From The Sheet. http://www.thesheet.com/ "Multos transactions key to Keycorp profits 04 April 2008 6:45am Keycorp is clarifying its strategy, selling its main Canadian operation just 18 months after buying the Montreal-based Optimal Services Group.
Optimal was incorporated into the small terminals business that Keycorp maintained in Canada as the company looked to move into managed services.
That strategy was a failure according to Keycorp’s chief executive Ken Carr, who joined the company last year.
“We went into Canada with high hopes for going into managed services; that didn’t work out for us but we did make it into a profitable business we could reasonably exit from ahead of time.”
“It was generating cash, the approach from Moneris was friendly and if they didn’t come to us we probably would have kept it, but from a strategy point of view it didn’t fit with where we want to be.”
Yesterday Keycorp announced it was buying StepNexus and MAOSCO Limited in Britain, which gives the company 40 per cent ownership of the secretariat of the international Multos consortium. The joint venture with Hitachi and Mondex will operate the UK-based Key Management Authority, delivering control over the enabling of smart cards and an ongoing transaction-based cash flow.
“StepNexus is the global Key Management Authority for Multos for the entire world,” said Carr.
“All smart cards that use Multos get switched on by that authority for an average of about ten cents plus ongoing transaction fees.
“This is a very strategic acquisition, the fact that it is profitable business is even better,” said Ken Carr.
“A lot of the government ID card projects that we are bidding for around the world require you to provide a key management authority on an outsourced basis to the government, so this by default gives us extra capabilities to do the bigger deals.”
While Australian banks are still lagging the world on EMV according to Carr, the company is positioning itself for big government contracts, including any new Medicare Card. Keycorp announced in its half year report it had spent almost half a million dollars on Access Card work, all of which has now been written off.
“We think EMV is finally getting some traction in Australia, albeit late.
“The way it has turned out is that, in the absence of high levels of fraud, EMV has come here as equipment is replaced, but banks are now putting chips on cards and we are very pleased to have gained our first big bank client last year.”
Keycorp partners with most major card manufacturers in Australia, including Gemalco, Leigh Marden and Gisecke & Devrient. Article By: Jason Bryce"
KYC Price at posting:
0.0¢ Sentiment: None Disclosure: Held
