Paysafe to purchase iPayment
US-based Paysafe will acquire iPayment Holdings, a provider of processing solutions for SMEs, as it seeks expansion in North America.
Via the deal, Paysafe will get access to 137,000 SME customers. Financial details were not disclosed.
Joel Leonoff, Paysafe’s president and CEO, says the acquisition is “part of our long-term investment strategy to grow our business in North America and builds on our other successful acquisitions over the past couple of years”.
In August 2017, Paysafe bought SME payments provider, Merchant Choice Payment Solutions (MCPS). Paysafe’s goal is to establish itself as a “top five non-bank payment processor in the US”.
iPayment had annual processing volumes of over $28 billion in 2017 and operates both direct and indirect sales channels. It employs over 450 employees across its four US offices located in Boston, Massachusetts; Westlake Village and Camarillo, California; and Minden, Nevada. Paysafe doesn’t say what will happen to these people.
However, Todd Linden, CEO of Paysafe’s payment processing division in North America, will lead the merged payment processing organisation at completion. Linden brings over 30 years of industry experience and was previously CEO of MCPS.
OB Rawls IV, CEO and president, iPayment, along with the CFO, Robert Purcell, will both remain with the organisation at completion as part of Paysafe’s leadership team.
According to Paysafe, the integration of these two firms will bring merchants, partners, consumers and platforms “more product choice” via a platform which includes point of sale (POS) solutions, order ahead purchases, and online products such as Paysafe’s prepaid solution, Paysafecard.
The acquisition is expected to complete in Q2 2018, pending final regulatory approvals. Until then, the two groups will continue to operate as independent organisations.
Paysafe has over 20 years of online experience. It says it has a combined transactional volume of $56 billion in 2017 and over 2,600 staff located in 12 global locations.
What’s the big idea?
Looking at the bigger picture, this deal also follows on from August 2017, when Paysafe reached an agreement to be acquired for $3.89 billion by private equity firms Blackstone and CVC Capital Partners. That massive deal came at a time of significant consolidation in the payments space and several years of considerable investment activity in fintech firms with a payments focus.
(Blackstone is an acquisitive firm. In January, it bought a 55% majority stake in Thomson Reuters’ financial and risk [F&R] business for around $17 billion.)
Paysafe will have competition of course.
Last year, Worldpay agreed to merge with US credit card processor Vantiv in a $10 billion deal. The deal was completed in January this year.