Bank of America, First Data End Payments Partnership
July 29 2019 - 6:42PM
Dow Jones News
By Patrick Thomas
Bank of America Corp. is disbanding its payment-processing joint
venture with First Data, giving the bank more control of its
business that focuses on moving money for merchants.
The decadeslong partnership will end in June 2020, when the
venture was set to expire, the companies said Monday.
Payment processors like First Data, which was acquired by Fiserv
Inc. in a $22 billion deal, enable grocery stores, gas stations and
other merchants to accept debit- and credit-card payments and help
move money from a customer's account to the merchant's account.
Fiserv's purchase of First Data closed Monday.
The Wall Street Journal reported in May that the bank was
considering dissolving its partnership with First Data and
developing its own business. Bank of America is rushing to meet
demand from consumers and businesses for modern money-moving
technology, which promises a steady stream of fees.
"We look forward to investing in our merchant solution and
delivering the capabilities our clients need to thrive in an
ever-changing payments environment," Mark Monaco, head of
enterprise payments at Bank of America, said in a statement.
As a result of ending the venture, the bank expects to record an
impairment charge in the third quarter between $1.7 billion and
$2.1 billion on a pretax basis, according to a securities
filing.
Despite the end of the partnership, Bank of America and First
Data agreed for products and services to continue being provided
for Banc of America Merchant Services clients through at least June
2023, the companies said. "First Data will be an important service
provider supporting Bank of America's global payment solutions,"
the bank said in a statement."
The First Data partnership has been fraught with issues for
years, the Journal previously reported. Clients have experienced
delays getting money from customers, and outages have kept
merchants from accepting cards for short periods.
"We are excited for the next phase of our relationship with Bank
of America, and are committed to continuing to provide
market-leading products and services to the bank and its clients,"
Fiserv chief administrative officer Guy Chiarello said in a
statement.
Write to Patrick Thomas at Patrick.Thomas@wsj.com
(END) Dow Jones Newswires
July 29, 2019 18:27 ET (22:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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