New First Data CEO Bisignano puts focus on growth

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Posted: Tuesday, April 30, 2013 12:00 am

First Data’s deficits and debt don’t deter its new chief executive officer.

“I like to lead and build, and this is an opportunity to build,” Frank Bisignano said Monday from First Data’s Atlanta headquarters during his first official day in the role. “I think the job at hand is to continue to grow our business.”

Bisignano, 53, left his position as co-chief operating officer at JPMorgan Chase, the nation’s largest bank, to lead First Data, the world’s largest processer of credit and debit card payments.

He “can’t wait” to come to Omaha to meet some of his 5,000 employees here, more than a fifth of First Data’s workforce. He plans a trip within a few weeks.

It’s a group slightly smaller this week than last — 60 Omaha people were laid off Wednesday in a move the company said was to streamline operations and become more “innovative and customer-focused.”

Bisignano suggested he will look more for top-line growth than at cuts, and he will rely on employees, especially the sales force interacting directly with customers, to create that growth.

“That’s a really important thing, to engage the salespeople with the customers to think about innovating,” he said. “We’re going to make investments in technology and drive innovation.”

Bisignano pointed to his experience, before joining JPMorgan Chase, of expanding Citigroup’s Global Transactions Services business from 2002 to 2005. Under his leadership, revenue grew 50 percent to $6 billion, First Data said.

“If you look at my track record, I’ve built businesses, I’ve grown revenue, I’ve improved customer satisfaction, I’ve grown world-class technology, and I’ve done it by investing in our people.”

Bisignano said payments processing is a strong business with a “long runway,” and he said First Data is“well-positioned to take advantage of that.”

The company was founded in 1971 in Omaha as First Data Resources to provide processing services to the Mid-America Bankcard Association. In 1976, it became the first processor of Visa and MasterCard credit cards.

First Data’s revenue has grown to $10.7 billion from $8.8 billion in the last five years.

Payments industry consultant Eric Grover of Intrepid Ventures agreed with the CEO’s assessment that growth will continue, even “if they fall asleep,” but he said the company is overleveraged with its $23.9 billion in long-term debt.

First Data spent $1.9 billion on interest in 2012 and ended the year with a loss of $701 million.

Grover said management will be looking at how to generate new fees and revenue from both banks and retailers. He said the fastest growth is to be found overseas.

“If they want to generate healthy double-digit growth, they’re not going to do that in the United States,” Grover said.

He said the company hasn’t been as aggressive overseas as it needs to be or as it was before 2007 when it was taken private. “Overseas there are a lot of really high-growth, emerging markets where they should be leaning into the opportunity.”

David Robertson, publisher of the Nilson Report payments industry newsletter, said that’s because First Data is limited by its debt, which he called, “not quite an albatross, but a handicap.”

International revenue shrank in 2012 though earnings grew. Bisignano said First Data is in 35 countries and international growth remains an opportunity.

Bisignano didn’t comment on any plans to take the company public. Predecessor Jon Judge had said the company was on a path to an IPO.

“That’s not something I’m thinking about right now,” Bisignano said. “What I’m thinking about is building on this great customer franchise and innovating.”

That will be a challenge, Robertson said.

“It’s a very big company, and to keep growing as a very large company is a tall order,” Robertson said.

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