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In a strategic move, yesterday Total System Services Inc. (TSS - Free Report) extended its long-term alliance with the US-based Veracity Payment Solutions to continue to offer card payment solutions. However, other terms of the deal were not divulged.

The deal blends well with Total System’s client-growth strategies as it provides merchant acquiring services to Veracity’s over 12,000 global businesses that generate about $2 billion of transaction volumes yearly. On the other hand, Veracity appears to be confident about Total System’s much-acknowledged and secure card payment processing and point-of-sale solutions.

Total System has been growing its contract portfolio, which has got quite a fillip with the latest processing contract attainment from BancorpSouth, Bank Standard, Kenya’s Imperial Bank, Advanzia Bank, Bank of Ireland, Bank of Montreal, Swisscard, Cynergy Data, President’s Choice and Wal-Mart in Canada, while Bank of America extended its long-term contract for merchant and other card processing services through a new joint venture in 2010.

Last year, even Capital One Financial Corp. had extended its contract until 2017. With over 22 years in a business relationship, U.S. Bank’s recent agreement has been helping Total System to reach out the European markets. Furthermore, other alliances with Clearent and Caledon coupled with technological advancements through the TSYS PRIME card management solutions and Mobile App are further expected to drive growth going forward.

Overall, these high-profile long-term contracts are crucial for Total Systems to boost its business portfolio and top-line growth. This coupled with the complete acquisition of TMS last year and expansion into merchant acquiring services is expected to drive growth.

Going forward, we believe that the overall market stability and healthy impact of the regulations in the card industry will help recover the number of client accounts and long-term contracts in the long run. These efforts will also help the company mitigate risks related to currency and interest rates fluctuations along with stiff competition from dominant players such as Global Payments Inc. (GPN - Free Report) and Alliance Data Systems Corp. (ADS - Free Report) .

Total System carries a Zacks Rank #2, which translates into a short-term Buy rating and a long-term Neutral stance.

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