Saturday , December 14, 2024

Heartland Drives up Net with Expanded Merchant Base, Card Volume

Heartland Payment Systems Inc., one of the few publicly traded independent sales organizations, today reported its revenues jumped 39% in the first quarter, to $236.8 million, on a 34% increase in transaction volume, to $9.2 billion. Net income for the period came to $4.39 million, a 63% increase. The Princeton, N.J.-based company says it now processes card transactions for 116,400 mostly small and mid-size merchant locations, up 24.1% from the same time a year ago. Helping to drive volume and revenue, Heartland reports, is that same-store sales at these merchant outlets increased 7.1% in the quarter. The company's financials indicate its interchange expense rose 41% over the year-ago period, to $172.2 million, or 1.87% of total processing volume. Referring to major investments in technology, Heartland chief executive Robert O. Carr said in a statement that 76% of new merchants and 59% of overall transactions during the quarter were processed on HPS Exchange, an internally built front-end platform to handle authorization and other functions. At the same time, the company “committed significant resources,” Carr said, to converting merchants to its back-end system, known as Passport, for settlement processing. Some 97% of Heartland's merchants are now on the Passport platform, Carr said, “although our first-quarter expenses rose as we expedited the process.” On the marketing side, Heartland increased its direct sales force to a head count of 1,074, up 64 from the end of 2005. Total first-quarter expenses grew 40%, to $230.5 million. A member-service provider for KeyBank N.A., Cleveland, 9-year-old Heartland went public last summer. In February, it acquired Debitek, a Chattanooga, Tenn., provider of closed-loop stored-value systems, from terminal-maker Ingenico Corp. (Digital Transactions News, Feb. 13). A month earlier, it bought a stake in Parcxmart Technologies Inc., which provides card-based payment systems for parking meters and merchants selling small-ticket merchandise.

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