Royal Bank of Canada and Bank of Montreal are in advanced talks to sell their joint payments business, Moneris, to Francisco Partners in a deal that could value the Canadian processor at more than $2 billion, according to the Financial Times. The private equity group, which owns Verifone and holds a stake in Paysafe, has emerged as a natural buyer for a company with deep merchant-processing infrastructure and a large installed base across Canada.

Moneris processes more than 5 billion transactions a year, making it one of the country’s most important payments firms. The Financial Times said the negotiations have stretched on for some time, but a transaction could still be completed by the summer, even though the talks could yet collapse or attract rival bidders.

Any sale would fit a broader pattern in North American banking. Over the past few years, lenders have steadily retreated from payment processing as specialist firms such as Adyen and Stripe have expanded their reach, reshaping a market once dominated by banks. TD Bank sold its Canadian merchant-processing business to Fiserv, while Bank of America, Fifth Third Bank and PNC Financial Services have also pared back parts of their payments operations, according to the Financial Times.

The strategic logic also mirrors a wider wave of fintech dealmaking. PYMNTS has noted that recent acquisitions are increasingly aimed at controlling more of the transaction chain, from pricing and incentives to settlement and data. Adyen’s planned purchase of Talon.One is a case in point, giving it loyalty and promotions tools that can be embedded directly at checkout. In that context, Moneris would offer Francisco Partners another way to deepen its grip on the mechanics of how payments are initiated and completed.

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Source: Noah Wire Services