Wells Fargo has signed a definitive agreement to sell its Instant Cash Services unit, which provides debit card and ATM payment processing services to community banks, to US e-payments processor First Data. Financial terms of the transaction were not disclosed.
The Instant Cash Services business provides debit and ATM transaction processing services to more than 500 community banks, credit unions, thrifts and non-financial institutions across 20 states in the US.
The business was created in 1977 by Northwestern National Bank of Minneapolis, a predecessor of the former Norwest Corporation, to process payments for community banks and credit unions in the Upper Midwest.
First Data says the unit is a "natural fit" with its business.
"We serve thousands of similar financial institutions nationwide, and this acquisition supports our strategy of securing transaction processing volume and integrating high quality, value-added products and services," says Todd Strubbe, president of First Data Debit Services.
Wells Fargo will continue to participate in the Instant Cash Network and has agreed to recommend First Data's processing services to its global correspondent banking group customers.
The bank says the sell off will not affect its ATM network of 6700 machines in 23 states, nor will it affect the banks ranking as the second-largest debit card issuer in the US, with 18.7 million debit card accounts.