Friday , July 3, 2020

Fiserv Looks for Synergies in Its $690 Million Deal to Buy U.S. Bancorp’s Debit And ATM Assets

U.S. Bancorp is selling its ATM managed-services and debit-servicing businesses to Fiserv Inc. for a price that the parties say is “approximately” $690 million. The assets Fiserv is acquiring, which are part of U.S. Bancorp’s Elan Financial Services unit, also include the MoneyPass surcharge-free ATM network, which links 33,000 machines and is said to be nation’s second-largest such system. The Minneapolis-based bank is retaining Elan’s credit card issuing and corporate-payments businesses.

The deal is expected to close in the fourth quarter, U.S. Bancorp said.

“We believe this sale is the right thing to do for the bank and our customers,” Tim Welsh, vice chairman for consumer banking sales and support at U.S. Bank, said in a statement. “Our customers will benefit from the commitment that Fiserv has for this business, and U.S. Bank will benefit as we continue to reinvest in our core businesses.”

Grotta: “Client attrition will likely be minimal” for Fiserv.

The bank makes clear it is holding on to its Elavon merchant-processing business, which, along with corporate payments, “it sees as core to their bank business,” observes Sarah Grotta, a senior analyst at Mercator Advisory Group, a Maynard, Mass.-based consulting firm.

The deal offers Brookfield, Wis.-based Fiserv a range of cross-marketing opportunities, the firm says, adding in its announcement that it will offer Elan clients risk-management services and access to its Accel debit network. “This acquisition expands our capabilities and provides additional expertise, which together should enhance the value we provide our clients,” said Jeffery Yabuki, Fiserv’s president and chief executive, in a statement.

Grotta sees the ATM business Fiserv is picking up as a key facet of the deal. “Fiserv adds ATM-management clients with this deal, plus picks up the surcharge-free ATM businesses under the MoneyPass brand, which can be bundled and sold to existing Fiserv clients,” she says.

An added benefit for Fiserv, she adds, is that the clients it gains from the transaction will likely stay with the company. “This appears to be a synergistic acquisition for Fiserv,” she says. “The additional service options, plus the fact that it is simply difficult to move core debit processing, means that client attrition will likely be minimal.”

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