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First Data: Global Payment Processor

October 22, 2012

For any economy to function they must be payment of goods and services. It used to be barter now money is used. Whether its cash, credit, or done through the Internet payment has to be executed and completed. We take it for granted but there are companies that make these payments possible. One of these companies is First Data one of the world’s largest electronic payments processors.

The company traces it origin with the founding of TeleCheck in 1964. It provided check verification and collection services to merchants and financial institutions.  In 1976 First Data became the first processor for Visa and MasterCard bank-issued credit cards.

American Express (AE) became the majority owner of the company buying 80 percent of it in 1980. AE bought the 20 percent balance of the company by purchasing 5 percent each year until completed in June 1983.  First Data then went international with card processing operations in England in 1991.

AE spun off First Data in 1992 with an IPO in the New York Stock Exchange.  The next two decades saw the company’s continued growth organically and through merger and acquisitions. It also continued its international expansion.

MoneyGram was actually a part of First Data and was divested in 1996. Another well-known company that used to part of First Data is Western Union. It was spun off in 2006.

First Data became a private company when it was acquired by KKR in 2007. The change in ownership has no altered the company’s continued growth and expansion.  Today the company offers a range of secured funds transfer and allied services such as credit card payment processing, authentication and fraud protection, check guarantee, point-of-sale (POS) services, and electronic payment management.

First Data operates in 34 countries. In 2011 revenues stood at $10.7 billion. The company has 24,000 employees, 6.2 million merchant locations, and deals with 4,000 financial institutions.

Aside from these impressive figures First Data performs a service that has become an integral part of how financial transactions are made.

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