The long running on and off talks between payments specialists Indue and Australian Settlements Limited may finally be reaching a culmination.  For many years Banking Day has heard rumours that this pair were exploring the merit in amalgamating their businesses.  Both have a history in serving the mutual banking sector; building societies in the case of ASL, and credit unions in the case of Indue. Mutual banks and credit unions remain a cornerstone of the customer base of each company, with both also attracting fintechs as clients recently.  Attrition in the historic customer list of Australian Settlements may be the impetus for the ASL board to tie the knot with Indue. Bank of us and The Mutual Bank are two recent defectors, with both switching their business to Indue. On the Indue side, the dialling down of the cashless welfare card by the Labor government is removing one of its profit drivers. Both are (and long have been) in fierce competition with Cuscal, the largest and most successful of the specialist payments providers in Australia.  Cuscal’s momentum towards an initial public offer and ASX listing (including plans for a hefty capital raising via the IPO) over the next year may be another factor propelling a merger. Combined, Indue and ASL would have around A$1.3 billion in assets and $80 million in net assets.  Like every merger discussion in the mutual banking sector, culture and governance issues (and, recently, legal disputes between them) have inhibited any merger of this pair in the past.  As independent entities, both Indue and ASL will be wondering whether they can compete and survive in the long run.   Alternatively, might a Cuscal-led three way rollup be in the works in the long run?