JP Morgan strengthens merchant acquiring service with Renovite acquisition

JP Morgan stands firm on merchant acquiring service with Renovite acquisition

by | September 12, 2022 | bobsguide

JP Morgan has signed an agreement to acquire California-headquartered cloud-based payments technology company, Renovite Technologies (Renovite), to build its merchant acquiring platform.

The financial firm is acquiring Renovite for an undisclosed sum and will also leverage the latter’s capabilities to enhance its payments modernisation strategy and support its journey to the cloud.

Renovite has been a service provider to JP Morgan since 2021.

The target group owns six proprietary, cloud-agnostic and payment token-agnostic payment products to enable clients to optimise their infrastructure, including switch, reconciliation, security issuing, ATM, and testing.

Following the closing of the transaction, JP Morgan will integrate Renovite into its payments ecosystem, combining it with existing corporate treasury services, trade finance, card, and merchant services capabilities at the firm.

“Renovite’s cloud-native merchant acquiring capabilities are already helping us better serve our clients. As the Renovite platform integrates with JP Morgan payments, merchant acquiring clients will be able to accept more methods of payments around the globe to help grow their business,” said Mike Blandina, global head of payments technology at JP Morgan.

JP Morgan shops to boost payment capabilities

The latest buyout is in line with JP Morgan’s broader, acquisitive approach to bolstering its payment capabilities amid its anticipated demand for scalable payment solutions among merchants.

To that end in January, JP Morgan acquired a 49% stake in European cloud-based payments fintech, Viva Wallet, amid the increasing demand for digital payments experience.

At the time of the acquisition Takis Georgakopoulos, global head of JP Morgan payments said, “The European payments landscape is fragmented yet large in terms of opportunity, with more than 17 million merchants ready to implement scalable payments solutions and this is a big focus area for added growth for JP Morgan Payments in the future.”

In September 2021, the financial firm further boosted its payments capabilities with the acquisition of close to 75% controlling interest in the payments platform of Volkswagen Financial Services.

Banks and payment companies make their moves

As payment technology companies gain a stronger foothold in the consumer segment, traditional firms have been slowly pushed out of the payment handling business.

In response to the competition, financial firms have either sold their payments businesses to focus on their core businesses or partnered with payment technology specialists to remain competitive.

In June, Milan-listed paytech Nexi signed a strategic agreement with Italian bank Intesa Sanpaolo and BPER Banco to acquire their respective merchant acquiring businesses.

Greek lenders like Eurobank and Piraeus Bank have also surrendered part or all their acquiring businesses to payment groups like Worldline and Euronet, respectively.

In November last year, the Bank of Ireland extended its partnership with EVO Payments for merchant acquiring and payment processing services.

The influx of activity in the payment space comes as firms look to capitalise on the potential share of the industry.

According to data from McKinsey analysis of card transactions at US merchant acquirers, payments performance and commerce enablement could account for approximately 80% of revenue growth in payments-related merchant services over the next five years.

Mckinsey also expects SMBs to spend over $100 billion on payment services by 2025, encouraging both payment and traditional financial firms to act bolstering their technology with new acquisitions.



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