Concord EFS is to acquire neighbouring EFT network operator Star Systems.
Concord currently owns the MAC EFT network, which provides services to over 3300 financial institutions primarily in the Northeast and Midwest. The Star network delivers PIN-based debit payment services to 3500 financial institution members, and operates primarily in 22 states in the West, Southwest, and Southeast, plus the District of Columbia.
Concord is to issue 24.75 million shares of common stock for all of the outstanding shares of Star Systems' common stock. The merger is expected to be completed during the first half of 2001, subject to regulatory approval.
"This merger is evidence of our belief in the significant potential for growth in PIN-based debit transactions, which are the most secure, cost-efficient card-based payments available," says Edward Labry, Concord president. "Combining the MAC and Star networks will produce a national debit network with broad geographic coverage, improved efficiencies, and new on-line consumer products and services."
Of the 2.4 billion transactions processed by Star in 1999, 40% were payments made by Star cardholders at an estimated 500,000 point of sale locations. More than 136,000 ATMs and 80 million cards carry the Star brand. The MAC network, which processed 1.9 billion transactions in 1999, has 52,000 MAC-branded ATMs, plus an additional 7000 ATMs currently branded Cash Station but transitioning to the MAC brand in the coming months. The financial institution channel accounted for 47% of Concord' transactions in 1999.