UniCredit SpA is considering strategic options for its payment arm including potential joint ventures to boost services and increase the division’s revenue, according to people with knowledge of the matter.
(Bloomberg) — UniCredit SpA is considering strategic options for its payment arm including potential joint ventures to boost services and increase the division’s revenue, according to people with knowledge of the matter.
Italy’s second-biggest bank is exploring a range of possibilities, including teaming up with European or US firms that provide payment services, the people said, asking not to be identified because the information is private. It’s also considering accords and partnerships for specific business segments, they said. The deliberations are said to be at an early stage and may not lead to action.
A spokesman for UniCredit declined to comment. UniCredit’s payment activity offers a range of services including merchant acquiring, cards and payment processing.
Chief Executive Officer Andrea Orcel is working to streamline the lender, cut costs and boost revenue, while at the same time offering one of the biggest shareholder payouts in Europe. UniCredit is focusing on more lucrative products and capital-light activities to increase the bank’s income. Revenue at the transaction and payment business, just one part of its payment activities, rose 14% last year to €2.3 billion ($2.5 billion).
The European payments industry is in a phase of rapid consolidation, with banks seeking partners or disposing of their own units and specialized players ramping up their business. Credit Agricole SA is in talks with Worldline SA for a potential partnership in payments, while Italy’s Banco BPM SpA is considering a possible sale or partnership for its payments unit. Italian lenders including Intesa Sanpaolo SpA, BPER SpA, Banca Monte dei Paschi di Siena SpA and Banca Carige SpA have all sold their merchant-acquiring businesses in the past five years.
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