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Alliance Data Systems Corp., a provider of loyalty and marketing services, is moving its nearly 24-year-old in-house private-label card processing operations to Fiserv Inc. The move is part of Alliance Data’s strategy of investing in the development of new digital services for its customers, such as offering credit options to e-commerce shoppers at checkout, says the company, which started out in 1996 with the merged private-label card operations of two chains, J.C. Penney and The Limited. It now manages more than 100 card programs for retail companies.
“After looking at our platform, we decided it didn’t make sense to continue investing in improvements in processing when we could get access to more scalability and financial services technology from Fiserv,” says Nick Barnes, senior vice president and chief information officer for Alliance Data. “The savings from this move will allow us to reinvest in creating a better digital environment for our customers.”
The full transfer is expected to be completed in a couple of years, Barnes says.
Key to Alliance Data’s strategy is creating online services for consumers through multiple touch points, such as self-service capabilities, the company says. Alliance Data’s customers include cosmetics chain Ulta Beauty Inc. as well as BJ’s Wholesale Club, Sally Beauty, and Toyota.
Earlier this month, Alliance Data launched its Enhanced Digital Suite, a collection of marketing and credit applications intended to increase customer awareness and adoption of payment options by promoting credit earlier in the shopping experience. The company describes the applications as a way for brands to capitalize on online trends while increasing sales and customer-acquisition rates.
Digital platforms have been undergoing rapid growth in recent months as more consumers shift their purchasing habits away from physical stores to e-commerce, says Barnes. “We saw 10 years of growth during the first quarter this year,” Barnes adds. “The digital landscaping is moving fast, and the ability to capture the consumer at the point of sale by offering them the opportunity to apply for and use payment options online is key.”
During the second quarter of 2020, Fiserv reported revenues of $3.47 billion. Fiserv’s financial results include the performance of First Data Corp., which Fiserv acquired in 2019.
