The most significant fintech acquisitions of the year | Fintech Recap 2017

By Alex Hammond | 28 December 2017

JPMorgan Chase & Co. has announced its plan to acquire WePay

JPMorgan Chase & Co. announced its plan to acquire WePay to make it easy for business app makers and independent software vendors (ISVs) to seamlessly integrate payments into the software commonly used by small businesses.

Chase and WePay will ease payment friction for both software providers and merchants:

Software providers will be able to provide instant onboarding to small business clients no matter how they take payments—in store, online, or on-the-go, with the backing and fraud protection of Chase.

Chase and WePay will allow merchants to accept payments instantly and get paid faster so they never lose a sale.

Software platforms will be able to easily become payment facilitators or third party payment processors.

A Silicon Valley-based financial technology firm founded in 2008, WePay delivers payments-as-a-service APIs for simple onboarding and activation of payments, without impacting the user experience designed by developers.

Tandem acquires Harrods Bank

Tandem has announced that it has signed an agreement to acquire Harrods Bank. The transaction is subject to regulatory approval and all parties involved will work closely with customers and other stakeholders over the coming months to ensure a smooth ownership transition.

Under the terms of the agreement, Tandem will acquire 100% of Harrods Bank and benefit from around £80m of capital coming into the business. The financial terms have not been disclosed. On completion, the bank will operate under the Tandem brand.

The acquisition will accelerate Tandem’s launch plans to offer savings accounts to its customers, subject to regulatory approval, before the end of the year. Tandem’s app, to help customers liberate themselves from the stress of managing their money, is already available in the App and Play Stores and credit cards are set for launch in the next few months. 

BBVA buys Mexican payments start-up Openpay

BBVA’s Bancomer, the subsidiary arm of the Spanish-bank, acquired Mexico-based payments start-up Openpay to tap into its payment points across the country.

Openpay is a payment service provider that facilitates e-commerce, including on mobile and tablet devices, for both small and large businesses. The Openpay platform uses advanced tools to prevent fraud and has a network of more than 15,000 payment reception points in Mexico. The platform is used by more than 1,000 businesses in Mexico, ranging from start-ups to corporate clients.

Teppo Paavola, General Manager for New Digital Business at BBVA, says: “Openpay is one of the principal innovators in Latin America in payments. Its development platform transforms the manner in which companies can do business online. By leveraging the synergies between Openpay and BBVA Bancomer, we hope to contribute to the growth of electronic commerce." 

JPMorgan Chase acquires MCX payments technology

JPMorgan Chase announced the acquisition of payments technology company MCX, the service behind merchant-backed mobile payments CurrentX.

MCX is a QR Code-based mobile wallet with a network of America’s largest retailers, including Walmart, Shell and Phillips 66. The acquisition will lead to an integration of these companies with Chase Pay over the next year.

The motivation of the acquisition by Chase is to expand Chase Pay, the mobile and digital wallet for Chase customers. Although Chase was one of the few major banks that partnered with Apple Pay when the service first launched in 2014, the bank is seeking to grow its reach across popular retailers in the U.S with MCX.

Chase and MCX are also no strangers to one another, with the companies involved in several partnerships over the years. MCX was the premier launch partner for Chase Pay in October 2015.

“When we think about ‘fintech’, we go through a ‘build/buy/partner’ evaluation to decide how we can get to market most efficiently,” sayd Jennifer Roberts, Head of Chase Pay.

“MCX has been an important partner, and their technology complements ours, so we’re thrilled to deepen our relationships with the merchant community through the purchase of this technology,” Roberts added.

Santander acquired Banco Popular for 1Euro

Perhaps not the biggest value acquisition of the year, but significantly one of the most notable acquisition from Santander. The deal made several headlines back in June this year, when the Spanish banking group stepped in to rescue struggling rival Banco Popular Espanol.

The European Central bank said Popular was “likely to fail” due its deteriorating liquidity.

A statement issued by the ECB said: “The significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due.

