Fiserv stock jumps after report says major US banks explored buying card network

Shares of Fiserv climbed more than 6% in premarket trading on Tuesday after a report said several of the largest US banks had explored acquiring one of the fintech company's debit-card networks, highlighting the growing strategic importance of payments infrastructure as banks compete with fintech firms and crypto players.

According to The Wall Street Journal, JPMorgan Chase, Bank of America, Wells Fargo, and PNC Financial Services Group have in recent months held preliminary discussions about a potential acquisition of a payments network owned by Fiserv.

The discussions remain tentative, and there is no certainty that a transaction will materialize.

The report said several banks that reviewed the opportunity have already concluded they are unlikely to proceed.

Reuters also reported that some institutions expressed concerns that such a deal could trigger opposition from lawmakers, regulators, and merchant groups.

Payments race drives interest

The reported discussions underscore how aggressively traditional banks are searching for new ways to strengthen their position in the fast-changing payments industry.

The sector has faced mounting competition from fintech companies and digital assets as the Trump administration has taken a more supportive stance toward financial innovation and cryptocurrencies.

Owning payment infrastructure could provide banks with greater control over transaction processing while potentially creating new revenue opportunities.

Durbin amendment is at the centre of the debate

The interest in Fiserv's network is also tied to long-running debates over debit-card interchange fees.

Under the Durbin amendment, a provision of the 2010 Dodd-Frank Act, large banks face limits on the debit-card fees they can collect from merchants when transactions are routed through outside payment networks.

However, banks that own a payments network are exempt from those caps, making ownership of such infrastructure strategically valuable.

Interchange fees are paid by merchants whenever consumers use debit cards and largely flow to the financial institutions issuing those cards.

The Federal Reserve regulates these fees for banks with more than $10 billion in assets.

Banks have long argued that reduced interchange income forced them to scale back free checking accounts and debit-card rewards programs after the Durbin rules took effect.

Merchant groups, meanwhile, maintain that lower fees have helped reduce costs for businesses and ultimately benefited consumers through lower prices.

Fiserv operates major debit networks

Fiserv owns the STAR and Accel debit-payment networks, which process debit card transactions across the United States.

According to the company's website, the STAR Network routes debit, ATM, and e-commerce transactions between consumers, merchants, and financial institutions.

The network serves more than 115 million debit-card holders through over 2,800 financial institutions.

The payments infrastructure has become increasingly valuable as banks seek to strengthen their competitive positions in digital payments.

The reported takeover interest comes during a difficult period for Fiserv.

The company has faced significant pressure over the past year, with its shares falling roughly 70% from year-earlier levels before Tuesday's rally.