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Thomas Bell, president of First Data's Financial Services Division, was named CEO of the new firm, Bank of America Merchant Solutions LLC. First Data owns 48.5 percent of the venture, Bank of America 46.5 percent and Rockmount Investments LLC the remaining 5 percent.
Bell said Rockmount was involved for "tax and legal" reasons, Reuters news service reported. Who owns Rockmount was not disclosed.
Asked on a telephone press conference what could be done with the new company that First Data could not do without Bank of America, Bell referred to the "breadth and depth of relations" that Bank of America has with its customers.
The new firm is an "opportunity to bring initiatives from both sides to the table," he said.
Debit, credit and prepaid cards, checks and electronic payments will be covered by the new company.
"Mobility is the obvious focus point," Bell said.
"We believe payments will move onto the phone via some type of electronic wallet or some other form. We believe being partners with the bank allows us to be at the front line bringing that innovation to the table."
Nancy Etheredge, a First Data spokeswoman, said the creation of the new company would have no effect on Omaha operations. First Data employs about 5,000 people in Omaha, where it processes credit, debit and other payments for card-issuers, such as banks, and businesses that accept card and electronic payments.
Omaha falls under First Data's Financial Services division, and Etheredge said external candidates are being sought in the search for a successor to Bell.
Bank of America is putting all 240,000 of its "merchant relationships" into the new company. First Data is contributing 140,000. Etheredge said she didn't know the total number of such relationships held by First Data, which serves 5.3 million merchant locations.
Bell said the new venture was not an attempt by Bank of America to raise capital.
"This has really been a strategic discussion we have been working with Bank of America on now for well over a year," he said, suggesting the talks predate the struggle with capital problems that Bank of America and other major banks have.
Financial effects of the deal on each company will be covered when they disclose second-quarter earnings within the next several weeks, according to the announcement.
Etheredge said First Data and Bank of America are contributing employees to the new operation. Those employees in time will go on the Bank of America Merchant Services payroll, she said. The new unit will be based in Atlanta, where Bell is based.
Contact the writer:
444-1081, virgil.larson@owh.com
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