Jack
Jack McDonnell Jr., telecom entrepreneur, dies at 82
By Washington Post Staff
March 15, 2020 at 11:38 a.m. EDT
John "Jack" McDonnell. (Courtesy of TNS)
John “Jack” McDonnell Jr., a Washington-area telecom entrepreneur who founded Transaction Network Services, which developed technology to handle the transmission of credit card and other sensitive financial transactions at the start of the Internet age, died March 1 at a hospital in Fort Myers, Fla. He was 82.
The cause was a heart attack, said his son-in-law Matthew Mudd.
Mr. McDonnell started Reston, Va.-based Transaction Network Services, also known as TNS, in 1990 and served as chief executive as it grew to include banks, Wall Street firms and telephone companies as clients.
Five years after taking the company public, he sold TNS in 1999 to the Internet service provider PSINet for $720 million in cash and stock, creating one of the most lucrative mergers between two Washington-area technology companies. Forbes magazine valued his family’s 11 percent stake at $77 million.
Ashburn, Va.-based PSINet collapsed in 2001 amid the dot-com bubble. Mr. McDonnell — who meanwhile tripled a $3 million investment in a small software company called Paylinx — bought TNS back with private-equity support.
In early 2006, he made a bid to take TNS private, but his offer was rejected, and he was reportedly ousted by the board after the firm suffered a major decline in net income. He subsequently became chief executive of ExaDigm Inc., a payment-terminal development company based in Santa Ana, Calif., and Phoenix Managed Networks, which handles credit-card payment transactions for large banks.
John James McDonnell Jr., the son of Irish immigrants, was born in Mineola, N.Y., on Oct. 31, 1937, and grew up in Queens. He studied electrical engineering, receiving a bachelor’s degree in 1959 from Manhattan College and a master’s degree in 1961 from Rensselaer Polytechnic Institute in Troy, N.Y.
After two years of Air Force service — during which he trained as a pilot and designed satellite systems for the National Security Agency — he started a company selling technology peripherals and ran an executive airline service.
In 1976, he was named director of technology and telecommunications for the National Commission on Electronic Fund Transfers, a now-defunct federal body to keep Congress up to speed on developments in the industry.
He then spent seven years as a vice president of BT Tymnet, a public data network that he reportedly helped lead into financial services, and later became head of communications for the Electronic Industries Association, making him a leading lobbyist for the telecom-hardware industry.
Citicorp tapped him in 1987 to oversee its Digital Radio Network project that used a form of radio transmission for credit card verification. He told American Banker that it was successful on a technology level but “a marketing disaster. The banks just weren’t ready to embrace radio.”
Not long after, he started TNS, capitalizing on newer, high-speed technologies used by phone companies.
He was a founder of the Electronic Funds Transfer Association and won industry awards. He served on the board of the Shakespeare Theatre and Marymount University in Arlington, Va. The American Ireland Fund honored him for helping support the development of religiously integrated schools in Northern Ireland. He also was a prolific corporate investor and adviser.
He had homes in McLean, Va., and Fort Myers, and his memberships included Burning Tree Club in Bethesda, Md.
Survivors include his wife of 58 years, Marian “Jackie” Hayes McDonnell, who resides in a retirement home in Bethesda; four children, Sheila Bates and Kerry Mudd, both of McLean, John McDonnell III of Mill Valley, Calif., and Kevin McDonnell of Washington; a brother; a sister; 14 grandchildren; and two great-grandchildren.
November 8, 2002
Founder, Chairman, and CEO of Transaction Network Services Named Entrepreneur of the Year by Rensselaer
Troy, N.Y. — John J. McDonnell Jr. ’61, founder, chairman, and CEO of Transaction Network Services (TNS) in Reston, Va., was named the 2002 William F. Glaser ’53 Rensselaer Entrepreneur of the Year by Rensselaer Polytechnic Institute. McDonnell’s company is one of the world’s leading providers of fast, reliable data communications services for transaction-oriented applications.
McDonnell was honored by the Paul J. ’69 and Kathleen M. Severino Center for Technological Entrepreneurship at Rensselaer’s Lally School of Management and Technology at a breakfast meeting this morning in the Heffner Alumni House. He delivered a keynote address to Rensselaer students, faculty, staff, and the community during the event.
“Jack McDonnell is a superb exemplar of the entrepreneurial spirit,” said Rensselaer President Shirley Ann Jackson. “We note with pride that his achievements model well that hallmark of a Rensselaer education: the application of science to the common purposes of life.”
McDonnell founded TNS in 1990, and quickly developed the company’s main service of providing high-speed, secure electronic fund transfer for credit card transactions. Today, TNS’ secure and efficient proprietary network connects the credit card-swiping machines of 300,000 merchants to the corporations that verify credit accounts. It commands 70 percent of the U.S. market in its sector, and continues to grow its presence overseas. In addition to facilitating credit and debit card transactions, it transports transactions for health care and authorization services, telephone calling card authorizations, inventory control, and automated financial exchange.
After spending the decade building TNS and its network, McDonnell sold it to Internet service provider PSINet in 1999, and purchased it back again in 2001. His success with TNS and in the industry has been the subject of numerous articles in various media outlets, among them the Washington Post, Forbes.com, and Washington Business Forward magazine.
Immediately prior to launching TNS, McDonnell was president and CEO of Digital Radio Network Inc., an access bypass carrier for point-of-sale transactions. He also served as group vice president for the Information Technologies and Telecommunications Group of the Electronic Industries Association, and helped found the Electronic Transfer Association, on whose board he currently serves. He was the recipient of KPMG Peat Marwick LLP’s High Tech Entrepreneur Award and sits on the boards CyberSource, Ecutel, and InteliData.
McDonnell graduated from Manhattan College with a bachelor’s of science degree in electrical engineering, and earned his master’s degree in electrical engineering from Rensselaer in 1961. For his master’s project at Rensselaer, he built a mechanical computer that solved Boolean equations.
Established in 1990 by 1953 Rensselaer graduate William F. Glaser, the Entrepreneur of the Year Award recognizes successful entrepreneurs and role models. The program also brings the world of entrepreneurship into Rensselaer classrooms so honorees can share wisdom, experience, and encouragement with students. Past winners include Paul Severino ’69, founder and chairman of Bay Networks; William Mow ’59, founder of Bugle Boy Industries; and Nancy Mueller, founder of Nancy’s Specialty Foods.
