International Business Alliance case-writing Essay

International Business Alliance case-writing - Essay Example In 1996, TSYS and VISA U.S.A.'s Merchant Bank Services formed the for-profit Vital Processing Services LLC joint venture, combining both companies' merchant processing units, which together processed nearly three billion transactions in 1995. TSYS has also expanded into new areas to combat the increasing maturation of the U.S. credit card industry. In 1995, TSYS, which has long serviced banks in Canada, Mexico, and Puerto Rico, took its first steps to transform itself into an international company. TSYS formed the joint venture Total System Services de Mexico, S.A. de C.V. with Controladora PROSA, an 11-bank partnership representing 75 percent of Mexico's card-issuing banks. The joint venture added four million accounts, giving TSYS de Mexico 40 percent of that country's credit card accounts. TSYS has also expanded beyond traditional credit card markets by winning the processing business of United States Medical Finance Corp.'s USMed Card, a medical credit card. An alliance with Fair , Isaac and Company subsidiary DynaMark, Inc., formed in 1995, has enabled TSYS to extend its services to its clients with dynamic database marketing capabilities. TSYS generates revenues through the volume, rather than the amount, of transactions made on the credit cards it services. In 1995, TSYS revenues neared $250 million, producing a net income of $27.7 million. TSYS is led by Chairman and CEO Richard Ussery, Vice-chairman Kenneth Evans, and President Philip Tomlinson, all three long-time employees of parent company Synovus Financial Corp. That company, formerly known as Columbus Bank & Trust, owns 81 percent of TSYS's stock; TSYS management controls an additional ten percent of the company's shares, with the remainder trading on the New York Stock Exchange. In the 1950s, it was barely possible to speak of a credit card "industry." When tiny Columbus Bank & Trust (CB&T) issued a credit card to its local depositors in 1959, it was only the second bank in Georgia, and among the very first in the country, to do so. A credit processing operation was set up in the bank's basement; processing was done manually, as computers were still rare and software was even rarer. Through the first half of the 1960s, the bank's credit department grew from processing transactions from some 200 local merchants to 3,000. In 1966, CB&T built a separate operations building, and, after attempting to form a joint venture with W.C. Bradley Company to computerize processing, CB&T installed its own computer. Finding trained computer operators was difficult and expensive; instead, the bank trained some of its own personnel, establishing a computer department. By 1969 the company was writing its own software to handle processing of its credit card accounts. Joining the team developing the bank's software programs was Richard Ussery, then in his fourth year with the bank (he joined CB&T as a teller in 1965). As more banks instituted credit cards and struggled to process accounts, they were attracted to CB&T's processing system. Ussery told Georgia Trend of