RBC and BMO Explore Sale of Payment Processor Moneris

What's Happening?

Royal Bank of Canada (RBC) and Bank of Montreal (BMO) are reportedly considering the sale of their jointly owned payment processing unit, Moneris. The discussions are in the early stages, with the banks assessing interest from potential buyers. Moneris, one of Canada's largest payment processors, serves approximately 325,000 merchant locations across the country. The potential sale could value the business at up to $2 billion. This move comes amidst a trend of banks divesting their payments operations due to the rapid digitization of the North American payments industry.

Why It's Important?

The potential sale of Moneris reflects broader shifts in the financial industry, where banks are increasingly divesting from payment processing operations to focus on core banking activities. As digital payments continue to grow, maintaining competitive payment processing capabilities requires significant capital investment. The sale could attract interest from payments companies and private equity firms, drawn by the recurring fee revenues these businesses generate. This development may impact the competitive landscape of the payments industry, influencing how banks and financial institutions approach digital payment solutions.

What's Next?

If RBC and BMO proceed with the sale, it could lead to changes in the ownership and management of Moneris, potentially affecting its operations and strategic direction. The banks may choose to either proceed with the sale or maintain their ownership of Moneris in full or in part, depending on the level of interest from prospective buyers. The outcome of these discussions could influence future trends in the payments industry, as other banks may consider similar divestments to adapt to the evolving digital landscape.