Less than a month after acquiring social networking gift card provider GroupCard, InComm Inc. May 27 again added to its business with the purchase of Coinstar Inc.’s electronic payment services.
The $40 million acquisition comes with Coinstar’s prepaid portfolio, which includes some 400 individual prepaid card products from more than 65 different issuers. The prepaid segment includes Visa- and MasterCard-branded reloadable prepaid debit cards, closed-loop gift cards for retailers such as Amazon.com, and long-distance calling cards.
The deal did not include Coinstar’s self-service coin-counting machines or its Redbox self-service DVD-rental kiosks.
InComm’s retail distribution network now will include 220,000 locations worldwide, up from 145,000 at the end of last year, according to Scott Meyerhoff, InComm chief financial officer. The Atlanta-based company also acquired Coinstar’s presence in the United Kingdom, which includes locations at retailers such as supermarket chain J. Sainsbury PLC.
“This [acquisition] allows us to add offerings that will contribute to the depth of our products,” Meyerhoff tells PaymentsSource.
InComm’s acquisition, while not a massive one considering the cost, is significant because it speaks to the consolidation happening in the prepaid card-distribution space, according to Gwenn Bézard, co-founder and research director at Aite Group.
Coinstar was behind InComm and Blackhawk Network in terms of prepaid distribution, according to Bézard. “It’s clearly a win for InComm and a loss for Blackhawk” in terms of adding distribution, he adds.
Blackhawk did not respond to a request for comment about the deal.
InComm recently acquired GroupCard, a social networking gift card provider. It also has added QPay Inc., which provides payment-processing systems that enable carriers to collect in-person payments for wireless services. InComm in March also purchased Zeevex Inc., which provides virtual gaming prepaid cards.
InComm will continue to monitor the market, but the company does not have any particular holes to fill in its business, Meyerhoff says. “We need to be disciplined” in further acquisitions, he adds.
As part of the Coinstar acquisition, InComm inherits those employees who work for the division, Meyerhoff says. “We’re happy to add a strong employee base to our company,” he says, unable to say how many Coinstar employees the company inherits.