Fiserv Considers Divesting Debit Payments Business
Synopsis
The company is evaluating a sale of its STAR network, which processes debit, ATM and e-commerce transactions for more than 115 million cardholders.
Key Highlights
- Fiserv is considering a sale of STAR Network payments infrastructure business.
- JP Morgan, Bank of America, Wells Fargo and PNC Financial Services have held discussions.
- The move comes as Fiserv is undertaking a turnaround following changes in leadership and a plummeting stock price of more than 60%.
Fiserv debit card network sale banks has been in talks to sell its STAR Network debit payments business to a group of major US banks including JPMorgan Chase, Bank of America, Wells Fargo and PNC Financial Services.
The divestment comes as the payments technology company looks to improve performance from a rough year marked by executive turnover and plunging market cap.
Millions of Debit Transactions Processed on STAR Network
The STAR Network from Fiserv is the nation’s only open-access payments network connecting banks, merchants and consumers as it routes debit card, ATM and e-commerce transactions.
According to the company, its network support 150 million active debit card holders using cards issued by 2800 different financial institutions. It acts as one of the largest debit payment networks in the country.
Deal Could Face Regulatory Scrutiny
Big U.S. banks could use the ownership of the network to get around federal caps on debit card fees, The Wall Street Journal said.
However, several would-be buyers have apparently opted against going after the asset due to fears that the deal could spark backlash from lawmakers, regulators and merchant groups.
Fiserv (FISV), which is down 23% on the year, gained 4.4% in extended trading after news of the talks.
Source: Reuters
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