Citigroup is Starting a Payments Unit

Citigroup's new payments solution will help it compete with companies like Stripe and Paypal.

Citigroup is launching a new payments unit that will offer merchants consumer payment options such as credit cards, digital wallets, and direct bank account transfers.

Citigroup is reportedly partnering with payments firms including Mastercard for the new offering. Mastercard will provide some of the back-end connections and processing for merchants, The Wall Street Journal reports.

"Our mission is to power frictionless payment acceptance with nimble technology. We want to extend our leadership beyond the B2B payment space by developing capabilities to enable institutions to collect from consumers in a globally consistent and seamless fashion," said Naveed Sultan, Global Head of Citi's Treasury and Trade Solutions said in a prepared statement.

With the move, Citi says that institutions will be able to gain more visibility into the end-to-end transaction lifecycle, which will allow them to focus on their traditional business operations and growth. It says that consumers will benefit from payment ubiquity through a localized payment experience.

"Every institution wants to focus their time on providing their customers with the best experience or the best product. Our trusted technology helps them do just that. We are excited to work with Citi and their leading transaction services business,” Michael Miebach, Chief Product Officer, Mastercard said in Citi’s press release. “As they integrate Mastercard Payment Gateway Services, they're making the whole process simpler for Citi's institutional clients to accept payments from anywhere in the world and continue growing their businesses."

The move is expected to allow Citigroup to better compete with companies such as PayPal and Stripe, which are typically preferred by some internet companies.