Bank of America has outsourced its merchant processing to a new joint venture company established with First Data.
Under the agreement, Bank of America will contribute approximately 240,000 merchant relationships and First Data 140,000 clients to the new company. Following a transition period, First Data will provide the merchant processing and related services. The combined entity will process over one billion transactions per month.
Banc of America Merchant Services will be approximately 46.5% owned by Bank of America and 48.5% by First Data, with the remaining stake held by Rockmount Investments, an investment vehicle controlled by a third party investor.
Thomas Bell, chief strategy officer and president of First Data's financial services business, has been appointed chief executive officer of the new business, dubbed Banc of America Merchant Services.
"The combination of First Data's world-class technology and industry experience with the power of Bank of America's brand and branch referral channel will enhance Banc of America Merchant Services' position as an efficient and innovative player in the payments market," he says.
In a press briefing, Bell said the greatest potential area of growth for the business lay in moving payments to mobile devices. "Mobility is the obvious focus point," he says. "Those ecosystems are being formed up as we speak."