BankServ Beefs up for Processing Wars

Bank Technology News | September, 2010

For budget-constricted banks, less is more when it comes to managing vendor relationships, and BankServ believes it’s added substantial payments bulk and scale by entering into an agreement to purchase NetDeposit.

Analysts say the deal was necessary for BankServ to compete with larger tech shops that have the ability to offer a wide suite of products in an environment in which that’s attractive.

“BankServ and NetDeposit were two of the smaller players in the space, they were in some ways forced to join forces,” says Christine Barry, research director, Aite Group. “It’s a win for both firms, it’s tough to compete with the large core processors that are offering full suites to customers as banks look to limit vendor partners.”

Barry says Bankserv will now be able to expand its target market to include larger institutions as well as offer RDC products in multiple deployment environments capable of meeting all business sizes.

Terms of the deal, which is expected to close in the next month or so, were not disclosed, though BankServ plans to acquire all of NetDeposit’s assets from its parent institution Zions.

The combined company will serve 100,000 business locations and more than 500 financial institutions, making it the largest privately held bank-independent processor of RDC products. David Kvederis, president and CEO of BankServ, said that the consolidation brings the ability to compete more effectively with a broader solution set and expanded distribution channels.