Payment processor First Data Corp. reported late Wednesday that it has extended its joint venture with Wells Fargo & Co.’s Wells Fargo Bank, which is one of the nation’s largest merchant acquirers and an important contributor to First Data’s payment volume and profits, until the end of 2024.
Banks remain one of the most important and profitable sales channels for merchant processors despite the rise of integrated software vendors and other sources of new merchant accounts in recent years, according to Jared Drieling, senior director of business intelligence at The Strawhecker Group.
“Although slightly decreasing over the last three years, bank-sourced merchants represent almost a third of all new merchants in the industry,” Drieling tells Digital Transactions News by email. “In addition, bank-channel merchants outperform other non-bank channels in key performance metrics such as attrition or growth. Most importantly, the bank channel’s merchant lifetime net revenue is twice that of non-bank channel.”