To adapt to changes in the payments industry, Ceridian, a Minneapolis-based human resources, payroll and payment card company, has split its payments business from its human capital management unit.
Its payments business will operate as Comdata Inc., and its human capital management business will operate at Ceridian HCM Holding Inc. By dividing into narrowly focused businesses, the companies can more nimbly develop new products and technology, says Stuart C. Harvey, CEO of Comdata and chairman of both organizations.
"We need to beat banks, they are our competitors. And we have to have better solutions and have them faster than banks," Harvey says.
The companies' majority owners and financial partners, funds affiliated with Thomas H. Lee Partners, L.P. and Fidelity National Financial Inc., will maintain their roles with both companies. David Ossip will be CEO of Ceridian HCM.
"The spinoff will help because when I do budget and capital allocation, I'm not feeding a corporate entity, we're feeding two corporate entities with different needs," Harvey says.
Comdata, which recently signed Lowe's as a client for fleet payments, will develop and sell payment products and technology that serve the fleet, health care and retail industries. Its most recent products include a mobile application for gift cards and technology that scores fuel purchases to gauge how efficient a driver is in purchasing. "It can manage driver behavior to get the best prices," Harvey says.
Other Comdata payments technology initiatives include using radio frequency identification for card-not-present payments at fuel pumps. Other companies in the fleet payment space include Fleetcor, which just purchased Telenav to add trading technology; and banks that operate their own fleet payments business.
On the HCM side, Ceridian migrating toward products delivered in a software as a service (SaaS) model. "We're changing the architecture to more of a cloud-based solution as opposed to a service bureau," Harvey says.