U.S. Bancorp Targets Businesses for More Payments Services
(Bloomberg) -- U.S. Bancorp sees an opportunity to offer more payments services to its business-banking customers, looking to bolster an operation that already generates more than a quarter of net revenue.
Just 308,000 of the company’s 1.1 million business clients with revenue of less than $25 million utilize payment services, according to a presentation Thursday.
The division, which offers corporate-payment systems and processes merchant and card transactions, is facing more competition from the likes of fintech upstarts such as Square Inc. But unlike its rivals, U.S. Bancorp is the nation’s largest regional lender by assets.
“If you think about most of the banking industry, they have banking services, but they don’t really have the payments capabilities that U.S. Bank has,” Chief Financial Officer Terry Dolan said in a phone interview Thursday after the Minneapolis-based company reported third-quarter results. “We know there’s the opportunity to be able to broaden that relationship, deepen it, make it stronger.”
The payments business accounted for 27% of net revenue in the third quarter and the same share for all of fiscal 2019. The division helped to fuel the company’s sixth straight earnings beat, with net income clocking in at $2.03 million and earnings per share of $1.30.
Third-quarter net interest income fell from a year earlier, and the shares dropped 2.2% as of 3:44 p.m. in New York.
Read a snapshot of U.S. Bancorp’s third-quarter results
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