The rating on Columbus, Ga.-based Total System Services Inc. (TSYS) reflects the company's strong position in the fragmented market for payment processing and merchant-acquiring services. This market strength enables the company to generate a sizable stream of recurring revenues and good cash flow; the company had revenues approaching $2 billion in fiscal 2008. TSYS has a solid presence in the processing of consumer and commercial credit card transactions and should benefit from its expanding market share in debit, health care, prepaid cards, and loyalty programs. Barriers to entry are high, and key differentiators are the company's technology, process, and delivery capabilities. The company also should maintain its good position in merchant-acquiring services by increasing its distribution channels and focusing on
