JPMorgan To Buy This California Payments Startup To Take On Jack Dorsey's Block: Report

Financial services giant JPMorgan Chase & Co. JPM has agreed to acquire California-based Renovite Technologies to solidify its presence in the payment processing arena, CNBC reported.

Renovite is a provider of cloud-native software products and services to mission-critical payment systems.

JPMorgan reportedly ran trials with Renovite as a vendor last fall and decided to go ahead with the acquisition after it was left impressed with the latter’s products, especially a cloud-based switch that routes payments to various providers.

Financial details of the deal were not immediately clear, as per CNBC, which did not cite any specific sources.

JPMorgan did not immediately respond to Benzinga's request for comment.

Why It's Important: The acquisition will help the bank add new payment options in a very short time due to less coding involved. The report also suggested JPMorgan was keen to have Renovite’s 125 engineers on its offshore locations in India and U.K. to expand its product roadmap.

See also: Why This Investor Bought JPMorgan Stock Today

The deal would help accelerate JPMorgan’s rollout of new offerings to merchants, the report said. The financial services conglomerate is presently the biggest provider of merchant services, going by transaction volume, but its merchant acquiring revenue growth stalled in 2021, CNBC noted.

The softness was due to its lagging in some e-commerce segments and the relatively fewer services it offered compared to some of its fintech rivals, JPMorgan’s global payment chief Takis Georgakopoulos told in a May investor conference, CNBC said.

Jack Dorsey’s Block, Inc. SQ and privately-held Stripe have recently made considerable inroads due to the increase in e-commerce sales and the rapid rise in new payment methods, it added.

Price Action: JPMorgan closed Friday's session up 0.48% at $119.17, according to Benzinga Pro data.