Elavon has seen another round of layoffs in recent weeks, with employees set to depart during the first two weeks of March as part of their working severance. Morale hasn’t been this low in all my time at the company.
Any further updates on what’s happening in the Elavon world?
When one of your largest shareholders and a competitor (yes, J.P. Morgan Chase is a major shareholder of U.S. Bancorp, in excess of 40 million shares, approximately $1.9 billion in value) asks you those types of questions, you really need to have a solid answer, before making the call to an analyst to provide you a valuation of your payment acquiring business (which you have to do anyway now since a shareholder asked the question)
Andy and Gunjan’s comments showcase a fundamental disconnect from the reality of Elavon and the broader merchant services industry. While they speak about the “interconnectedness” of banking and payments, Elavon's experience with the bank tells a different story—one plagued by a lack of true understanding in the acquiring space.
The notion that payments “anchor the client value proposition” might be true in theory, but in practice, USB has struggled to deliver a competitive, merchant-centric offering that fosters long-term loyalty. The industry is moving toward agile, tech-driven solutions that prioritize transparency, customer service, and competitive pricing—areas where USB has consistently lagged behind.
Furthermore, the emphasis on “profitability” and “capital efficiency” suggests a continued focus on extracting fees rather than delivering real value to merchants. The reality is that merchants today demand flexibility, ease of integration, and a true partnership, none of which USB has demonstrated at scale.
If their strategy is truly to retain and grow this business, they need to address the gaps between their rhetoric and the actual merchant experience. Otherwise, they risk continuing to lose ground to more nimble, innovative competitors who understand what merchants actually need.
Andrew Cecere
I'll start Vivek and ask Gunjan to add on. But I think in this environment, this interconnectedness of banking and payments is as important as it's ever been. And the concept of moving money together with storing money and lending money is all intertwined. And to the extent we can offer these things together, with a terrific technology platform that we have, and also have the ability to grow that in a very capital-efficient, fee focused way is why we want to retain the business.
And the interconnectiveness of that is as critical as it's been in the last 20 years. So we're very focused on this business because of that opportunity. And Gunjan why don't you add on?
Gunjan Kedia
Good morning, it's a thoughtful question. And I'll add to what Andy is saying here. First, just -- we are talking about deltas to expectations, but the business has very high returns. It's a very attractive business. It is an area where a lot of competitive set has been building market share, and we are seeing more disciplined come into this industry, just focus on profitability, focus on a return on investments rather than just market share gains.
And if you look long term, it is the one product where we have frequent deep and embedded interactions with our clients, and it anchors the client value proposition and the client retention in a way that is very hard to do from some of the banking and some of the more sort of routine products. So we have deep conviction that money movement needs to be on the center of a financial relationship with the clients surrounded by banking capabilities.
I also just remind you of the size of just the various parts of our payments business. It's a 25% of our total revenue, two-thirds of that our core credit card, card issuing business, very healthy, very steady market shares there. Our corporate payment and card issuing business is also looking at very healthy pipelines.
All of this gives us great capacity to stay with the [indiscernible] business and build it out both for the small business and for the corporate areas. So to answer your question, it's a good question. And strategically, you want this capability in the mix with your clients.
Operator
We'll go next to Vivek Juneja at JPMorgan.
Vivek Juneja
Hi. Thanks for taking my question, Andy. So, a strategic question. Payments, there's been some discussion about that already. And it's a question we've talked on previous calls. I heard Gunjan's response, the tech-led is doing well, but the rest continues to drag. And that probably cut news into next year. Given the business, given the pricing pressures, have you considered about whether you should get rid of this business and deploy the capital to other areas where you’re doing a much -- where you're in a much stronger position, getting better returns? Why wouldn't you think of that?
People saying there is no Elavon are truly clueless. The building and business is still branded Elavon(as well as Nova, before the bank fu---d it up).
I was absorbed into the bank system from Elavon and leadership at the bank had no idea how a processor works. None. No wonder times are rough at Elavon now. They lack leadership(like the bank in general).
I was laid off in September 2023. Do software engineers normally get laid off from elavon?
Yes and no. Generally speaking, most “Elavon” employees feel disconnected and not recognized by the bank as one of their own and most don’t think that will ever change. Yes, the bank’s presence has been felt more recently than ever before but the legacy leaders and bad practices and habits continue to rule Elavon.
The outlook is not positive given the revenue expectations and the current realities of the industry. It will take several miracles to turn things around so let’s check back in in a few months
Elavon used to have great talent. Almost all the good ones left. We are now left with mediocre if not downright useless talent who somehow continue to bring USB down.
Well. It better. Else USB would sell it for scraps and move on. Same for any business line. Elavon ain’t some special entity like some of you tend to think.
Elavon still operates as a separate entity despite being acquired by U.S. Bank, largely due to its significant business outside the bank channel. In fact, the majority of Elavon’s business comes from external financial institution (FI) channels rather than U.S. Bank itself. Ironically, while U.S. Bank owns Elavon, it struggles to attract merchant services business on its own.
Banking partners may claim expertise in merchant services, but the reality is they often lack the knowledge and experience.
There is no such thing as Elavon. It was merged as a part of U.S. Bank a long time ago.
Juicy! Making popcorn right now. Please, do tell more!
It’s the U.S.
U.S. based here: truly sad what this place has become. The last 12-18 months have been horrible with so many good employees leaving or being let go. Very sad
What departments this time? And did they once again go to Poland?
Is this in Europe or just US?