Royal Bank of Canada and Bank of Montreal Explore Sale of Moneris Payments Venture

Royal Bank of Canada and Bank of Montreal are exploring the possible sale of their joint merchant-payments venture, Moneris, for around $2 billion. The banks are re-assessing strategic priorities in a crowded and tech-intensive payments landscape, where banks are increasingly ceding ground to nimble specialists or private-equity-backed outfits. Moneris handles a third of all payment transactions in Canada, servicing 325,000 merchant locations and delivering $700 million in annual revenue.

Royal Bank of Canada (RBC) and Bank of Montreal (BMO) are reportedly exploring the sale of their joint merchant-payments venture, Moneris, for around $2 billion. The move comes as the banks reassess their strategic priorities in a rapidly evolving and tech-intensive payments landscape, where traditional banks are increasingly ceding ground to more agile specialists or private-equity-backed firms.

Moneris, founded in 2000 by RBC and BMO, is one of Canada's largest payment processors, handling approximately one-third of all payment transactions in the country. The company serves around 325,000 merchant locations, offering digital, mobile, and in-store payment systems. With an annual revenue of nearly $700 million, Moneris has become a significant player in the Canadian payments sector.

The banks are in the early stages of exploring a potential sale, with boutique investment bank PJT Partners, RBC Capital Markets, and BMO Capital Markets advising on the transaction. The valuation of $2 billion is based on the company's revenue and market share, but the final price could be slightly lower. A sale is not guaranteed, and the banks could choose to keep part or all of the company [1].

The sale of Moneris is part of a broader trend where banks are offloading non-core assets to focus on high-margin services. This trend is driven by the need to regularly invest in capital to remain competitive in the digitization of the payments industry. Potential buyers for Moneris include payments technology firms and private equity groups, drawn to the company's recurring revenue model and Canadian market dominance [2].

Regulatory scrutiny by Canada's Competition Bureau may limit buyers or require carve-outs to address antitrust concerns. The Competition Bureau will closely examine any transaction that could reduce competition in the payments market, given Moneris's dominance. This could potentially limit the pool of potential buyers or necessitate adjustments to the transaction to satisfy antitrust concerns [3].

For RBC and BMO, the Moneris divestment aligns with a broader strategy to streamline operations and redirect capital toward higher-growth areas such as digital banking, wealth management, and AI-driven financial services. The banks' decision to retain advisory roles with PJT Partners and their own investment banks suggests a calculated approach to maximizing value while maintaining flexibility.

The potential sale of Moneris underscores the evolving dynamics of the payments sector in North America. It reflects broader trends in capital allocation, technological disruption, and the shifting priorities of financial institutions. The transaction offers a lens through which to assess the strategic calculus of banks, the appetite of private equity and fintech players, and the long-term value of recurring revenue models in a rapidly consolidating market [4].

References:
[1] https://ca.finance.yahoo.com/news/rbc-bmo-explore-sale-2-173122318.html
[2] https://www.reuters.com/legal/transactional/rbc-bmo-planning-sale-2-billion-canadian-payments-venture-sources-say-2025-08-14/
[3] https://www.tradefinanceglobal.com/posts/canadian-payments-giant-moneris-up-for-sale-1-5bn/
[4] https://www.ainvest.com/news/strategic-divestment-payments-analyzing-rbc-bmo-moneris-sale-implications-canadian-fintech-sector-2508/