The Bell Is About To Ring for an Independent Metavante

A representative of Metavante Corp. will ring the opening bell Friday at the New York Stock Exchange in a ceremony that will cap seven months of work since Marshall & Ilsley Corp., the bank-holding company that founded Metavante in 1964, announced in April the banking services and payment processor's planned spin-off. The latest preparations include the creation of two new divisions and the naming of three new divisional presidents in the Milwaukee-based company's Payment Solutions Group, the unit that accounts for 60% of Metavante's $1.5 billion-plus in annualized revenues. The first new division is called Issuing Solutions and includes such bread-and-butter services as credit and debit card processing, call centers, and card personalization. A flashier component is what the company calls Metavante Prepaid Solutions, which includes the merchant-branded prepaid gift and loyalty card programs for small and mid-size companies that Metavante obtained with its January acquisition of Valutec Card Solutions Inc. John Focht, who recently came to Metavante from U.S. Bancorp, will head the new division, which also offers so-called open-loop prepaid cards. Although Metavante already has a presence in 32 countries, Frank D'Angelo, Payment Solutions group president, tells Digital Transactions News that prepaid cards will be the leading edge of a new international thrust. “We see that as our initial opportunity,” says D'Angelo, adding that Metavante is targeting Europe and the Asia-Pacific region. Foreign banks are much more likely than American financial institutions to handle payment services in-house, though that's beginning to change?a shift that's turbo-charging the international divisions of Metavante rivals such as First Data Corp. and Total System Services Inc. (TSYS). Metavante's second new division is called Acquiring Solutions and is headed by Bruce Hopkins, an 11-year company veteran. The division, which includes merchant processing, biller-direct electronic payments, and ATM driving and acquiring, also takes in the Link2Gov unit that handles payments on the federal, state, and local levels, including federal income taxes. Metavante also named Jeff Lewis, a payments executive who's been with the company for 22 years, as division president of Metavante ePayment Solutions. This existing division supports Monitise Americas, the company's recently announced joint mobile-payments venture with Monitise plc, a European provider of secure mobile banking and payments services whose Monitise Americas unit operates a mobile-payments system in the United States. Metavante ePayments Solutions also provides consumer bill-payment and presentment services, ACH processing, and call-center services. The other three divisions in D'Angelo's group are Payment Network, which includes the NYCE EFT network; Heathcare Payment for capturing that emerging market; and Image, which was moved into D'Angelo's tent from another part of the company and takes in check processing, imaging, and distributed capture. “This structure positions us for growth,” says D'Angelo. “We think it parallels a lot of financial institutions.” According to a recent Metavante presentation for investors, Payment Solutions has had a compounded annual growth rate of 22% since 2004 and has operating margins of about 30%. In all, Metavante has 8,600 clients, mostly financial institutions. The company says it processes 74 million debit cards, or 20% of the total market, handles 200 million annual bill payments, and provides the system backbone for 22 million client accounts. On Monday, Metavante announced its 10-member board of directors, headed by Chairman Dennis J. Kuester. The board includes three representatives of Warburg Pincus LLC, the private-equity firm that will own 25% of Metavante after the spin, with M&I shareholders owning the rest. President and chief executive Frank R. Martire also is on the board. Chief executives or other ranking executives usually ring the NYSE's bell when a new stock debuts, but Metavante is giving the honor to a long-time data-center employee, according to D'Angelo. Metavante formally will be known as Metavante Technologies Inc. and trade under the symbol “MV.”