Enabling Technologies

The 15 Biggest Acquisitions in the Payments Industry Between Jan. 2015 & Oct. 2015

The payments industry has continued to witness massive acquisitions in 2015, repeating the trend from last year. The fast-growing payments industry is attracting many players too because of the opportunity it provides. Payments companies see acquisitions as a strategy to acquire technical know-how and also as a faster alternative to establishing R&D teams and building new products from the scratch.

Many payment companies have focused on acquiring technology providers; this shows a strong interest in providing technology-based services to customers. Payment companies are focusing on digital technologies such as mobile payments, cloud-based services, biometric authentication and other modern methods meet the expectations of the digital generation.

PayPal Acquires Xoom:

PayPal, Inc. and Xoom Corporation announced a definitive agreement under which PayPal will acquire Xoom for $25 per share in cash or an approximate $890 million enterprise value. Upon closing of the acquisition, Xoom will operate as a separate service within PayPal. The acquisition is expected to close in the fourth quarter of 2015 and is subject to customary closing conditions, including Xoom stockholder approval, the expiration or early termination of the applicable pre-merger waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the receipt of certain consents relating to Xoom’s money transmitter licenses.

Samsung Electronics Acquires LoopPay:

Samsung acquired LoopPay in February this year. LoopPay is an acclaimed mobile wallet solutions provider that turns existing magnetic stripe readers into secure, contactless receivers with the actual magic on the device side. LoopPay’s technology (MST in the devices) has the potential to work with approximately 90% or more existing point-of-sale (POS) terminals, with no investment in new infrastructure required by merchants. Samsung Pay will use MST tech as a weapon in the ongoing wallet wars when it launches in the US later this year. According to Re/code, the deal was reported to be worth $250 million.

Prosper Marketplace Acquires BillGuard:

Prosper Marketplace announced that it has signed a definitive agreement to acquire BillGuard, the personal finance tracking application that enables users to protect & control credit and identity in real-time from their mobile devices.

The acquisition combines one of the largest and fastest-growing personal finance apps with Prosper’s expertise in crowd-powered lending. The duo will focus on an integration which stems from BillGuard’s founding mission, to empower consumers to control, protect, and now with Prosper, introduce new opportunities to do more with their money. Both companies share similar values including a commitment to connecting users on a social level and empowering them to be financially secure, smart and successful.

FIS Acquires SunGard:

FIS, one of the world’s largest providers of banking and payments technology solutions has signed an agreement to acquire SunGard. The deal is expected to close in the fourth quarter of 2015. As per the terms of the agreement, FIS will acquire 100% of SunGard’s equity. FIS will acquire the company in a cash and stock transaction valuing the company at an unaffected enterprise value of $9.1 billion, including the assumption of SunGard’s debt which FIS expects to refinance. The combined company will have over $9.2 billion in annual revenues. Post-acquisition, FIS will be uniquely positioned to offer a broad range of enterprise banking and capital markets capabilities to empower financial institutions and businesses worldwide.

Envestnet to Acquire Yodlee:

Envestnet, Inc., a leading provider of unified wealth management technology and services to financial advisors, and Yodlee, Inc., a provider of personal-finance apps to 11 of the country’s top 20 banks by assets, announced that the boards of directors of both companies have unanimously approved a definitive agreement under which Envestnet will acquire all of the shares of Yodlee in a cash and stock transaction valued at $18.88 per share (or approximately $660 million) on a fully-diluted equity value basis. After incorporating cash and cash equivalents of $70 million, the transaction reflects a value of about $590 million. The deal is expected to close in the fourth quarter of 2015 or the first quarter of 2016.

D+H Acquires Fundtech:

D+H Corporation has entered into a definitive agreement worth US$1.25 billion to acquire Fundtech, a leading provider of global payments solutions to banks worldwide. Fundtech is a leading provider of financial technology to banks and corporations of all sizes in the Americas, EMEA and APAC regions. Fundtech has approximately 1,200 clients, including global money center banks, mid-sized banks and credit unions, nonbank financial institutions, central banks and corporations.

