RBC and BMO consider sale of jointly-owned payments company Moneris - Trade Treasury Payments

Royal Bank of Canada (RBC) and Bank of Montreal (BMO) are considering selling Moneris, the payments company they jointly own, sources familiar with the matter told Reuters. The review is still at an early stage, and no final decision has been made, but if the banks do decide to move ahead, the deal could value Moneris at up to $2 billion.

The banks have appointed PJT Partners, alongside their own capital markets teams, to advise on the review. These talks are private, and neither RBC and BMO have issued public comments on the matter, though both have reiterated their continued focus on customer service and compliance across their core operations.

Moneris is one of Canada’s largest payment companies

Moneris was created in 2000 by RBC and BMO and today, it processes about one in every three card transactions in Canada. It provides payment systems to over 325,000 businesses, including in-store, mobile, and online solutions. The company also offers services such as fraud protection and customer data tools.

Many large banks in North America are now focusing more on their core banking services, including lending, wealth management, and customer deposits. As a result, some are choosing to sell or reduce their ownership in payment businesses, which are becoming more complex and expensive to manage. 

Earlier this year, TD, another of Canada’s Big Five banks, made a deal with Fiserv, a global payments company. As part of the deal, Fiserv took over part of TD’s merchant payments business, including around 3,400 business clients, allowing the bank to reduce its internal costs, while giving business clients access to Fiserv’s Clover system (a platform that helps them manage payments, sales, and inventory).

If RBC and BMO decide to sell Moneris, the company may attract interest from international payment firms or private equity investors. Moneris has steady revenue, a large customer base, and strong market share in Canada.

A sale is not guaranteed and the exact structure of any deal, if it does happen, is still a matter of debate. The banks may also decide to keep full or partial ownership. But any change in ownership would be a major development in Canada’s payments market, which is becoming more competitive and more digital.