ARLINGTON, Va. – One of the biggest stories of the year in the ATM and EFT industry hinges on the opinion of a Federal court and may not be resolved until next year. In early April, First Data Corporation, a Denver based credit card transaction processor which owns Western Union and a majority interest in the NYCE ATM and EFT network, announced its intention to merge with Concord EFS, a firm based in Memphis, Tennessee which owns the STAR ATM Network. The resulting merger, which could place as much as 75% of all EFT transactions in the nation into the hands of one firm, could sharply restructure the current ATM and EFT markets in the U.S. as the remaining ATM networks, including the credit union owned Co-Op Network and Credit Union 24, were forced to deal with a significantly consolidated market for ATM and EFT processing and networking. But there are questions as to whether the proposed merger will go forward. Because it was controversial from the start, First Data and Concord faced additional calls for information from the anti-trust lawyers at the U.S. Justice Department, over and above the information they were already required to provide. Justice Department officials heard as well from other players in the ATM and EFT market, such as the Houston based PULSE ATM Association, which could have been expected to oppose the consolidation. Finally, in late October, the Justice Department filed suit in federal court to block the merger, arguing that it would lead to too great a consolidation in the ATM and EFT world and that consumers and retailers would be hurt by the loss of competing providers. First Data and Concord announced that they would fight the suit and the first court date in the trial will have taken place by the time this issue sees print. Anti-trust experts seem unsure about how the case might go. On the one hand very few merging firms, when the Department of Justice seeks to block their deal, actually fight the Department in court about it. This suggests that First Data and Concord expect they have a good chance of prevailing. On the other hand, even with Star's loss of some major financial institutions, it seems likely that a merger between the two would still place a significant portion of the nation's ATM and EFT industry into one company's hands and that may violate U.S. anti-trust laws. Lawyers for the Justice Department and the two merging companies are scheduled to meet in a Washington, D.C. courtroom on December 15. -

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