BMO and RBC Retreat From Payments Processing in $1.44bn Moneris Sale.

Bank of Montreal and Royal Bank of Canada have agreed to sell their jointly owned payments processor, Moneris, to US private equity firm Francisco Partners for cash consideration of about $1.44bn.

The two banks aren’t making a clean exit. Alongside the sale, BMO and RBC are each entering exclusive, long-term referral arrangements with Moneris, meaning they’ll keep steering business clients to the company even after giving up ownership.

Moneris processes payments for more than 325,000 merchant locations across Canada, or roughly one in three of the country’s commercial card transactions, and employs close to 2,000 people. James Hicks, president and chief executive of Moneris, said the deal marked “the next step in Moneris’ continued evolution” and that its commitment to customers, partners and staff “remains unchanged.”

Banks book uneven gains

BMO and RBC are each receiving 50% of the sale proceeds, or about C$1bn apiece. But the two banks expect to book different gains from the same transaction: BMO’s own filing puts its after-tax gain at approximately C$600m, lifting its core capital (CET1) ratio by around 15 basis points, while RBC’s filing puts its after-tax gain at approximately C$475m, with only a marginal capital benefit.

Neither bank’s release explains the gap, which most likely reflects different carrying values for their respective stakes on each bank’s own balance sheet rather than any difference in the underlying sale terms.

Sharon Haward-Laird, group head of Canadian commercial banking at BMO, said the deal would let Moneris “build on that strong foundation while accelerating its strategy in a rapidly evolving payments landscape.” Sean Amato-Gauci, RBC’s group head of commercial banking, said Moneris had helped Canadian businesses “modernize and scale” and that Francisco Partners would amplify “the trusted team, leading platforms and unwavering commitment to clients” the company is known for.

A retreat flagged months earlier

The sale process was first reported by the Financial Times in May, and covered at the time by Crowdfund Insider, which said the two banks were in advanced talks to hand Moneris to Francisco Partners as they faced competition from technology-led processors such as Stripe and Adyen and shifted their own focus towards lending and wealth management. Moneris generated annual revenue of close to $700m at the time of that reporting.

Francisco Partners, which manages about $45bn in assets, already owns payments hardware and software provider Verifone and holds a stake in Paysafe. Its past payments and fintech investments also include Hypercom, Paymetric, PayLease and NMI, according to the companies’ own announcement of the deal. The Moneris deal gives the firm a third significant position in payments infrastructure, adding a processor that dominates a single national market rather than one operating across borders.

Peter Christodoulo, a partner at Francisco Partners, said the firm saw “a significant opportunity to build on that foundation through continued investment in innovation, platform expansion and long-term growth” at Moneris. Jeff Sloan, the former president and chief executive of Global Payments, is joining Moneris as chairman as part of the transaction.

The deal is subject to clearance under Canada’s Retail Payment Activities Act and Competition Act, and is expected to close by the end of the first quarter of BMO and RBC’s 2027 financial year. Given Moneris’s share of Canadian card processing, how closely the Competition Bureau examines the deal, and on what terms, is likely to be the next thing worth watching.