Dutch bank Rabobank is to purchase a minority stake in payment service provider Fin-Force, while also outsourcing its payment processing operations to the company.
Rabobank will buy a 22% stake in the Belgium-based payments company which was created five years ago by Belgium’s KBC Bank and US IT infrastructure provider EDS. The cost of the acquisition has not been revealed, however Rabobank will receive a seat on Fin-Force’s board as a result.
Furthermore to the equity purchase, in order to preparation for the introduction of the European Union’s Single European Payments Area (Sepa) in 2008, Rabobank will outsource its international payments processing operations to Fin-Force. The move will result in up to 60 job reductions at the Dutch bank over an undisclosed period.
Explaining the development Piet Van Schijndel, member of the board of Rabobank, commented: This alliance will enable us to keep the expense involved in the back-office processing of cross-border payments low. If we continue to do everything ourselves, we’ll have to make major investments in IT hardware and software.