Telecoms and computer group ITG has expanded its credit card services business with an agreement to upgrade, maintain and market Ulster Bank's credit card terminals in Ireland.
Neither side would put a value on the deal, but ITG's chief executive, Mr John Nagle, said the company hoped to install up to 6,000 terminals in conjunction with Ulster Bank over the next 18 months.
As part of the five-year agreement, ITG will replace Ulster Bank's existing terminal base with faster, more up-to-date machines. The company also plans to market its terminals and infrastructure directly to merchants, in effect acting as an acquiring agent for Ulster Bank. "We want to help our partners, Ulster Bank, develop the credit card market and grow it," said Mr Nagle. "To do that, we need to do more than just install and maintain terminals as we do now. We want to help operate and run the terminals."
By owning the terminals and leasing them to merchants, ITG will increase its own revenues.
Mr Vincent Feeney, head of card products at Ulster Bank, said: "The key thing for us is that ITG's skills in telecommunications and terminals complement our own skills in processing and in sales and marketing." Over the last two years, Ulster Bank has doubled its share of the merchant acquiring business to around 20 per cent. It hopes to increase this to 30 per cent as a result of the alliance with ITG. ITG, meanwhile, hopes to expand its new terminal leasing and management model to Britain, where it currently maintains 170,0000 terminals, and ultimately to Europe, Mr Nagle said. Ulster Bank's parent is NatWest Bank, one of the largest British banks.
"Our major growth in the coming year will come from credit card services. We will see a significant uplift in revenues from card services," Mr Nagle said.
ITG reported pre-tax profits of £1.7 million (€2.18 million) on turnover of £19.3 million (€24.5 million) for the year to April 30th last. At its annual general meeting in Dublin yesterday, the company said the contract with Ulster Bank would have no financial implications for ITG until its next financial year.
