Shazam sheds merchant services biz

Shazam, the EFT network and merchant services provider based in Iowa, is shedding its 25-year-old merchant services businesses in order to concentrate on its core business: running an EFT network. The buyer is NCMIC Finance Corp., also based in Iowa. NCMIC was founded in 1946 by a group of chiropractors and lays claim to being the largest provider of chiropractic malpractice insurance, in addition to managing a portfolio of financial and insurance products focused on medical businesses.

NCMIC's Professional Solutions Financial Services division has taken on Shazam's merchant services portfolio. Shazam's processing team members will move along with its clients to NCMIC, the two companies said.

A strategic collaboration

"This transition marks a strategic collaboration between two industry leaders with Iowa roots and values," the companies stated in a press release. The press release added that merchant clients will "benefit" from stronger fraud protection measures and a growing acceptance network among other things.

Shazam should also benefit as consumers transition more payments to debit from credit cards and cash. The Federal Reserve's 2024 Diary of Consumer Payment Choice revealed that in 2023, 30 percent of consumer payments each month were made using debit cards. The share of payments using cash was 16 percent, and credit cards accounted for 32 percent of payments.

In terms of sheer numbers, consumers averaged 46 payments monthly. Of those, an average of 14 were made with debit cards, compared to 15 with credit cards and seven with cash.

"This acquisition represents a win for both our organizations and, most importantly, for our clients," said Tony Dickinson, president, NCMIC Finance Corporation. He added that the move should help grow the portfolios of member banks and their sales professionals.

A history of firsts

Shazam was the first-ever shared ATM network, founded in 1976 by a group of Midwest community bankers as a member-owned financial services and payment processing company, and the industry's first single-message system. In 1981, Shazam became the first company to implement and operate a POS pilot program.

Five years later, it charted another first with the introduction of fuel pump terminals that accepted debit cards. In the late 1990s, in response to the national card associations (now card companies) increasing participation fees, Shazam formed ITS Bank to serve as a principal member of the associations on behalf of its member banks.

Shazam executives said the sale to NCMIC will benefit the company's community bank owners. "We remain fully dedicated to supporting financial institutions and their accountholders with innovative solutions and best-in-class service," said Paul Waltz, president and CEO at Shazam. "This strategic move allows us to focus on strengthening our core offerings while ensuring our merchant clients continue to receive the caliber of service they are accustomed to."

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