RBC and BMO weigh sale of Moneris as banks retreat from merchant acquiring

Royal Bank of Canada and Bank of Montreal are reportedly in talks to sell Moneris, their jointly owned payments processing business, to Francisco Partners, in a transaction that could value the company at more than $2bn.

RBC and BMO in talks to sell Moneris

According to the Financial Times, the private equity firm, which owns Verifone and holds a stake in Paysafe, is in discussions to acquire the Canadian merchant processor.

A deal could be agreed by the summer, although talks have taken longer than expected and may still fail to produce a transaction. Other bidders could also yet emerge.

The potential sale would mark a significant moment for Canada’s payments market. Moneris was founded in 2000 by RBC and BMO and has become one of the country’s most important merchant acquiring platforms.

It processes more than five billion transactions a year and is understood to handle roughly a third of all business transactions in Canada.

A valuable but increasingly demanding business

Moneris provides a broad range of payment services to merchants, including point-of-sale terminals, self-service kiosks, mobile payment tools, ecommerce checkout integrations and an all-in-one online commerce platform.

The company supports more than 325,000 points of commerce across Canada, making it a deeply embedded part of the country’s retail and services economy.

Yet scale alone no longer guarantees strategic fit for bank-owned payments processors. Merchant acquiring has become more capital-intensive, technologically complex and competitive.

Global specialists such as Stripe, Adyen, Fiserv and Worldpay have raised expectations around software integration, data services, omnichannel commerce and international reach. Banks that once viewed acquiring as a natural extension of their commercial relationships are increasingly asking whether they remain the best long-term owners of these platforms.

Private equity sees consolidation potential

For Francisco Partners, Moneris would fit neatly into a payments portfolio that already includes Verifone, one of the best-known names in point-of-sale technology, as well as an interest in Paysafe.

With about $45bn in assets under management, the firm has the financial capacity and sector experience to pursue a platform-building strategy in payments infrastructure.

Moneris could offer Francisco Partners a strong domestic position in Canada, established bank relationships and significant merchant volume. The opportunity would be to modernise the business further, deepen its software capabilities and potentially connect it with other assets across the firm’s payments ecosystem.

Part of a broader North American trend

The reported talks follow a wider pattern across North America. TD Bank has already transferred control of part of its Canadian merchant processing business to Fiserv, while Bank of America, Fifth Third Bank and PNC Financial Services have also moved to reduce exposure to payments processing operations.

For RBC and BMO, a sale would release value from a mature joint venture while allowing them to focus on core banking, wealth and capital markets activities. For the payments sector, the message is clear: merchant acquiring is becoming less a banking utility and more a specialist technology business.