The fallout from this spring’s slate of multibillion-dollar payment company acquisitions began swiftly, as Bank of America on Monday announced plans to end its joint venture with First Data just hours after Fiserv’s acquisition of First Data closed.
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Bank of America and First Data will “pursue independent merchant services strategies” when the contract’s up in June 2020, though Bank of America and First Data have a deal to provide products and services to Banc of America Merchant Services clients through at least June 2023.
Bank of America branch sign is seen on Monday, Feb. 23, 2009 in New York, U.S. Photographer: Jin Lee/Bloomberg News
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Bank of America had been considering ending the joint venture, part of a trend toward banks rethinking their payments and merchant services strategies as open technology development and the broader digital payments take hold. The bank in 2017 cut its merchant services workforce and added more cloud-based payment technology to serve restaurants and subscription platforms.
BofA has also pushed the Zelle P2P app, which it runs with other banks, and is part of a broader move into insurance payouts and other payment types.
First Data also has merchant services relationships with Citi, Chase and other large banks which could be impacted by the merger. Fiserv’s $22 billion deal to acquire First Data combines the vendors' suites of bank and merchant technology.
The news comes at the same time as other large deals — such as FIS’ $43 billion agreement to buy Worldpay and the $21.5 billion Global Payments/TSYS merger. Given their scale and international reach, these acquisitions are sure to result in more reshuffling of relationships between banks and payment processors.
Julia Carreon is suing the bank, alleging she suffered race and sex discrimination, including sexual harassment by Andy Sieg, the bank's head of wealth management. On Tuesday, Citi hit back by filing a petition to compel arbitration and accusing Carreon of making false claims.
The bill, known as the STOP Act, was introduced by State Sen. Samra Brouk and Assemblymember Steven Raga, and proposes that any wage or cash advance be considered a loan and subject to the state's 16% civil usury law.
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