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First Data may sell off card-processing unit
The card-processing unit of First Data, one of the major processors of credit card accounts for banks, is now on its last legs. By the end of the month, First Data is expected to announce if it will sell its card-processing unit, which has been in the red for quite some time now.
The company plans to retain its Western Union money-transfer business and its merchant-processing unit, which handles credit card transactions for retailers. Both these operations are presently making profits.
While First Data may not be the first casualty in the race for technical and market supremacy, it is still a mighty fall for a former leader in the business. One of the reasons First Data lost steam was its determination to stick to the old technology. When it first began operations in 1992 as a spin off from American Express, it was way ahead of any rivals.
And consolidation sounded the death knell for the company. Nytimes.com reports:
First Data stuck with the same technology all those years, while Total System, or TSYS, overhauled its processing programs. Total System rolled out a new system, TS2, with great fanfare in 1994.
Read more: Parent Weighs Abandoning Credit Card Processing Unit
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