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On Thursday, Total System Services Inc. (TSS - Analyst Report) announced that Tinkoff. Credit Systems Bank’s licensing platform has been upgraded to PRIME 4, which is Total System’s latest solution for card issuing and merchant management. Moscow-based Tinkoff is the first company to establish a mono line credit card business in Russia.

Tinkoff has been using the PRIME platform in order to issue its MasterCard-branded Tinkoff Platinum credit card for a long time and has issued over 1.7 million credit cards in a four-year period. The company intends to use the PRIME 4 technology to enhance operational efficiency, cut costs and expand its product portfolio.

The association between the companies is mutually beneficial. On one hand, the business brought in by Tinkoff helps in generating revenue for Total System. At the same time, it also enables Tinkoff to utilize the technological proficiency of Total System, thereby leading to cost reduction and revenue creation for the company.

PRIME 4 is stronger, faster, more efficient and secure compared to the previous version. It offers instantaneous online authorization and switching, fraud detection, dispute handling and risk and ATM management. As a result, various banks have allied with Total System to use the technology.

In November 2011, Total System announced an agreement with Bank Standard, the largest private bank in Azerbaijan, to license its PRIME 4 card and merchant management solution. Earlier, in October 2011, the company also announced a deal with Imperial Bank, Kenya for providing PRIME 4 to manage Imperial’s Visa credit, debit and prepaid card portfolio in Kenya and Uganda.

Total System specializes in providing the latest payment solutions and competes with companies such as Global Payments Inc. (GPN - Snapshot Report), Green Dot Corporation (GDOT - Snapshot Report) and Equifax Inc. (EFX - Analyst Report). Its PRIME platform is used by over 130 clients in 70 countries spanning Europe, the Commonwealth of Independent States (CIS), Middle East, Africa and Asia.

Total System currently carries a Zacks #3 Rank, implying a Hold’ rating for the short term. Moreover, considering the fundamentals, we maintain our long-term ‘Neutral’ recommendation on the shares.

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