Bank of America has outsourced its merchant processing to a new joint venture company established with First Data which will mean BOA will switch its 240,000 merchant relationships to First Data.
This is especially critical for the payment processor TSYS who have stated that they stand to lose four per cent of their annual revenue based on this decision by Bank of America and its new partnership with First Data.
As per the agreement, Bank of America will transfer 240,000 of its merchant relationships to the new company and First Data will provide 140,000 clients to the new company. First Data will then provide the merchant processing and related services processing a combined 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, a third party investment vehicle..
The First Data team mentioned to the press that the greatest potential area of growth for the business lay in moving payments to mobile devices.
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