October 9, 2000
|
First Data,
iFormation Join Forces With Electronic-Payment Venture By
DANIEL MACHALABA
Staff
Reporter of THE WALL
STREET JOURNAL
ATLANTA -- First
Data
Corp. and iFormation Group are teaming up to build an
electronic-payment processor for Internet transactions in a field already
crowded with ventures further ahead in development. The new venture, eONE
Global LP, was announced Monday. First Data and iFormation are committing
nearly $600 million in cash and assets to the venture, which proposes to
develop and operate payment processing for the business-to-business,
business-to-consumer, business-to-government and person-to-person Internet
marketplaces. First Data is contributing certain operating businesses and
interests in Internet payment-related ventures at a total value of $360
million for a 75% equity interest in the new company. IFormation Group,
New York, a partnership of Boston Consulting Group, General Atlantic
Partners LLC and Goldman
Sachs Group to develop new
online businesses, is contributing $135 million in cash for a 25% equity
interest. In addition, iFormation and First Data have committed another
$100 million in cash in proportion to their ownership levels in eONE
Global. The new venture, though, lags behind such developments as a
venture by CheckFree
Corp. and Bank
of America Corp., as well as
another payment processor backed by three banks: First
Union Corp., Wells
Fargo & Co. and Chase
Manhattan Corp. But First Data is
counting on its wide distribution network, with more than two million
merchants and 1,400 financial institutions, to give it an edge. First Data
is the largest credit-card processor in the U.S. and also owns Western
Union, a money wire-transfer company. "We think we're the best one to
handle electronic payments in the Internet world, because we're the
largest processor of electronic payments in the physical world," said
Ric Duques, First Data's chairman and chief executive officer. Mr. Duques,
57 years old, will become chairman of eONE Global in addition to
continuing his positions at First Data. Garen K. Staglin, 55, who has been
involved in developing businesses and the management and growth of
information-technology companies since 1971 and has been a First Data
director since 1992, will be president and CEO of eONE Global. Mr. Staglin
said eONE Global will be the only major player with comprehensive
offerings of products and services across all four segments of the
Internet-payments industry. |
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