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In order to compete with the startup lenders, Wells Fargo & Company WFC is mulling over ideas to simplify the credit and debit card pricing method for small companies. The news was reported by Bloomberg.
The changes to be made are related to small business that process nearly $100,000 per year and deal with a complex pricing policy that require them to enter lengthy contracts and go through confusing rate tables. Also, the prices charged vary from customer to customer.
Pressure has been created on traditional banks by startups like Square and Stripe that are consistently capturing the market on the back of their simple pricing method and technology. Wells Fargo has planned to introduce digital modes of applying for payment-processing capabilities for its customers.
Danny Peltz, head of treasury management and merchant services at Wells Fargo said, “This industry is going through some structural changes -- not withstanding anything that’s happening at the bank -- and that’s driving our decision-making more so than anything else.”
Recently, the bank was charged with yet another lawsuit. A federal lawsuit was filed against the bank by San Antonio-based USAA, a big insurance company, for infringement of the latter’s patented technology.
USAA has alleged Wells Fargo of violating four of its mobile remote deposit capture patents through which users were permitted to deposit checks using mobile devices.
Since revelation of the bogus account openings scandal, Wells Fargo has been hit with a number of probes. These legal hassles are likely to keep its cost base elevated. However, the bank has diligently been taking remedial measures and initiatives to stay afloat. Also, lower tax rates and rising rate environment might help it overcome the negatives.
Shares of Wells Fargo have lost 6.5% over the past six months versus the industry’s growth of nearly 1%.
Wells Fargo currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Fifth Third Bancorp FITB has witnessed 6.4% upward estimate revisions for the last 60 days. Additionally, the stock has gained nearly 22%, in a years’ time. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Northern Trust Corporation’s NTRS current-year earnings estimates have been revised 4.7% upward over the last 60 days. Over the past year, the company’s share price has been up 14.4%. It currently carries a Zacks Rank #2 (Buy).
The Bank of New York Mellon Corporation BK has witnessed 5.4% upward estimate revision in current-year earnings over the last 60 days. Additionally, the stock has jumped 15.9% in 12 months’ time. It currently carries a Zacks Rank #2.
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