SINGAPORE--Standard Chartered Bank has agreed to form a joint venture with e-commerce payment solutions provider First Data to provide services to its merchant clients in Asia.
According to a joint statement Friday by Standard Chartered and First Data, the new company, Merchant Solutions, is expected to begin operations by the end of 2007, serving Standard Chartered clientele in Bangladesh, Brunei, Hong Kong, India, Macau, Singapore and Sri Lanka.
In a telephone interview with ZDNet Asia, Nigel Lee, president of First Data International Asia, said that with the formation of Merchant Solutions, First Data would work with Standard Chartered to ensure a uniform merchant acquiring and processing platform across the seven markets. This involves incorporating the bank's capabilities and expertise in local markets into First Data's OmniPay platform, which among others, has the ability to perform dual-currency conversions.
The ability to transfer all different solutions and components from various markets into one standard platform is "a huge advantage", as it will also make it easier and more efficient for the bank to enter new sales markets, Lee explained.
The deal, Lee noted, is distinct from First Data's tie-up with DBS Bank in July 2005, which related to outsourced services for credit and debit card issuing and processing.
Prior to Friday's agreement, Standard Chartered had no existing relationship with First Data, said Lee, adding that the two entities spent "over a year establishing the nature of the venture". First Data will hold a 56-percent stake in Merchant Solutions, while Standard Chartered Bank will own a 44-percent stake.
Under the conditions of the joint venture, First Data will serve Standard Chartered exclusively for a period of time. Lee declined to reveal the exact spell, but noted that it would be well within five years.
He explained that although the services provided by First Data through the platform is owned by the joint venture, First Data owns the platform and "the value for us is to build the infrastructure effectively across different markets with other potential entities".
In addition to the seven markets for which approval has been sought from regulators, Merchant Solutions is also speaking to regulators from China and Malaysia, said Lee. The new company, headquartered in Singapore, also intends to extend the partnership to the Middle East markets.