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The more than 350 independent sales organizations that work with National Processing Co. should anticipate work as usual once Fifth Third Processing Solutions LLC completes its acquisition of the Louisville, Ky.-based merchant processor.

“No changes are anticipated,” Lynn Rhoads, a Fifth Third Processing spokesperson, tells ISO&Agent Weekly. The companies expect to complete the deal later this year.

In the deal, announced Sept. 15, Fifth Third Processing would gain access to the approximately 240,000 small and midsize merchants working with NPC. The Cincinnati-based payment processor’s expertise has been with large, multi-location merchants. The combined organization would have approximately 420,000 merchant locations.

Similarly, NPC could find financial-institution customers for its products and services, Rhoads says. “The services, products and infrastructure that NPC [has] today is a complimentary product suite that we can immediately begin to offer to our 3,000 financial-institution clients who have commercial clients that need merchant-processing” services, she says.

The Next 60 Days

As with many acquisitions involving processors and acquirers, Fifth Third Processing will have to address the question of how to deal with a multiplying number of payment platforms–the actual software infrastructure that routes transactions.

Any plans beyond getting the purchase agreement finalized will be addressed over the next 60 days, the processor says.

“The leadership teams of both organizations will begin to develop that integration plan to ensure that we are creating synergies,” Rhoads says.

Processing platforms, sometimes split as front-end and back-end operations because one manages transactions before authorization and the other post-authorization, are vital to processors. And changing a platform is akin to changing a tire on a moving car, says Robert Dodd, an analyst at Memphis, Tenn.-based Morgan Keegan & Co.

“You have to transition in real time, and if there are any issues a processor can have problems with merchants,” Dodd tells ISO&Agent Weekly.

For example, data formats may change, which could affect how merchants receive transaction information, he says, noting any ensuing confusion could provoke a merchant to switch
payment providers.

ISOs also could become frustrated with a platform migration for similar reasons, Dodd says.

Multiple platforms also mean a processor must make programming changes to each platform separately instead of just once with a single platform, Dodd says. Additionally, most processors have at least two data centers to support each platform, and these carry high support costs, he says.

As such, most processors make deliberate and unhurried migrations, Dodd says.

Global Payments Inc., an Atlanta-based payment processor, is migrating to a single worldwide platform called G2, an effort that “will be pushing a 10-year process,” Dodd notes. Those processors with a single platform, such as Elavon Inc., also based in Atlanta, typically benefit from having lower support costs, he adds.

“It can be done,” Dodd says.

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