The acquisition, according to Bidvest Bank MD Japie van Niekerk, will form part of a “significant building block” towards the company’s strategy to expand on its value proposition for its business banking clientele, Fin24 reports.
“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,” he was quoted saying.
FDRSA is the local subsidiary of the First Data Corporation, a global e-commerce payment company that services around 4 000 financial institutions in over 100 countries worldwide and powers over 2 800 payment transactions per second daily, with annual transactions totalling $2,2 trillion.
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Given that the leading business banks in the country tend to focus on medium to large enterprises, Van Niekerk said the company had identified a gap in the market to offer a niche product offering to small to medium enterprises, targeting businesses with an annual turnover of R5 million to R500 million.
The new business will be rebranded as Bidvest Merchant Services and the parties have signed an exclusive 10-year contract that will enable Bidvest to access First Data’s regional payment processing platform.
“We saw a gap in business banking in SA for a smaller, more nimble independent player, especially one that can focus on medium-sized enterprises. The acquisition forms part of the full service we can offer,” Van Niekerk said.
Over the years, Bidvest Bank has diversified from being a foreign exchange-focused bank to other banking services and its credit rating was recently upgraded by Moody’s from A1 to Aa2.