Expanding its debit card portfolio in Ireland, yesterday Total System Services Inc. (TSS - Analyst Report) entered into a strategic alliance with KBC Bank Ireland, which is part of the Europe’s leading global financial services provider – KBC Group.
KBC Bank has a history of operations of over 40 years in the fields of banking and business development. This bank is currently armed with over 700 employees across Ireland’s Dublin, Cork, Limerick, Belfast and Galway.
As per the deal, Total System will now process KBC Bank’s debit card portfolio through its best-in-class TS2 platform. The partnership also complements the company’s strategy to bolster its relationship with bank’s customers as it plans to offer risk management, fraud avoidance and other support services on these cards.
Overall, the alliance is expected to strengthen the card processor’s client base and payment processing network in Ireland. Moreover, the new contract should enhance Total System’s payment volumes and a number of processed transactions, thereby supporting the financials.
Striding on the Global Growth Track
Total System has been strengthening its clientele by offering customized and flexible processing solutions to all its partners across the globe, primarily in the merchant acquiring space. Additionally, the company is making efforts to tap opportunities in the recovering markets through high-grade technology.
However, Total System is consistently challenged by strong competition, currency fluctuations along with stringent regulatory reforms, which have affected the pricing and credit allocation of the company. Yet, we believe that a healthy business model, strategic acquisitions, alliances and technical competence are expected to consistently drive growth within Total System. This in turn will enhance capital deployment to boost shareholder confidence. An optimistic guidance for 2013 and the recent NetSpend acquisition also boost optimism.
Total System is scheduled to release its second quarter earnings after the closing bell on Jul 23, 2013. The Zacks Consensus Estimate for the upcoming quarter stands at 34 cents per share, down about 4% from the year-ago quarter. However, the Zacks Consensus Estimate for full-year 2013 is pegged at $1.42 per share, up 10.4% from 2012.
While Total System carries a Zacks Rank #3 (Hold), other strong performers in the financial sector include AmTrust Financial Services Inc. (AFSI - Snapshot Report) , Heartland Payments Inc. and Official Payments Holdings Inc. . All these stocks carry a Zacks Rank #1 (Strong Buy).