JP Morgan Chase is set to bring payment systems back in-house after a joint venture with processing firm First Data is terminated at the end of the year.
Both JP Morgan and First Data said their payment systems were “core” to their strategies, and that they wanted to run their own shares of the Chase Paymentech Solutions venture independently.
Some 51 percent of the joint venture’s assets, as well as its employees in Europe and Canada, will be retained by JP Morgan. The bank will call its service Chase Paymentech, and this will run on an in-house developed platform.
First Data will continue to provide transaction processing and data commerce services for through its current technology platforms, as well as integrating 49 percent of the JV's assets into its existing merchant acquiring business.
The Paymentech business last year processed 19.7 billion payments, comprising more than $719 billion (£365 billion) worth of card payments. It provides the service to more than 600,000 merchants.
The current joint venture promises nearly 100 percent datacentre and processing uptime, support services, and a range of industry-specific services. Customers include direct marketing firms, retailers and petrol stations, hotels and restaurants, airlines, and telecoms and utility firms.
Gordon Smith, chief executive of card services at JPMorgan Chase, said that given the growth and new opportunities in the payments industry, it made sense for the companies to have their own processing businesses.
"Merchants are moving beyond traditional payment vehicles and we expect to be at the forefront of the industry, developing and investing in new forms of payments and related transactions that bring value to merchants.”
First Data said it would strive to make sure there was no disruption to its payment processing services, and that it would continue to offer new payment services and technology.
Last month, JP Morgan Chase said it would spend £15 million on an unrelated operating platform from banking specialist Temenos, to support its treasury management and liquidity services businesses.
It made a £1.2 billion net profit in the first quarter.