. Grossman said, "the authorization process requires connections with the same processors or gateways that other debit networks leverage."
The deal with Fiserv's debit unit, Fiserv EFT, is aimed at making the Tempo network available to more merchants, he said. "Fiserv, as the leading gateway, is a perfect partner. They serve as a gateway between merchants and many processors. It fits in very well with what we're doing."
Vincent Forte, the senior vice president of product at Fiserv EFT, said that the Tempo connection would be operational in late January, and that his company would work with acquirers to offer the Tempo service to merchants around the country.
Mr. Grossman would not provide statistics on Tempo's card issuance, acceptance, or transaction volume, but the company's Web site says its card is accepted at more than 200,000 merchant locations.
The company scored perhaps its biggest coup in November of last year, when Wal-Mart Stores Inc. agreed to accept the cards.
Mr. Grossman said that Tuesday's announcement also marked the start of a marketing campaign, which will continue into next year, aimed at boosting the profile of Tempo's fledgling network.
"We're building a brand. Our goal is to make it pervasive and well known, like the best-known payment networks, Visa, MasterCard, and American Express," he said.
Alenka Grealish, the manager of the banking group at the Boston research and consulting firm Celent LLC, said Tempo faces an uphill battle in tackling the giants of retail payments. "It's very hard to challenge the incumbent. It's a scale game."
However, she said that payment card interchange is marked by "oligopoly pricing," which "always makes the market ripe for an upstart to come in."
Tempo could become a catalyst for driving down interchange rates, or it could find a niche in serving small retailers, such as corner stores and coffee shops, she said.
In addition, Tempo has in its corner Wal-Mart, which has battled Visa and MasterCard in the past over interchange fees, Ms. Grealish said. "They've got incredible clout. They're on the side of lower-cost alternatives to conventional interchange."
If Tempo could figure a way to get Wal-Mart to issue its cards, perhaps in conjunction with a loyalty program (something the Bentonville, Ark., retail giant does not have now), "things could just catch fire from there," she said.
