First Data

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First Data Corporation
Private
Industry Financial services
Founded 1971 (1971)
Headquarters Atlanta, Georgia, United States
Key people
Frank Bisignano,
Chairman & CEO
Products Merchant services
Owner Kohlberg Kravis Roberts
Number of employees
24,000 (2012)
Slogan Beyond the transaction
Website www.firstdata.com

First Data Corporation is a global payment technology solutions company headquartered in Atlanta, Georgia, United States. It is a provider of electronic commerce and payment solutions. The company's portfolio includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions, credit reporting agency services; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions. The company's STAR interbank network offers PIN-secured debit acceptance at ATM and retail locations.

First Data has a global footprint of 6 million merchants, the largest in the payments industry. The company handles 45% of all U.S. credit and debit transactions.[1]

History[edit]

First Data Corporation was incorporated in 1971. First Data became the first processor of Visa and MasterCard bank-issued credit cards in 1976.[citation needed] In 1980, American Express Information Services Corporation (ISC) bought 80% of First Data. The remaining 20% was purchased in 5% increments each subsequent year until June 1983.

First Data Corporation spun off from American Express and went public in 1992. In 1995, the company merged with First Financial Management Corp. (FFMC) and was then organized into three major business units serving card issuers, merchants and consumers. Western Union became part of First Data as a result of the merger with FFMC.

By 1998, First Data was providing transaction processing services not only in the U.S., but also in markets around the world, including the United Kingdom, Australia, Mexico and Canada.[citation needed] The company also began to see growth in its network of Western Union agent locations.[citation needed]

Expansion[edit]

From 2001 through 2005, a period of expansion occurred as First Data acquired companies around the globe and in the U.S., including, in 2001, the acquisition of PaySys International and their VisionPLUS Payment Software System VisionPLUS followed by $6.6 billion merger with Concord EFS, Inc. in 2004, which added the STAR Network and PIN-based debit acceptance at more than 1.9 million ATM and retail locations. Additional acquisitions and strategic relationships included GovOne, eONEGlobal, Paymap, Inc., and Taxware. Nevertheless, First Data eventually divested, closed down or absorbed these businesses. First Data further expanded geographically in Europe, Asia and Latin America.[citation needed]

On January 26, 2006, First Data announced its intention to spin off Western Union into an independent publicly traded company through a tax-free spin-off of 100% of Western Union to First Data shareholders. The spin off occurred as planned on September 29, 2006.[2]

On April 2, 2007, it was announced that Kohlberg Kravis Roberts (KKR) had entered an agreement to acquire First Data[3] in one of the largest leveraged buy-outs in history,[4] and on October 1, 2007, KKR officially took over the First Data Corporation. Ric Duques retired, and Michael Capellas, previously the CEO of MCI Inc., the president of Hewlett-Packard Company, and also the chairman/CEO of the Compaq Computer Corporation was appointed CEO. As a privately owned company, First Data's stock was taken off the New York Stock Exchange on September 24, 2007. However, the company's LBO was financed with $24 billion in debt, and it remains heavily leveraged.[4] In June 2014, First Data raised a historic $3.5 billion private placement. $1.2 billion of the placement came from KKR; however the majority, $2.3 billion, was from hedge funds, mutual funds and institutions.[5] With this action the company reduced total debt by $3.3 billion, improving net leverage by 1.3 turns and significantly reducing annual cash interest payments.[6][7] The company continues to maintain investor relations pages on its web site and to publish quarterly financial results. Within two months of the KKR acquisition, the company laid off 1,700 employees across North America, Europe and Australia, about 6% of its workforce.[8]

First Data entered the Ireland market in a joint venture with Allied Irish Banks PLC named AIB Merchant Services on January 18, 2008.[9] First Data also acquired ICICI Bank's merchant services business in 2009 for 4 billion Indian rupees ($80 million USD).[10]

First Data and KKR vetted more than 60 startups before, in October 2013, announcing it had acquired POS startup Clover,[11] cardless mobile loyalty startup Perka.[12] and Gyft in 2014.[13]

Under Frank Bisignano[edit]

In April 2013, First Data’s Board of Directors announced that former JPMorgan Chase Co-COO Frank Bisignano had been named Chief Executive Officer of the company. In March 2014, Bisignano assumed the role of Chairman.[14] Upon taking office, Bisignano launched an equity ownership plan for all 24,000 of First Data owner-associates.[15]

Bisignano promoted notable additions to the company's staff, such as Himanshu Patel, Guy Chiarello, Cindy Armine-Klein, Andrew Gelb, Adam Rosman, Carmen Menendez-Puerto, Joseph Plumeri, Gretchen Garrigues, Christopher Augustin and Michael Manos.[16][17][18][19][20]

Since joining, Bisignano has tried to "to transform First Data into a provider of new technology for small- and medium-sized businesses".[5] In June 2014, First Data introduced the Insightics solution for small and medium size businesses. Insightics is a cloud-based software that enables small and medium size businesses to monitor key business metrics.[21][22] First Data created Insightics with Palantir.[5]

In August 2014, First Data expanded its presence in Brazil with Bin, the company's acquiring solution developed specifically for the local market.[23] In September 2014, First Data announced it would provide encryption technology for Apple Pay.[5]

In October 2014, First Data announced the Enhanced TransArmor Solution for small businesses. First Data's TransArmor Solution protects payment card data throughout the transaction process, incorporating several security and compliance products into one multi-layered solution.[24]

In February 2015, First Data reported its first profitable quarter in 29 quarters since its 2007 privatization.[25]

Management[edit]

Key executives include:

Headquarters[edit]

While the official First Data's headquarters are located in Atlanta, Georgia,[26][27] First Data’s principle executive offices are in New York City.

