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Author: Douglas Hayward, Dominique Raviart
Atos Origin is acquiring Belgian payment processing firms Banksys and Bank Card Company (BCC), bringing in an additional €309m in revenues and 1,100 employees.
Atos Origin had previously indicated it wanted to make mid-sized acquisitions in three of its growth areas where it is enjoying higher margins: medical BPO in the UK, stock exchange software and payment processing services. The acquisition also brings recurring revenues and fits nicely into Atos Origin's strategy to increase its share of recurring revenues. The deals also bring an increased presence in Belgium.
Both acquired companies will almost double the size of Atos Worldline, the payment services (accounting for two thirds of revenues), CRM and hosting unit of Atos Origin, to almost €700m on a pro-forma basis. Atos is not the only player aiming to consolidate the market. US giant First Data has made a number of acquisitions in this space in the past two years including GZS in Germany (revenues of around €76m), Austrian Payment Systems Services, Euro Processing International in Central Europe and FinecoBank in Italy. Other competitors include soon-to-be floated UK player Experian and US-based Total Systems.
The deal also reinforces Atos Origin in the banking industry. At present, many banks are reluctant to outsource much of their payments processing (beyond some credit-card operations) to outsiders. Suppliers such as Atos are hoping that the SEPA directive will push banks into a wholesale reassessment of their payment processes, not just for credit cards, prompting them to go down the outsourcing route after deciding that payment processing is a non-core activity that adds little value.
So far so good, but the problem is that many observers suspect that if the banks really do outsource a wide spread of payment processing, it won't be to IT services providers, but rather to joint ventures created by financial-services players. In other words, banks will "keep it in the family".
By buying Banksys and BCC, Atos Origin probably hopes it is marrying into the financial-services family, with the hope that the son-in-law will be considered "family" enough to be trusted with responsibility for widescale payment-processing outsourcing.
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