Heartland Payment Systems' payroll business got a shot in the arm when the company purchased Ovation Payroll at the end of December, and the payment processor's mobile commerce business stands to also get much bigger because of the acquisition.
Many processors are looking to get a better grasp of mobile technology, and Princeton, N.J.-based Heartland is no different, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.
"Processors don't want to go into a world where mobile payments add a lot of value to consumers and retailers, and they don't participate in that," Luria says. "I do think that adding mobile technology may be part of the reason Heartland bought Ovation."
In this way, Heartland's move echoes that of processor Total System Services Inc., which last month closed its purchase of ProPay. That deal gave TSYS a mobile-pay product, the ProPay Jak card reader, in addition to ProPay's conventional services.
Heartland's Ovation acquisition indicates a desire to advance mobile payroll and payment applications.
"Currently, about 50 percent of our existing 13,000 payroll clients are also serviced by Heartland for their merchant card processing," says Heartland spokesman Michael LaCosta. "We intend to grow the products we provide to merchants including not only card processing and payroll, but also our PCI secure network solution called Smartlink, our gift/loyalty program and other products and services."
When Heartland adds Ovation's 10,000 clients to its database, it will also bring in Ovation mobile applications that operate on Apple and Android devices, LaCosta says.
"This acquisition will accelerate our ability to add Ovation's ePayroll Portal app to the existing Heartland PlusOne and PlusTeam products," LaCosta says.
Ultimately, Heartland plans to add several advanced Ovation features to its own payroll offerings, he adds.
The ePayroll app currently is available to employees of companies that use Ovation Payroll technology. Employees sign in with a user name and password to view pay history, paycheck information, pay stubs in PDF formats, or view W-2 or 1099 information for the current and prior years.
The ePayroll portal uses industry-standard secure socket layer technology to keep the employee information secure as it travels from the Internet to a mobile device, LaCosta adds.
"We view payroll and merchant services as core business services that can be bundled to offer even greater value for merchants, not just in lower costs but also from a service standpoint," LaCosta says.
Heartland operates its own payroll for all employees in 50 states, and approximately 2,800 employees on the PlusTeam payroll system, LaCosta says. This shows that even though Heartland and Ovation systems serve small to midsize businesses, the companies are capable of developing larger applications, he says.