Bank of America’s payments service in collaboration with First Data had been launched for merchants who need to move money. Now, the bank wants greater control over that particular line of business.
Over the past half a decade or so, payments solutions have become one of the biggest businesses in the world of finance. Initially, innovative services were being provided by a range of inventive tech companies, but eventually, the big banks jumped in as well. After realizing the potential in the sector, many of the banks created their own departments to look after this business or collaborated with other companies to set up their payments business. American retail banking giant Bank of America got into the sector as well with its payments service aimed at merchants, who wish to move money quickly. However, in order to build the product, it had partnered with First Data.
It has now emerged that Bank of America has decided to end its partnership with First Data. The partnership is not going to be extended once it gets over in June next year. According to reports, Bank of America wants to have greater control over its product, and it is believed that the bank is going to manage its payments product on its own. The development could also be down to the fact that Finserv acquired First Data in a $22 billion deal on Monday. First Data had been one of the pioneers in the payments industry, having created products that allowed merchants everywhere to accept payment from either debit or credit cards with ease. Its partnership with Bank of America was definitely a significant deal, considering the sheer size of the bank’s customer base.
The payments industry is growing at a breakneck pace and the potential fees that a bank can earn from helping merchants moving money at a faster rate are considerable. Hence, it is not really a surprise that Bank of America had been contemplating getting more control over its payments business over the past few months. The head of enterprise payments at the bank, Mark Monaco, spoke about the bank’s plans about the future in a statement.
He said, “We look forward to investing in our merchant solution and delivering the capabilities our clients need to thrive in an ever-changing payments environment.”