Bank of America
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
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
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