Report: Barclays Explores Payments Business Revamp

U.K. banking giant Barclays is reportedly considering major changes to its payments operations.

The bank has spoken with consultants to determine whether it should expand some of its payments businesses or merge them with other providers, Reuters reported Wednesday (June 7), citing unnamed sources.

The review will include Barclays bank card issuance businesses and its merchant payment services operations, although the study may not lead to any changes, according to the report.

“Our three businesses continue to perform well, and our business mix is robust — growing our global payments business is a priority for us,” a Barclays spokesperson said Wednesday when reached for comment by PYMNTS.

Barclays’ payments activity is divided between its U.K. Barclaycard business and its global consumer, card and payments division, Reuters reported. That business recorded a 35% jump in revenue last year as Americans racked up larger card balances (along with a 19% decline in pre-tax profit due to an increase in impairment charges.

Other banks in Europe have begun monetizing their payments operations and teaming up with specialist providers to focus on key strengths, according to the report.

Collaborations between banks and FinTechs aren’t just useful; they are also increasingly necessary in the wake of new open banking rules.

For example, regulations proposed by the Consumer Financial Protection Bureau (CFPB) will require banks to make certain information available through two application programming interface (API)-accessible portals: one consumer-facing and the other offering third-party access.

However, many banks can’t meet those requirements, as they use legacy back-end systems that can’t support those capabilities easily.

Meanwhile, PYMNTS research found that 42% of consumers said they would be at least somewhat likely to leave a bank that did not bundle its services into a convenient package.

And while 57% of respondents said they enjoy the ease and convenience of bundled banking, consumers also have worries about bundled banking products that banks need to address to retain those customers.

“Fears about fraud and concerns about complexity are the top reasons why some consumers are not interested in bundled banking solutions that give payment recommendations,” said the study “Bundled Banking Products: Matching Product Offerings With Customer Demand,” a PYMNTS and Amount collaboration.