First Data's headquarters were located in Greenwood Village, Colorado.[28][29] In 2009 First Data announced that it was moving its headquarters from Greater Denver to 5565 Glenridge Connector, NE Atlanta, GA 30342.[30] Its original headquarters, where the company remained based until 1992, were in Omaha, Nebraska.

Philanthropy[edit]

First Data has made a significant commitment to the veteran and military spouse community. In October 2014, First Data launched First Data Salutes. First Data Salutes is the company-wide military engagement strategy aimed at helping the veteran-owned business community and service members and their families transitioning to civilian careers.[31]

In November 2014, Frank Bisignano, was awarded the 3rd annual Hiring Our Heroes Colonel Michael Endres Leadership Award for Individual Excellence in Veteran Employment. This award recognizes the dedication of Bisignano and First Data in addressing challenges faced by veterans and military spouses in their search for meaningful employment.[31]

In 2014, First Data was designated as a "Best Place to Work" and earned 100 percent on the Human Rights Foundation's Annual Scorecard on LGBT Workplace Equality.[32]

References[edit]

  1. ^ FLAMM, MATTHEW. "Apple Pay pays off for First Data". Crain's. Crain's. Retrieved 12 February 2015. 
  2. ^ Crane, Mary. "First Data Announces Western Union Spin-Off". Forbes. Forbes. Retrieved 12 February 2015. 
  3. ^ "K.K.R. Offer of $26 Billion is Accepted by First Data". The New York Times. 3 April 2007. 
  4. ^ a b "What went wrong with First Data?". Retrieved 2010-01-14. 
  5. ^ a b c d Carey, David. "KKR Banks on Bisignano Forging Apple Deal at First Data". Bloomberg. Bloomberg. Retrieved 12 February 2015. 
  6. ^ Epley, Cole. "Omaha is ‘the heart and soul’ of First Data, CEO says". Omaha.com. Omaha.com. Retrieved 12 February 2015. 
  7. ^ Bajpai, Prableen. "The Most Famous Leveraged Buyouts". Investopedia. Investopedia. Retrieved 12 February 2015. 
  8. ^ Stempel, Jonathan (November 15, 2007). "U.S. payment processor First Data cuts 1,700 jobs". Reuters. Retrieved 2010-01-14. 
  9. ^ "Allied Irish Bank And First Data Announce Launch Of AIB Merchant Services". Retrieved 2010-01-14. 
  10. ^ "ICICI Bank sells POS business to First Data for $80 million". The Times Of India. December 24, 2009. Retrieved 2011-06-26. 
  11. ^ "First Data Quietly Buys Payments Startup Clover; Launches Point Of Sale Platform For Merchants". TechCrunch. 
  12. ^ "First Data Acquires Cardless Customer Loyalty Startup Perka". allthingsd.com. 
  13. ^ "Payments enabler First Data enters gift card business with Gyft acquisition". VentureBeat. 
  14. ^ Stewart, John. "First Data Chief Bisignano Hails New Spirit of Innovation, Asks To Be ‘Graded’". Digital Transactions. Digital Transactions. Retrieved 12 February 2015. 
  15. ^ ROUMELIOTIS, GREG. "KKR doubles down on First Data, leading $3.5 billion investment". Reuters. Reuters. Retrieved 12 February 2015. 
  16. ^ Carey, David. "KKR’s First Data Hires Former Citigroup Banker Gelb, Rosman". Bloomberg. Bloomberg. Retrieved 12 February 2015. 
  17. ^ MILLER, RICH. "Mike Manos Moves From AOL to First Data". Data Center Knowledge. Data Center Knowledge. Retrieved 12 February 2015. 
  18. ^ Burger, Kathy. "Impact of Chiarello's Departure on JPMorgan Chase's IT Strategy Unclear". Banks Systems & Technology. InformationWeek. Retrieved 12 February 2015. 
  19. ^ "First Data Appoints Gretchen Garrigues as Chief Marketing Officer". Reuters. Retrieved 12 February 2015. 
  20. ^ "Christopher Augustin Joins First Data As Chief Information Officer". YahooFinance. Businesswire. Retrieved 12 February 2015. 
  21. ^ Primack, Dan. "Why KKR is doubling down on First Data". Fortune. Fortune. Retrieved 12 February 2015. 
  22. ^ Sender, Henny. "KKR seeks to make the numbers work at First Data". Financial Times. Financial Times. Retrieved 12 February 2015. 
  23. ^ "First Data Launches Bin, the New Electronic Payment Solution for Brazil". YahooFinance. Businesswire. Retrieved 12 February 2015. 
  24. ^ "Enhanced TransArmor® Solution for Small Businesses Means More Protection for Customers at the Swipe". YahooFinance. Businesswire. Retrieved 12 February 2015. 
  25. ^ SIDEL, ROBIN. "First Data Reports First Quarterly Profit in More Than Seven Years". The Wall Street Journal. The Wall Street Journal. Retrieved 17 February 2015. 
  26. ^ "City Council Districts" (PDF). City of Sandy Springs. Retrieved July 4, 2009. 
  27. ^ "Contact". 
  28. ^ "Contact Us". firstdata.com. Archived from the original on 19 June 2000. 
  29. ^ "City Boundary Map". City of Greenwood Village. Retrieved December 9, 2009. 
  30. ^ "First Data moving HQ to Atlanta". Denver Business Journal. 
  31. ^ a b "U.S. Chamber of Commerce Foundation Announces 4th Annual Hiring Our Heroes Award Winners". US Chamber of Commerce Foundation. Retrieved 12 February 2015. 
  32. ^ "CORPORATE EQUALITY INDEX 2O15". Human Rights Campaign Foundation. Human Rights Campaign Foundation. Retrieved 17 February 2015. 

External links[edit]