Keycorp managed to reduce the losses from its Australian payments business over the year to June 2008, but could not return a profit during a period of upgrade in payments terminals and a rise in demand for services as banks and merchants modernise their equipment.In a discussion of the earnings of key divisions published with the financial statements yesterday, Keycorp said the operating loss for its Australian payments business narrowed to $2.5 million this year from a loss of $4 million last year. Revenue fell 44 per cent to $11.2 million. Fifty per cent of these revenues derived from managed payment services (for example, for helping to manage Westpac's Eftpos fleet); a third of the revenue came from the sale of hardware and the balance of revenues from other services.On the other hand, revenue from Keycorp's Australian "services" business, which is all derived in the payments niche, increased 21 per cent to $25.9 million. The company did not spell out any profit for this division. (And the reported earnings for the "payments solutions" business in the notes to the accounts are no guide, as they include discontinued businesses.)Having agreed this week to sell its controlling stake in Moasca and StepNexus (which in turn control the Multos operating system) Keycorp is now focussing its strategic direction on "managed payments and services".Keycorp will use the proceeds from the sale of its stakes in Moasco and StepNexus to pay back its entire $11.5 million owed to Westpac. Eighteen months ago Telstra, (which owns 47.5 per cent of Keycorp) was obliged to guarantee most of this debt in order to keep the company trading.The sale will generate $16 million in surplus cash for Keycorp. In the financial statements, the company said it was "considering all available options".Management may be hatching plans to buy complementary businesses but there must be pressure on the board to return capital to shareholders in some form.The sale of Keycorp's business in Canada, and the forthcoming sale in the UK mean that the group result for the year to June 2008 is almost academic, but for the record the loss for the year was $102,000, compared with a loss of $11.5 million in 2007.