Secure electronic transaction solutions provider Keycorp Limited (ASX: KYC) and Thales e-Transactions have signed a memorandum of understanding for cooperation in development, manufacture and sale of secure payment systems.

 Thales e-Transactions is a subsidiary of Thales Group, a European electronics and systems giant, with revenue of 10.6 billion Euros (approximately A$18 billion) in 2003.

Keycorp believes the relationship with Thales will enable it to expand the range of products it offers to customers as well as broaden the capabilities of both companies through the exchange of technology expertise.  The deal will also give Keycorp access to international markets, in an area in which the company has not had success to date.

The first milestone in the agreement is for Keycorp to distribute and install Thales Artema payment terminals for specific opportunities in its markets.

The second milestone will be the conclusion of a broader agreement covering close technical, sales and marketing cooperation for the development of future terminal products. This would involve Keycorp becoming the centre of excellence for software architecture, with Thales managing the development of hardware and system software.

Although the focus of the relationship is the payment terminals business, the two companies will also explore other areas of common interest.

Keycorp’s Chief Executive Officer, Bruce Thompson, said the relationship with Thales would have major benefits for Keycorp, its customers and shareholders.

“It is widely understood that the terminals business is highly competitive,” he said. “Although we have been very successful in our core markets of Australia, New Zealand and Canada, we have made limited headway elsewhere.

“Tackling this business alongside a much bigger player like Thales gives us tremendous advantages, not only in economies of scale with product development, manufacturing and international sales, but in access to a wider range of technology solutions for our customers.”