The fallout from this spring’s slate of multibillion-dollar payment company acquisitions began swiftly, as Bank of America on Monday announced plans to end its joint venture with First Data just hours after Fiserv’s acquisition of First Data closed.
Bank of America and First Data will “pursue independent merchant services strategies” when the contract’s up in June 2020, though Bank of America and First Data have a deal to provide products and services to Banc of America Merchant Services clients through at least June 2023.
Bank of America had been considering ending the joint venture, part of a trend toward banks rethinking their payments and merchant services strategies as open technology development and the broader digital payments take hold. The bank in 2017 cut its merchant services workforce and added more cloud-based payment technology to serve restaurants and subscription platforms.
BofA has also pushed the Zelle P2P app, which it runs with other banks, and is part of a broader move into insurance payouts and other payment types.
First Data also has merchant services relationships with Citi, Chase and other large banks which could be impacted by the merger. Fiserv’s $22 billion deal to acquire First Data combines the vendors' suites of bank and merchant technology.
The news comes at the same time as other large deals — such as FIS’ $43 billion agreement to buy Worldpay and the $21.5 billion Global Payments/TSYS merger. Given their scale and international reach, these acquisitions are sure to result in more reshuffling of relationships between banks and payment processors.
In its latest financial stability report, the Federal Reserve warned high equity valuations and low levels of liquidity could leave the financial system vulnerable to shocks.
The Columbus, Ohio-based regional launched Lift Local Business in October 2020 with a $25 million ceiling. Four years and $133 million later, the program is still going strong.
The bank and payment company are using the technology that underpins digital assets to improve interoperability for international transactions, a major point of friction in trade finance.
The Federal Reserve released additional information about its periodic review of its monetary policy strategy, tools and communications framework; TD Bank Group announced Michelle Myers will succeed Anita O'Dell as global chief auditor; Provident Financial Services will expand its commercial lending team; and more in this week's banking news roundup.
The Dallas bank is replacing longtime CEO Scott Kavanaugh, who stepped down Thursday, with veteran banking executive Thomas Shafer. Shafer previously led Chemical Bank, which was acquired by TCF Financial in 2019.
The Federal Reserve released the volume of activity on its instant payments network since its launch last summer, showing a surge in usage between July and August.