JPMorgan Chase has agreed to acquire Fremont, California-based payments services company Renovite Technologies, the bank said in a press release Monday.
A spokesman for JPMorgan Chase declined to say how much the New York City-based bank plans to pay for the company.
Acquiring cloud-native Renovite will allow JPMorgan to update the services it offers merchants for acquiring their card payments, the bank said.
“This acquisition will help us achieve our goal to develop the next-generation payments processing platform globally,” Max Neukirchen, JPMorgan’s global head of payments and commerce solutions, said in the release.
The plug-and-play nature of Renovite’s platform allows JPMorgan to add new payments options more quickly than before because it requires less coding, Neukirchen told CNBC.
"The ability to turn on these very country-specific payments methods … helps us in our geographic expansion, because we don't need to spend a lot of time building out local payment methods," he told the network.
That interchangeability was crucial to JPMorgan’s decision to purchase Renovite rather than to simply continue the relationship the bank established with the fintech last year, when the two companies began to run trials, Mike Blandina, JPMorgan's global head of payments technology, told CNBC.
The JPMorgan spokesman didn’t immediately respond to a question about how many employees Renovite has or whether they will be retained. But CNBC reported the fintech has roughly 125 engineers in India and the U.K.
Renovite will become part of J.P. Morgan Payments, which houses corporate treasury services, trade finance, card and merchant services capabilities.
“This business is the natural home for our people and technology,” Viren Rana, Renovite’s CEO, said in Monday’s release, adding the transaction “will help us to realize our joint vision to deliver world-class payments capabilities globally through next-generation infrastructure.”
The acquisition also is expected to boost JPMorgan's merchant-acquiring revenue, which leveled off last year partly because the bank offered fewer services than some fintech rivals. The addition of Renovite could help JPMorgan to better compete with the likes of Stripe and Square.
If successful, the combination may also help the bank justify its 8.6% increase in expenses over 2021. Wells Fargo analyst Mike Mayo derided the $77 billion figure as “front-loaded spending for less certain back-ended benefits.”
The Renovite deal also builds on JPMorgan’s recent streak of acquiring or making significant investments in nonbank entities — especially with an overseas or fintech emphasis.
Regulations prohibit JPMorgan Chase from acquiring additional U.S.-based deposit-taking institutions because it already holds more than 10% of U.S. deposits.
But the bank made more than 30 acquisitions in 2021, Reuters reported, citing data from Refinitiv and Dealogic. That includes a trio of deals last September — for the college financial planning platform Frank; the restaurant platform The Infatuation, which owns the Zagat guidebook; and nearly 75% of German car-maker Volkswagen’s payments platform. JPMorgan Chase also launched a digital-only retail bank in the U.K. last September, months after agreeing to buy British digital wealth management platform Nutmeg.
So far this year, JPMorgan acquired a 49% stake in the Greek fintech Viva Wallet and agreed in March to buy Irish software provider Global Shares.