Visa Acquires TrialPay:

Visa partnered with TrialPay, a leading payments technology company that was founded in 2006 and now reaches over 500 million users across 20,000 merchants in 180 countries. With TrialPay, Visa will be able to target consumers based on their transaction histories and present them with specific promotions. These promotions will be similar to incentives; the customer will be provided with the option to purchase a desired product or service to receive an additional bonus product or service as a result.

PayPal Acquires Paydiant:

Paydiant is a 2010-born, Boston-bred mobile, cloud-based payments platform. Paydiant is the back-end of the technology that offers sellers (retailers) their own personal mobile payment options under their own brands and also within their own applications. This allows merchants to be in control of and offer their own wallet & payment options. Reportedly, the deal was worth $280 million. With Paydiant, PayPal expects to provide a stronger payments service for their existing online and new in-store customers.

MasterCard Acquires Applied Predictive Technologies (APT):

Cloud-based analytics and big data company Applied Predictive Technologies (APT) was acquired by MasterCard for $600 million. In February 2015, MasterCard announced $20 million in funds specifically allocated to boosting its cybersecurity technology. Plans to launch a biometric authentication and verification service are already in the works. This move can be seen as part of MasterCard’s plan to expand its technological reach. The recent acquisition will benefit both MasterCard and APT. MasterCard plans to utilize APT’s Test & Learn platform and other services in combination with its own analytics expertise to provide customers with enhanced decision-making capabilities.

Square Acquires Kili Technology:

Square acquired Kili Technology, a company that has developed silicon, electronics & software to simplify and optimize payment processing. Square is looking at this acquisition to aid in delivering simple and affordable hardware that gives sellers a smarter and safer way to do business. Kili has been known for its low-cost, solution-on-a-chip software for accepting contactless payments while acting as a mobile point-of-sale system.

Global Payments Acquires Realex Payments:

Global Payments Inc., a leading worldwide provider of payment technology services, has announced the purchase of Realex Payments, one of Europe’s largest and fastest growing payment gateways. Realex provides a range of technology services for businesses selling online. This acquisition furthers Global Payments’ strategy to provide omnichannel solutions that combine gateway services, payment service provisioning and merchant acquiring across Europe. Under the terms of the agreement, the transaction was valued at €115 million ($125 million).

Capital One Acquires Level Money:

Capital One has acquired the San Francisco-based startup which developed the money management app Level Money. Since its inception in October 2013, the app has been downloaded over 700,000 times. Level Money has helped users manage over $12 billion in transactions. The app has helped people make smarter spending decisions, simplify their financial lives, get out of debt and reduce financial stress.

BBVA Acquires Spring Studio:

BBVA has acquired Spring Studio for its digital banking initiatives. Acquisitions are a part of the overall strategy of BBVA to lead the technology-driven transformation of the financial services industry. Last year, BBVA acquired US digital banking service pioneer Simple and Madiva Soluciones, a Spanish big data startup.

Northwestern Mutual Acquires LearnVest:

Northwestern Mutual acquired LearnVest, a leading player in online financial planning and client experience technology. This partnership brings together the best of what each company offers – Northwestern Mutual’s world-class financial professionals and best-in-class products, combined with LearnVest’s breakthrough technology and innovative financial planning platform. The New York-based startup was acquired for over $250 million, according to Fortune.

Velocity Acquires Cover Inc.:

London-based startup Velocity Mobile LTD. has acquired US company Cover Inc. With Velocity seeking global expansion in major markets like Asia and Europe, the acquisition of Cover will add an established network of restaurant venues in the most coveted US cities. Over 350 restaurants in New York City, San Francisco and Los Angeles will now be part of Velocity’s global hospitality platform, making it the largest restaurant mobile payments company in the world.

Priti Thakur

Priti has keen interest in digital money and fintech startups . She completed her B-School education this year and likes to write about innovation with respect to digital payments.

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