Fidelity National Information Services is brainstorming with banks about new ways to use its debit card network.
FIS owns the fourth-largest U.S. debit card network, NYCE Payments Network, allowing its bank clients to enable money transfers via cards used by consumers.
Banks’ use of debit networks has become a higher profile issue following Capital One Financial’s completion of the Discover Financial Services acquisition last year. That’s because Discover includes the debit card network Pulse.
Capital One’s ownership of Pulse is expected to impact the market for card processing. The market will also feel the effects of FIS’ purchase of Global Payments’ card issuer services business, which expanded FIS’s credit processing market share.
FIS CEO Stephanie Ferris suggested last week that the market’s changed dynamics has prompted new strategic considerations about the company’s network. When Ferris was asked at a May 19 investor conference about the possibility of selling the network, she eschewed that possibility, but said the company has been talking with banks about other ways a network can be used.
“I have no interest in selling my network, but I do think there's really interesting things to do with my network, and we've been talking to various banks about that,” Ferris said, without elaborating. “It really depends on what banks want to do with their networks.”
“I think Capital One is an interesting first play, and we'll see if some of the other banks want to do something with networks,” she added, at JPMorgan’s Annual Global Technology, Media and Communications Conference.
Spokespeople for FIS didn’t immediately respond to requests for comment on details of the conversations with banks.
While the largest U.S. card networks are Visa and Mastercard, FIS processor rival Fiserv also owns networks.
FIS expanded its network with the acquisition last year of the Canadian company Everlink Payment Services, which has a historical connection to NYCE.
Ferris suggested new approaches to owning the network need to be weighed. “We value our network, but we also are very interested in doing strategic things,” she said.
Ferris touted the network as an important part of the company’s bank services segment. “Owning a network is highly valuable, whether it's a debit network or a credit network,” Ferris said.
The company highlighted how NYCE’s rising sales contributed to third-quarter earnings results last year. ”The NYCE network has been a particular bright spot with sales more than doubling and a pipeline growth of three times versus last year,” Ferris told analysts on a webcast to discuss the earnings in November.
