BM Technologies in Radnor, Pa., is set to start transferring higher education customer deposits to First Carolina Bank in Rocky Mount, N.C.
The technology company said in a press release that it expects to complete the transferal of customer deposits by Dec. 1. First Carolina has said it expects to gain $525 million of deposits from the partnership.
BM Technologies, by moving the deposits to a bank that is exempt from the Durbin Amendment’s cap on interchange fees, should benefit from a 20-basis-point increase in interchange fees it earns from higher education vertical spend.
Higher education vertical spend over the 12-month period that ended Sept. 30 was $2.2 billion. BM Technologies said interchange revenue in its higher education business in the second and third quarters would have been 50% higher on a gross basis if the First Carolina deal had been in place.
The transfers are “a critical milestone in significantly improving the company’s operating revenues and profitability,” Luvleen Sidhu, BM Technologies’ chairman and CEO, said in the release.
Overall, the company lost $4 million in the third quarter.