Nearly four months after the sudden resignation of its Merchant Services top executive, credit-card processor TSYS said Friday it has found a successor to run the business unit it now calls Merchant Solutions.
Effective May 1, Barclaycard executive Philip McHugh will take the helm of the merchant specialty segment operated by Columbus-based TSYS. His title will be senior executive vice president and president of Merchant Solutions. He will report to Pam Joseph, president and chief operating officer at the card and payment processor that does business worldwide.
“We are thrilled to have a visionary such as Philip join our executive leadership team at TSYS,” Joseph said in a statement. “His global experience, his work across the full spectrum of payments, and especially his extensive knowledge of the acquiring industry, will be tremendous assets as we continue the growth of our merchant business.”
McHugh has more than two decades of international banking and payments experience, TSYS said. He has been with Barclaycard roughly half that time, serving previously as chief financial officer and currently as president of Barclaycard Business Solutions.
Barclaycard is a subsidiary of London-based banking and financial services firm Barclays. Before joining that company, McHugh worked 10 years with Citigroup’s credit-card division in Latin America. He has a bachelor of arts degree from Emory University in Atlanta and a master’s degree in business administration from the University of South Carolina.
“Anyone who has worked in payments knows TSYS as a true leader in the space with a reputation of always focusing on their customers,” McHugh said in a statement. “They have great people, a great culture and exciting plans to grow.”
McHugh will take the job vacated in early October by John Shlonsky, who had been with TSYS since the company’s $2.35 billion purchase of Hauppauge, N.Y.-based TransFirst, a company specializing in acquiring and setting up merchants to handle customers’ card transactions. The largest acquisition in TSYS history was announced a year ago and completed last April.
Shlonsky’s departure came with TSYS moving through a restructuring to integrate both the incoming TransFirst business with the existing TSYS Acquiring Solutions subsidiary based in Tempe, Ariz. That process included layoffs and retirements of an unreleased number of employees. The company has said the “synergy” and “efficiency” savings in that initial round have topped $5 million.
“On some of our operations, we adapted some of those integrations a little bit faster than we thought,” TSYS Chairman and Chief Executive Officer Troy Woods said on a conference call Tuesday after his company’s release of its fourth-quarter and 2016 earnings report. “Also, from a people standpoint, we've consolidated some of those operations faster. We still have a few more to go in the next couple of months. But probably more than anything it's been around getting to those synergies faster than originally anticipated.”
There is more to come as TSYS Merchant Solutions continues to scrutinize the various operations of TransFirst and the Arizona-based merchant processing operation to find where there may be overlap in facilities, potential clients and staffing. TSYS Chief Financial Officer Paul Todd reiterated on the conference call Tuesday that the card processor wants to find synergy savings of $15 million in 2017 and $25 million the following year.
“As well as at the management level, we have had duplication across all of our senior managers and group managers in the business, and we have targeted some reduction as part of our synergies,” Joseph said on the conference call. “But most of what you have seen has been because we have chosen those folks to take a severance and leave the organization. So I feel good about the business, and I feel very good about the senior management and the talent that we have retained and that we have on board.”
TSYS has said TransFirst financially will double the merchant business it did prior to the acquisition. Todd on Tuesday said the new merchant pipeline that comes with TransFirst should contribute roughly $125 million each quarter to the company’s revenue stream.
Woods also noted Tuesday that its newly combined North America and International issuer segments — now called Issuer Solutions — also are under the microscope for cost-saving measures.
“Over the past 12 to 15 months, we have brought together our technology, conversions and product teams of these two segments as we solve synergies and efficiencies,” he said on the call. “We continue to believe that there are additional advantages that we can leverage by combining the remainder of the two segments, while continuing to manage our client relationships at the local level.”