In reading through various “expert” opinions on the topic of the FIS-Worldpay merger, the positives for banks seem to be:
- Better fraud (full circle) fraud recognition
- Expanded merchant acquiring services
- Expanded eCommerce services
- Expanded data collection on customers
Other than the fraud services, most of these sound like benefits to FIS, not necessarily to their banks and credit union customers. The major downsides for community financial institutions, as we see them, would probably be:
- Reduced competition which could lead to higher prices
- Distraction for FIS as they try to integrate Worldpay into their organizational structure
- The organization my be becoming too large to adequately support community banks and credit unions
When we look at competition in the payments space, we see that in the past year, Vantiv was swallowed by Worldpay, which was then acquired by FIS and Fiserv acquired First Data and Elan. The acquisition of card and payments providers by organizations that were historically core providers seems to definitely be reducing the community credit union and banks options for where they might shop for better service.
Our hope is that these larger, more robust organizations will step up the game for client support and overall service. For now, I think banks and credit unions will need to take a wait-and-see approach.