3 Notable M&A Deals in Payments

Two of the biggest M&A deals in fintech history occurred in the past three months: Fiserv Inc's $22 billion purchase of First Data Corporation and Fidelity National Information Services's acquisition of Worldpay for $34 billion. While no such mega-deal has occurred so far in April, the last two weeks have already witnessed a plethora of smaller, yet significant fintech deals, particularly in the payments space. Here are three deals that caught the attention of Bank Innovation editorial: Mastercard's purchase of point-of-sale financing company Vyze: Mastercard announced on Tuesday plans to acquire point-of-sale (POS) lending platform Vyze for an undisclosed amount. The purchase gives the credit card giant a key place in the POS financing space, which, in the U.S. alone, is a $1.8 trillion market, according to an Accenture report. “Both consumers and businesses want the best choice and service, exactly when they need it,” said Blake Rosenthal, executive vice president of global acceptance at Mastercard, in Tuesday's statement. “Vyze adds to our ability to empower banks and other lending partners to participate in the growing trend of retail financing." Customer checkout experience is becoming an increasingly important service for payment companies and merchants alike. Thanks to retailers like Amazon , Walmart and Starbucks , checkout speed, frictionless payments and alternate payment options have become key contributors to the overall customer satisfaction with a particular brand (for both retailer and FI). Of course, Mastercard is not the first to recognize the opportunity in POS financing market. In fact, PayPal co-founder Max Levchin founded Affirm , one of the first POS lending platforms, in 2012. Other players in this place include PayPal and Citizens Financial Group , which is a POS lender for iPhones at Apple stores. Stripe acquires biometric authentication company TouchTech in preparation for Europe's PSD2 requirements Payments infrastructure company Stripe on Wednesday announced its acquisition of Dublin-based Touchtech Payments , a software company that provides advanced Strong Customer Authentication (SCA) technology to fintechs in Europe. The acquisition is Stripe's way of preparing for PSD2 's strict Strong Customer Authentication (SCA) requirement that will go into effect this September. According to a post on Stripe's blog , starting Sept. 14, European customers will be required to confirm their identity for online purchases costing €30 or more, by using two of the following authentication methods: something they know, like a password; something they possess, like a phone; and/or a type of biometric authentication, like fingerprint or facial ID. Also see: What You Should Know about Europe’s Big Payments Regulation PSD2 Based in Dublin, Ireland, Touchtech Payments provides the technology to facilitate this technology. The fintech currently works with players like challenger bank N26 and payments company Transferwise. On the acquisition, Will Gaybrick, Stripe’s Chief Product Officer, said in a statement on Wednesday: On the modern internet, payments should be everything you’d expect: easy, secure, and fully compliant with the latest regulations. Unfortunately, these three attributes are often at odds with one another, making it nearly impossible for an individual business to keep pace with regulatory changes and build a great payments product experience for their customers. Touchtech adds yet another layer to the economic infrastructure Stripe is building for the internet, which is designed to help businesses comply not only with SCA but also with the entire next generation of regional payment regulations.” Terms of the transaction were not disclosed. PayU inks deal with payments security provider Wibmo In another payments security-related deal, PayU , the fintech arm of multinational internet and media group Naspers , acquired payments security company, Wibmo, for $70 million last week. The California-based Wibmo is a payments-focused security platform that integrates with banks and other FIs to offer authentication and risk-based decisioning on mobile and online payment transactions. The company already operates in 20 countries across the globe, including India, a core PayU market. In India, the two companies will also work on providing customers POS credit as well as other payment solutions. Aakash Moondhra, CFO, PayU Global, said in the announcement: Through the acquisition of Wibmo, our endeavor is to positively impact and add value to the entire ecosystem including banks, consumers and merchants, with the combined service offerings of PayU and Wibmo. We will partner with leading banks to enable digital banking, merchants will gain with higher conversions rates and increased sales, and consumers will have a frictionless experience in completing digital payments transactions. It is worth an honorable mention that Irish bank AIB and First Data today announced the acquisition of Irish consumer payment network Payzone for an enterprise value of about $130 million (€100 million).

3 Notable M&A Deals in Payments

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