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Alliance Data (ADS) Inks Deal to Offer Credit Card Services

Zacks Equity Research

Alliance Data Systems Corporation’s ADS card services business has inked a long-term deal with Interval International to provide credit card and loyalty marketing services to the latter. The agreement with Alliance Data will help Interval International to fuel sales and drive customer loyalty.

Miami, FL-based Interval International is a well-known provider of vacation and membership services across the globe. Interval has a solid exchange network of quality resorts with more than 3,200 properties in more than 80 nations. Its membership programs provide comprehensive exchange services and other benefits.

The agreement will enable Interval International to take advantage of Alliance Data's innovative suite of digital capabilities to cater to client preferences.

Interval World Mastercard will help card members earn points for bookings through Alliance Data’s rewards program, driving customer loyalty as well as sales.

Alliance Data’s Card Service segment contributes significantly to the company’s total revenues. Continuous agreements with new and existing clients boost the private label card portfolio. Recently, Alliance Data’s card services business inked a deal with the U.S. Retail segment of Carter's, Inc. CRI, North America's largest branded marketer of apparel exclusively for babies and young children to provide credit card services.

Alliance Data continues to benefit from its organic growth strategies. The company should retain its revenue momentum in the coming quarters with ample opportunities from the current trends in consumer-based businesses. Alliance Data estimates 2019 revenues to grow 4% year over year to $5.8 billion.

Shares of this Zacks Rank #3 (Hold) private label credit card processing firm have lost 7.9% year to date against the industry’s rally of 36.5%. Nonetheless, we expect higher revenues, solid card services performance, strategic initiatives as well as a robust capital position to aid the company’s turnaround in the near term.


Stocks to Consider

Some better-ranked financial transaction service providers are Cardtronics plc CATM and FleetCor Technologies, Inc. FLT

Cardtronics provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. The company delivered positive surprise of 40.00% in the last reported quarter. The stock sports a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

FleetCor Technologies provides commercial payment solutions in North America, Latin America, Europe, and Australasia. The company delivered positive surprise of 1.91% in the last reported quarter. The stock carries a Zacks Rank #2 (Buy).

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