The announcement follows the signing in January of a Memorandum of Understanding in which the companies agreed to cooperate in the development, manufacture and sale of highly secure payment systems.

The distribution agreement represents the first concrete stage of that process and reinforces the long-term strategic vision shared by both companies. Its objective is to position Thales and Keycorp among the top three in the global payments market.

The next milestone in the relationship is the signing of a broader agreement for the next generation of Thales and Keycorp products. It is anticipated that agreement will be concluded in the coming quarter.

The distribution agreement announced today defines the terms and conditions under which Thales will supply its products exclusively to Keycorp for distribution and installation in its target markets, mainly in Australia, New Zealand and Canada.

By adding the highly regarded Thales Artema payment terminals to its product range, Keycorp can now offer a broader solutions portfolio to its customers.

Keycorp's Chief Executive Officer, Bruce Thompson, said the signing of the distribution agreement was an important step towards achieving the economies of scale and shared expertise that would allow both companies to prosper in the increasingly competitive global payments terminals market.

"Keycorp and Thales will be able to achieve much more by working together constructively than we could have hoped to attain on our own," Mr Thompson said. "This first stage of the relationship gives us a broader offering of solutions for our customers today and the next phase will map out the solutions for tomorrow.

"Having said that, our current product set continues to perform strongly. It is priced competitively and serves our customers well. So we'll continue to offer and support those products, in particular the K23, K71 and K78 family of payment terminals. We want to continue to build the momentum for those products, while supplementing our portfolio with the Thales technology," said Mr Thompson.

Christian F. Reiling, VP and Managing Director of Thales' e-Transactions activity, said it was gratifying to see the development of the Keycorp relationship progressing so smoothly.

"Our two companies have a shared vision for creating world class products. With our combined strength we are clearly one of the few global leaders in card payment and in the terminal industry world-wide," said Mr Reiling.