Tempe, Arizona-based Salucro provides online billing and payments services to
The acquisition, which closed on Wednesday, makes Elavon more competitive in the payments marketplace, said Eric Grover, principal at Intrepid Ventures.
"In payment processing, sector-specific payment solutions add more value, are stickier and are less prone to fee erosion," Grover said. "Health care payments remain a huge opportunity for the payments industry, [but] it's more difficult to navigate than, say,
The acquisition also has negative implications for
"Two-thirds of [community and regional banks'] profits come from serving businesses in their community, and the most lucrative of those business communities is health care," Crone said.
"Fifty years ago, cash management services extended to those health care providers and other businesses were extended by a community or regional bank," he said. "With the advent of electronic bill presentment and payment and online account management, those cash management services have been nationalized, meaning a national player such as U.S. Bank can essentially extend those cash management services to any business across the country."
Joe Rauch, global head of communications for merchant payment services for the banking subsidiary of Minneapolis-based U.S. Bancorp, declined to comment on how much transaction volume flows through Salucro's payments platform, but noted, "Health care continues to be a key segment for our banking and payments offerings, and this acquisition adds to an already robust offering. We've supported the industry for over 100 years."
U.S. health care spending reached $4.5 trillion, or $13,493 per person, in 2022, according to the Centers for Medicare and Medicaid Services in the Department of Health and Human Services.
Crone Consulting estimates that health care-related payments in the U.S between patients and providers, such as co-pays, insurance premiums and other out-of-pocket expenses, exceed $700 billion annually in total purchase value.
"To access this market, you have to have highly specialized functionality, thus U.S. Bank's acquisition of Salucro," Crone said. "Payment always follows something. For a health care payment it follows an invoice or bill, and Salucro provides the electronic bill presentment and payment platform for those bills with online account management."
The acquisition also bolsters U.S. Bank's card-based payment offerings and provides new avenues for account acquisition and cross-selling through health savings accounts, Crone said.
"All of the banks are looking for ways to increase card-based payments," Crone said. "With the advent of health savings accounts, every one of these HSAs are issued with a debit card, so they provide the extended set of benefits and new features and services for HSAs on both ends of the transaction — not only for the health care provider, but also for the consumer."
U.S. Bank has put an increased focus on both its health care business and strategic alliances over the last few years. In 2023, the bank began a new cross-business health care initiative to serve a growing and "new-to-us" segment of health care practices that have up to $25 million in annual revenue, according to the bank's 2023 annual report.
The Salucro acquisition was announced one day after U.S. Bank said it is expanding its partnership with broker-dealer and financial advisor Edward Jones. Edward Jones advisors will be able to offer U.S. Bank co-branded deposit and credit card products to its clients with enhanced rewards, according to a U.S. Bank release. The two companies have had a card-issuing relationship since 2012.
Edward Jones has more than 19,000 financial advisors serving over eight million clients with $2 trillion in assets under management in the U.S., according to the company.
