It's been a tough time to be a mobile point of sale company, but SumUp believes it's found the right formula to not only get through the shakeout but to thrive.

The London-based SumUp, which specializes in selling mobile card acceptance to micro merchants, has done some literal acquiring, agreeing to merge with Payleven, another London-based company that offers the same product mix.

Payleven is a natural fit that positions SumUp as the main micro merchant mobile point of sale company in Europe, said Daniel Klein, the CEO of SumUp.

"No company in the micro merchant space has figured out how to do this profitably," Klein said. "Together we deliver these services more efficiently."

Terms of the transaction, which was announced Wednesday, were not disclosed. Technically the deal is a merger, though SumUp appears to be directing the combined company's strategy. Klein will remain CEO of the combined company, which will be called SumUp. Combining Payleven and SumUp will create a  company that totals one million customers in 15 countries.

Offering hardware, software and processing allows SumUp to serve micro merchants economically, giving the company access to a niche that banks and other payment companies mostly ignore to instead focus on larger merchants, Klein said.

"We don't lose any money [to other vendors] on our sales," Klein said, adding its internal development focus also contains costs for chip card payments and allows its fees to generally fall below 2% per transaction, which is less than most other mobile point of sale companies. The combination of SumUp and Payleven will also enable the new company to approach financial institutions as a merchant acquiring services vendor.

"We are a defacto hardware and software and merchant acquiring business," Klein said. "It took us a long time to figure out a lot of the little details, very early on with our hardware and design. We didn't know the hardware and design would be that big a part of serving the market, but we didn't want to be hands-off on the supply and just do payments."

SumUp and Payleven are picking up financial scale as well. Payleven just raised about $10 million to bring its total funding to about $25 million, and its investors include Rocket Internet, BBVA, Groupon and others. Groupon and BBVA also back SumUp, which has reportedly raised more than $45 million, though the companies do not release valuations.

The combined company hopes to expand in Europe and in other markets, such as Latin America and the U.S., Klein said, estimating there are still tens of millions of small merchants globally that don't use mobile point of sale hardware.

Other companies in the space have suffered, portending a pruning of the mobile point of sale market despite the sizable addressable merchant base.

"Many industry observers wondered if the market would be big enough to support all of the startups that emerged after Square, and have been suggesting that consolidation was inevitable at some point," said Zil Bareisis, a senior analyst at Celent. "The industry has seen some casualties already, form Verifone withdrawing Sail soon after it launched to more recent troubles at Powa. I would expect to see more similar deals in the future."

Thompson Investments purchased certain assets from Powa earlier this year after the London-based mobile point of sale company ran out of money. SuperCom, an Israeli-based technology company, this week announced it had purchased other parts of Powa.

In the U.S., the most recognizable mobile point of sale company, Square, has faced the failing of its Starbucks partnership, and an IPO that was smaller than expected. Square also in the past year discontinued is customer-facing Order app and has made a gradual retreat from other consumer focused products.

These developments suggest the market has adjusted, Klein contends. “We’ve already had the consolidation,” he said.

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