Payments Industry Saw Heavy M&A in 2014
Mergers and acquisitions among payments companies rose 44% in 2014 compared to the year before.
Four of the five largest financial technology deals last year occurred in the payments sector, according to Berkery Noyes' 2014 financial technology mergers and acquisition report. Overall, there were 137 transactions in the payments industry, compared to 95 in 2013, making it the financial sector with the largest rise in volume.
Berkery Noyes, a New York-based independent mid-market investment bank, analyzes the acquisition activity year-to-year of technology companies in payments, as well as capital markets, banking, insurance and other related financial services.
The industry's highest-value transaction was Bain Capital, Advent International, and ATP Private Equity Partners' acquisition of Nets Holding A/S, a provider of payments, information, and digital identity solutions, for $3.14 billion, the report said.
Regarding the mobile payments subsector, the largest deal in 2014 was Intuit's acquisition of Check (now called Mint Bills) for $360 million.
"Big corporations tend to wait for one or two smaller companies to compete with similar payments technologies, then focus on the one that survives as a company to approach for a potential acquisition," John Guzzo, managing director at Berkery Noyes, stated in a press release.
In other instances, a company may be wiser to concentrate on its own core competencies and lease good technology, Guzzo added.
"Payments companies may also be on the lookout for acquisition targets that provide compliance or security for card-not-present transactions, particularly as the U.S. shifts to EMV cards at the physical point of sale," Guzzo said.
Companies that provide technology to identify shoppers on the phone or online will be part of a growing area in payments, Guzzo said.