Bank of America ponders scrapping paytech venture with First Data
Farewell, First Data?
Bank of America is considering terminating the large-scale payment processing venture it has with First Data, according Wall Street Journal (WSJ). Instead, the bank intends to develop the merchant payment capabilities in-house and take control of this side of the business, WSJ says.
Bank of America and First Data set up the joint venture – Bank of America Merchant Services – ten years ago. Bank of America manages sales and customer service, whilst First Data handles the transaction processing. First Data has a majority ownership in this venture and its revenue accounts for 10-12% of the payments vendor’s overall revenue, according to Bernstein analysts.
Bank of America Merchant Services is the fourth-largest merchant acquirer in the US, according to the Nilson Report. “We securely process more than 16.6 billion transactions across 705,000 merchant locations,” it says on its website.
The current partnership with First Data expires in June 2020, according to WSJ.
First Data is in the process of being acquired by Fiserv – the $22 billion takeover deal was announced earlier this year.Bank of America manages sales and customer service.
