Cleveland, Ohio-based KeyBank ($86 billion in assets) announced two new partnerships to provide credit card and merchant services that it says will provide its clients with an array of differentiated solutions that complement the bank's previous agreement with MasterCard to provide for ATM and debit solutions.
Key acquired its own branded credit card assets from Elan Financial Services to begin self-issuing cards. The bank will acquire a credit card portfolio of approximately 400,000 consumer and business accounts worth around $725 million in card assets, the bank said in a statement. These clients already hold $10 billion in deposits at KeyBank and another $5.8 billion in loans. The bank says that the deal - that was closed yesterday although its terms were not disclosed - will help it diversify its revenue streams.
Key also entered an exclusive agreement with Elavon Inc. to provide merchant services that will integrate the bank's merchant processing services into its overall payment solutions for businesses, the bank said.
The new agreements will help the bank gain new insight into its clients for more individualized service offers, according to Beth Mooney, CEO of KeyCorp (of which KeyBank is a subsidiary). "It's our relationship banking model in practice," Mooney said in the statement. "Owning the entire client relationship, including credit cards, allows us to see our clients' full financial picture and tailor products and services to meet their needs. Our clients will also benefit as we more fully integrate our card offerings into Key Relationship Rewards next year."
These moves complement a deal the bank made with MasterCard at the end of last year for ATM and debit card branding and processing to improve its solutions and processing capabilities in those areas. This agreement will be implemented in the first half of 2013, the bank said.