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posted by martyb on Saturday July 08 2017, @03:14PM   Printer-friendly
from the trends-and-insights,-too dept.

In the world of financial technology, where startups are the focus of M&A chatter, a $10 billion combination of two back-office processors whose roots date to the 1970s might seem unusual.

But Vantiv Inc's (VNTV.N) plan to acquire Worldpay Group PLC (WPG.L) shows that the sheer size of some legacy players - and the inertia of their customers - makes them more interested in buying one another than newer rivals, bankers and analysts said. The two companies facilitate payments by linking stores to customers' bank and credit-card accounts.

"It's a pretty sticky product," said Thad Peterson, an analyst at Aite Group. "Once merchants find a processor that works for them, they are unlikely to change. Merchants aren't in the business of payments, they are in the business of selling stuff."

Vantiv started as a project inside of Cincinnati-based regional lender Fifth Third Bancorp (FITB.O) during the Nixon era. Worldpay, headquartered in London, was launched by a British lender in 1989 and absorbed into Royal Bank of Scotland (RBS.L).

Both companies were spun out of their banks after the financial crisis and thrived on their own continents. Now they are poised to become the singular middleman for more sales globally than any other wholly-owned merchant payments processor based on the $1.3 trillion worth of transactions they handled in 2016, according to data from The Nilson Report.

Source: Reuters


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  • (Score: 0) by Anonymous Coward on Saturday July 08 2017, @03:47PM (8 children)

    by Anonymous Coward on Saturday July 08 2017, @03:47PM (#536551)

    These companies can reverse any transfer into your accounts at any time and then tell *you* to file a police report to stop it. Read the fine print and you will see there is no timeperiod after which a transfer can be considered really complete.

  • (Score: 3, Funny) by kaszz on Saturday July 08 2017, @04:13PM (5 children)

    by kaszz (4211) on Saturday July 08 2017, @04:13PM (#536557) Journal

    Move the money immediately to another bank?

    Interesting world where you buy phones that never become yours with money that you don't own to a merchant that don't really get paid. Nothing is real.
    Soon fake money will take a whole new meaning ;)

    • (Score: 3, Funny) by maxwell demon on Saturday July 08 2017, @04:23PM (4 children)

      by maxwell demon (1608) on Saturday July 08 2017, @04:23PM (#536563) Journal

      Add to that: You probably bought the phone with money you borrowed from a bank that didn't actually have it.

      --
      The Tao of math: The numbers you can count are not the real numbers.
      • (Score: 0) by Anonymous Coward on Saturday July 08 2017, @04:45PM (2 children)

        by Anonymous Coward on Saturday July 08 2017, @04:45PM (#536569)

        And the money needed to pay back the interest on all those loans does not even exist yet. EG https://realcurrencies.wordpress.com/2013/04/01/is-there-enough-money-to-pay-off-debt-plus-interest-a-closer-look/ [wordpress.com]

        • (Score: 2) by kaszz on Saturday July 08 2017, @04:47PM

          by kaszz (4211) on Saturday July 08 2017, @04:47PM (#536571) Journal

          The point of debt is not to pay it back but to make people pay rent for their plain existence. At least so it seems.

        • (Score: 0) by Anonymous Coward on Saturday July 08 2017, @05:55PM

          by Anonymous Coward on Saturday July 08 2017, @05:55PM (#536588)

          That's because banks and financial institutions are allowed to charge high interest rates, leverage themselves and some assets depreciate.

          The interest rates themselves are set based in part on how much of the loan is expected to be written off or uncollectable.

      • (Score: 2) by kaszz on Tuesday July 11 2017, @05:27PM

        by kaszz (4211) on Tuesday July 11 2017, @05:27PM (#537689) Journal

        So you buy a phone that are new shiny that don't really have any function besides in the cloud and that never become yours with money that you don't own from a bank that don't have them and thinking you give them to a merchant that will only really get money they don't have.

        The end game is that people give up real work for nothing.

  • (Score: 0) by Anonymous Coward on Saturday July 08 2017, @04:27PM (1 child)

    by Anonymous Coward on Saturday July 08 2017, @04:27PM (#536564)

    Is this important for customers or for merchants/sellers?

    Thinking about PayPal, where customers can often reverse a transfer after receiving goods from a seller -- and the seller often has very little recourse (at least in my limited experience).

    • (Score: 0) by Anonymous Coward on Saturday July 08 2017, @04:47PM

      by Anonymous Coward on Saturday July 08 2017, @04:47PM (#536572)

      Yes, it is the same. Paypal is just particularly egregious about this.