JPMorgan Chase is bringing Washington Mutual's card processing in-house, terminating the distressed bank's current deal with Tsys.
Chase, which bought credit crisis victim WaMu's assets and liabilities in a deal arranged by the Federal Deposit Insurance Corporation in September, will pay Tsys an undisclosed fee for deconversion and termination.
The deconversion should happen by March, after which Chase will process the WaMu portfolio in house on a technology platform it licenses from Tsys.
Tsys says WaMu accounted for less than four per cent of its revenues in the first nine months of the year and losing the deal is not expected to have a material effect on its financial condition.
In better news for Tsys, Chase has extended a processing agreement for its Canadian card business until 30 April, 2012.
Earlier this week JPMorgan Chase revealed plans to axe about 9200 WaMu jobs, around 21% of the workforce. Up to 3400 pink slips are expected to be handed out to staff at WaMu's former Seattle headquarters. The bank is also cutting 1600 jobs in California, mostly in back- office operations.
Consolidation in the industry may yet account for more of Tsys' revenue as the vendor sweats on Wells Fargo's plans for Wachovia. Both banks are Tsys clients.