Publications
Partners
Cape Town - Bidvest Bank has acquired 100% of First Data Resources SA (FDRSA), the South African subsidiary of First Data Corporation, a global leader in commerce-enabling technology.
The acquisition of FDRSA, First Data’s South African acquiring business is in line with Bidvest Bank’s strategy of diversifying its revenue streams to service a broader market and will complement its business banking offering. FDRSA will change its name to Bidvest Merchant Services.
“The acquisition provides a bolstered offering for our existing banking customers and is a significant building block towards our expanding business banking customer value proposition,” says Japie van Niekerk, managing director of Bidvest Bank.
This latest acquisition reflects Bidvest Bank’s effective diversification strategy. This steady growth over the last 10 years, combined with its prudent lending philosophy, recently saw Moody’s Investor Services upgrade its long-term national scale rating to Aa2 from A1, an increase of two units.
Bidvest regards First Data is a global leader in commerce-enabling technology, serving approximately six million business locations and 4 000 financial institutions in more than 100 countries around the world.
First Data powers more than 2 800 payment transactions every second of every day, totaling $2.2trn in annual transactions.
“As we move forward with our strategy to diversify Bidvest Bank’s market offers, we are making substantial progress with the development of our business banking value proposition. FDRSA contributes an important component for our merchant customers,” Van Niekerk explains.
Following the acquisition, there will remain a long-term agreement for an exclusive 10-year processing agreement whereby Bidvest Bank will have access to First Data’s regional payment processing platform.
Van Niekerk told Fin24 on Thursday that Bidvest has already been in a relationship with First Data for a number of years.
"We first entered into a joint venture, but then saw the opportunity to acquire it," said Van Niekerk.
"We saw a gap in business banking in SA for a smaller, more nimble independent player, especially one that can focus on medium size enterprises. The acquisition forms part of the full service we can offer."
Van Niekerk added that the market is not easy at the moment and there are growth constraints, but Bidvest is finding a lot of demand for service in the SME area.
"So we now have a tech strong product which can compete on the price side," he said.
"Six years ago we were 100% focused on forex, but now we have diversified - something we were advised to do by the SA Reserve Bank (SARB) and Moody's. It has stood us in good stead."
He pointed out that an acquiring business has to be volume based, but not with undue risk.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
