Lloyds Cardnet, the bank’s merchant services joint venture with Fiserv, returned to growth in 2025 although the recovery came at a price. Volume grew for the first time since 2020, cashflow was strong and the business was able to pay a dividend to its parents. But income per transaction fell sharply.
Cardnet is owned 51% by Lloyds and 49% by Fiserv and mainly serves the bank’s business customers in the UK. The P&L is almost pure merchant acquiring. Technical costs are recharged to Fiserv which processes the transactions and provides gateway, terminals and Clover ePOS. People, sales and marketing costs are recharged to the bank.
Following four years of declines, total processed volume rose 10% in 2025 to £57bn but sits well below the £66bn recorded in 2021. Management points to wins in food, drink, entertainment, retail and travel. Total transactions were up 18% but there is a long way to go to recover Cardnet’s previous position. Recent wins in the travel sector, notably Ryanair, should certainly help. So should new partnership deals with PayPoint and EPOS Now. However, Lloyds Bank’s new tie-up with Stripe for small business products suggests that the Cardnet JV may increasingly focus on enterprise merchants.
Cardnet splits out debit and credit processing. Debit has caused most of the pain in recent years. Despite growing 9% in 2025 to £41bn, debit volumes are well below the peak of £54bn in 2021. In contrast, credit has performed much better and reached a record level of £16.5bn in 2025.
Average transaction value fell 6% to £54. This explains why 18% transaction growth only delivered 10% volume growth.
Despite the higher processed volumes, net fee and commission income grew just 2% to £54m. Cardnet’s unit margins continue to be squeezed, possibly by the addition of volume from large enterprise clients. Net fee income per transaction fell 13% to 5.1p.
Margins were boosted by much improved settlement-related interest income which doubled to £6m. The bottom line was also helped by much lower fraud provisions which fell from £3.5m to £1.7m.
Good cost control saw total expenses falling 10% to £36m. This includes £17.8m recharged to Lloyds for salary and related costs, down 3% on the previous year and £11.5m towards Cardnet’s “strategic investment programme.” Fiserv received £15.4m, roughly in line with previous years.
Profit before tax was up 51% to £23.7m. Having missed a payment in 2024, the JV was able to pay a dividend of £31m to its parents.
Cardnet is winning again. Volumes and transactions have returned to growth and there have been significant merchant wins. But it’s earning less from that activity: a very healthy 18% increase in transactions yielded just 2% more net fee income. Yet, profits rose strongly in 2025 as interest income, lower costs and lower fraud losses compensated for weaker acquiring economics.
