By Jaffar Agha-Jaffar

It was August 18, 1991, not even two years after the end of the Cold War. Sharon Gissane, a young Irish analyst, left London for Moscow to undertake her first installation of Card Tech’s back-office systems at a leading bank, which at the time was Visa’s flagship member and was planning to issue the first credit card in Russia. We mistakenly thought that this was a routine installation. However, on the very next day, the political world was turned upside down.

On August 19, the Soviet Union’s government briefly deposed Soviet President Mikhail Gorbachev and attempted to take control of the country. There was complete mayhem on the streets of Moscow, and the army was out in force. Boris Yeltsin was standing on a tank making speeches to defy the coup and encourage others to resist the Communists.

My colleagues and I were immediately on the phone with Moscow, with Sharon’s parents on the other line waiting for news on their daughter. After several attempts, we got through to the bank only to find out that Sharon had already gone out to lunch with the bank’s card program manager. When we finally contacted her, all concerned decided to wait one more day to see what the outcome would be. On the following day, with the situation still unclear, we requested that the bank allow Sharon to return to London.

As she left Moscow, the Communist revolt collapsed just three days after it began. Some would argue that event was the funeral of the Soviet empire. However, that experience (or perhaps the luncheon) did not dampen Sharon’s enthusiasm. She happily returned to Moscow the following month to complete the installation. Sharon witnessed firsthand the issuance of the first Russian credit card in October 1991. At a time in the country’s history when there were more questions than answers, the flexibility of Card Tech’s system provided a solution.

In this 25th year of TSYS history, I am sure that there are many who were there in the beginning and treasure certain experiences and take pride in recalling them. I have had the same privilege in my experience at Card Tech.

Card Tech’s journey into Russia is nearly as old as TSYS itself, starting wisely in a collaborative business partnership. This joint venture eventually solidified into a company whose goal was to initially penetrate the Soviet Union’s acquiring market. We started by processing for the only acquirer in the Soviet Union and soon afterwards took a 25 percent stake in that acquiring business and achieved significant milestones. Our team was the first to provide point­of-sale terminals in Russia, with the messaging being transmitted to our processing center in London. We also processed the first ATM transaction in Russia, which was undertaken in an ornate, turn-of-the-20th­-century hall where Lenin gave a landmark speech.

Before exiting the acquirer processing business, we had developed our issuer licensing and distributed processing activities, which comprised a completely new paradigm in processing that we successfully evolved in the emerging market. At that time, telecommunications were very bad in Russia, a country that had just broken free from its Communist heritage. Visa and MasterCard could not get telecommunication lines access into Russia, which was very frustrating for both the associations along with the hundreds of newly-formed banks wanting to join the payment associations. Card Tech seized the opportunity. Twenty years ago the card landscape in Russia was primitive, but it is now very sophisticated indeed — smart cards, contactless payments, and mobile commerce, just to name a few, are new payment technologies that are currently operating in the Russian market.

TSYS recently acquired the last remaining piece of Card Tech’s business, completing the acquisition it made in 2006. By opening our office in Moscow, the Russian Card Tech team will be fully-fledged members of the TSYS family. However, many of them have been engaged in TSYS’ work all along. Since Card Tech’s core business was acquired in July 2006, the Russian team has been working on numerous TSYS projects as dedicated sub­contractors. Equally important has been the contribution of the Russian team to the development of its processing platform, PRIME, as Moscow is one of the company’s largest centers of technological excellence. The technical skills that are prevalent in Russia have been honed over many years.

I am confident that TSYS will find its rewards in Russia. Card Tech has found its experience in Russia very worthwhile thus far; as the Russian market was one of the early pillars of our business success and has become a rich source of loyal and highly experienced, talented staff. Our former acquiring partner has become the leading acquirer in the area with an estimated value of several hundred million dollars. The initial bank’s card program manager, whose name appears on the card, has become the business development director of an international leading processor.

And finally Sharon, the young heroine of our story, is living happily in Ireland with her family.

About the Author

Jaffar Agha-Jaffar is managing director of TSYS Card Tech and has more than 25 years of experience in the international payments arena. During this period he has managed an array of activities from card-issuing, merchant-acquiring and traveler-check programs, through third-party processing center activities, to managing Card Tech Limited, a payment system solution provider.