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Bloomberg
Bank of America Corp. (BofA) said it will end a payments joint venture with First Data Corp. next June when a contract between the two firms expires.
The firms will continue to provide delivery of products and services for existing clients through at least June 2023, but will otherwise pursue in-dependent merchant-services strategies next year, Bank of America said in a statement. The bank said in a filing it expects to take a charge of about $1.7 billion to $2.1 billion in the third quarter related to the planned exit, which won’t affect its capital plan.
The separation could free up Bank of America to directly offer retailers the services that come with handling electronic payments, at a time when ventures from Silicon Valley and China are looking to muscle into an industry that collects $108 billion a year from merchants.
The battle over payments is prompting longstanding players such as First Data to consolidate, and banks to ponder their own roles.
Already, JPMorgan has proven it’s possible to set out on its own.
“Payments are at the core of our business, and this announcement is another step forward in our global strategy to provide companies of all sizes an integrated payment offering,†Mark Monaco, head of enterprise payments at Bank of America, said in the statement.