Fis (NYSE: FIS), one of the world's largest providers of banking and payments technology, today announced the execution of a binding memorandum of understanding ("MOU") with Banco Bradesco for its card processing joint venture, Fidelity Processadora e Servicos S.A. ("FPS"), the leading third-party card processor in Brazil.
According to the MOU and under the ten-year services agreement, FPS will provide comprehensive, fully outsourced card processing, call center, collection and back office services for Banco Bradesco's private label and bankcard portfolios. FPS and Bradesco are working to complete the conversion of Bradesco's 14 million bankcards during the fourth quarter of 2010, bringing the total number of cards processed on behalf of all FPS clients to more than 40 million.
Furthermore, separate definitive agreements have been executed resulting in FIS maintaining its 51% share in the joint venture and Banco Bradesco's ownership increasing to 49%. The agreements also serve to finalize Banco Santander's exit from the joint venture.
Brazil is the growth leader among emerging markets, with annual estimated GDP growth of five percent over the next five years. Credit cards outstanding more than doubled between 2004 and 2009, while cards on file processed by FPS more than tripled within the same period, and consumer adoption is expected to continue. FPS has achieved compound annual growth of approximately 37% for cards on file from 2005 to 2010.
"Brazil is a key strategic market for FIS," stated Frank Martire, president and chief executive officer of FIS. "FIS has had a long-established card presence in Brazil and this expanded relationship with Banco Bradesco provides us with a significant opportunity to cultivate more business in a region poised for continued growth." Gary Norcross, chief operating officer of FIS, added, "FIS has been serving clients in Brazil for more than a decade. While card issuance and usage has grown substantially during this time, the market remains underpenetrated, providing FIS with a chance to further advance our position in the Brazilian card industry. We are committed to providing best-in-class card processing solutions to our clients in Brazil, as well as other regions around the world."
"Working together with FIS in this joint venture, we anticipate a significant improvement in the time to market and product availability, which will enable us to become more competitive," said Arnaldo Vieira, executive vice-president of Banco Bradesco.