In an effort to increase its sales abroad, the payments technology vendor ACI Worldwide Inc. has acquired Euronet Essentis Ltd., a U.K. provider of card issuing and merchant acquiring software.

Jim Schlegel, the senior marketing manager of ACI's product management organization, said the Euronet Worldwide unit's payment processing technology is better than ACI's existing products for handling transactions in several regions outside the United States.

ACI's existing application "failed to meet the needs of the core market," Schlegel said in an interview Tuesday. "It serves niche markets, but is not a globally deployable solution."

For example, he said the software was designed to handle transactions authorized by signature or PIN, the two standard methods in the United States, but "had a couple of shortcomings in its design that" made it a poor fit abroad.

Adil Moussa, an analyst at the Boston market research company Aite Group LLC, said that the pairing "completely makes sense in the EMV arena," and that buying an established product line would be more efficient than "having to bring the ACI platform around the world."

Much of the world is shifting away from the standard magnetic stripe payment cards that are used in this country to smart cards, which feature a security chip and adhere to the EMV Integrated Circuit Card Specification. This transition, Moussa said, also makes some U.S. payments technology incompatible in regions that use EMV.

The two companies' products "complement each other," Moussa said. ACI, of New York, dominates the back-office payments market, "and Essentis does the same thing, but goes global."

Schlegel said ACI does business in about 90 countries, including regions with developing economies that are starting to adopt electronic payments, such as China and India, and places with more established payments systems that may be ready to update their infrastructure, such as Japan and South Korea.

The Essentis software has what Schlegel called "multiplicity" features - it can handle multiple currencies and multiple languages and works with multiple financial companies.

"What it does is it enables us to better develop card management and merchant management systems" to sell abroad, he said.

ACI said the purchase would not affect its 2009 financial results. The acquisition was announced Tuesday; the price was not disclosed.

Moussa said ACI is the largest provider worldwide of back-office financial services technology. "Nobody else is even close," he said, and while several competitors are trying to gain share from ACI, the Essentis software would help it retain its dominant position.

The deal includes the Essentis intellectual property, and its roughly 40 employees who will move to ACI. The Essentis office, in Watford, is about "100 meters from the ACI offices there," Schlegel said.

It helped that many of the employees at the two companies knew one another, Schlegel said.

"This deal wasn't struck over a pint at the pub," he said, "but there are some personal relations between the staff."


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