One of Canada’s largest payments providers, a joint venture between the Royal Bank of Canada (RBC) and Bank of Montreal, will soon be up for sale at a valuation of about £1.5 billion, Reuters reports.
According to Reuters’ sources, RBC and Bank of Montreal are in the “early stages” of placing Moneris up for sale and may still choose to retain some or all of the business. The valuation was reached by considering the firm’s annual revenue, about £516 million, and its large market share, which includes 325,000 merchant locations in Canada.
Moneris was founded in 2000 by RBC and Bank of Montreal – Canada’s biggest and third-biggest banks, respectively – and offers digital, mobile, and in-store payments systems for businesses. In March, Moneris announced a collaboration with British payments fintech Cardstream Group to expand its operations and support their payments facilitation services.
The sale forms part of a growing trend of banks spinning off their payments businesses, which often get bought by specialised payment companies, a growing industry. Earlier this year, Barclays sold most of its British payments business to Brookfield Asset Management, with plans to turn the business into “a standalone entity” over time. Italy’s Intesa Sanpaolo and Greece’s Piraeus Financial Holdings both sold their payments operations in multi-million pound deals in the past few years.
The payments industry is often said to be a “numbers game,” with larger businesses better able to make a profit and hold on to their customer base. Amid growing costs and an increasing need for digitalisation investments to remain competitive, banks are increasingly looking to partner with large payments providers or sell their payments businesses altogether.