“Consequently, the ECB determined that the bank was failing or likely to fail and duly informed the Single Resolution Board (SRB), which adopted a resolution scheme entailing the sale of Banco Popular Español SA to Banco Santander.”

The acquisition has now completed, and the new company now operates under Banco Santander.

Swedbank acquires PayEx: Amount undisclosed

Swedbank has announced the acquisition of PayEx. The fintech company was a privately-owned group that offers payments solutions for internet, mobile and commerce services that include billing and account management and loans.

PayEx will be a full subsidiary of Swedbank with the headquarters based in Visby, Sweden. The company was founded in 1972 by Max Hansson, and processes more than $28.2bn per year in its home markets of Sweden, Norway, Denmark and Finland.

Birgitte Bonnesen, President and CEO at Swedbank, says within PayEx there is “great competence and knowledge.”

Broadridge Financial Solutions acquires Message Automation: Amount undisclosed

Broadridge Financial Solutions announced in March that it had acquired Message Automation, a leading provider of post-trade control solutions. The company was acquired for an undisclosed amount. 

Tom Carey, President, Global Technology and Operations International, EMEA and APAC, Global Fixed Income, Broadridge Financial Solutions commented on the acquisition: “The acquisition of Message Automation extends our ability to enable firms to accurately meet their regulatory trade and transaction reporting obligations and other post-trade processing challenges. Message Automation’s solutions directly address the challenges of data fragmentation in firms and also deliver market connectivity standards. This has enabled its clients, many of which are global firms, to reduce risk and demonstrate compliance. This has been achieved through an advanced control framework, leveraging innovative technology that offers the flexibility to accommodate new regulations as they emerge and allows the reuse of existing data.

“We are very excited to broaden our overall client value proposition though this investment, which combines both best-in-class solutions and a highly talented, client-centric team with deepest domain knowledge and an outstanding reputation for technology innovation and high-quality service.”

First Data acquires CardConnect for $750m

First Data acquired payment processor CardConnect for a reported $750m. CardConnect is an innovative provider of payment processing technology, and already one of First Data’s largest distribution partners. It processes approximately $26bn of volume annually from around 67,000 merchants.

“This transaction is consistent with our strategy of integrating and scaling innovative technologies across our distribution footprint to better serve our partners and customers,” said First Data Chairman and CEO, Frank Bisignano.

“CardConnect is a long-standing First Data distribution partner and we are excited to incorporate their state-of-the-art solutions across some of our most important strategic initiatives such as partner-centric distribution, integrated payments, and enterprise payments solutions.”

AntFinancial buys MoneyGram for $1.2bn

In January, AntFinancial put forward a $880m bid for the acquisition of MoneyGram. Following a counter bid from payments company Euronet, AntFinancial increased its offer to $18 per share, totalling to $1.2bn for the US cross-border payments service.

It now appears as though AntFinancial has won the bidding-war battle with Euronet to acquire MoneyGram. Both parties anticipate the deal will be closed later this year.

“Over the past few months, we have enjoyed working closely with the MoneyGram team and remain committed to our plans to invest further in the MoneyGram business,” said Ant Financial International President Doug Feagin in a statement.

“We plan to grow the US-based team and create even greater opportunities for the MoneyGram community as we pursue our shared vision of global inclusive finance in an increasingly digital era.”

[UPDATE: 12 January 2018. Ant Financial and Moneygram failed to obtain clearance for the deal from the Committee on Foreign Investment in the United States over security concerns]

Paypal acquires TIO Networks for $233m

PayPal has acquired payment management company TIO Networks for a reported $233m. The Vancouver based processing company has around 14 million users throughout 65,000 locations, and processed over $7bn in bill payments last year.

The acquisition moves PayPal one step closer to compete with big league banks and offer greater financial services.

“Worldwide, more than two billion people do not have affordable access to basic financial services, making it difficult and expensive for consumers to carry out basic financial tasks, including bill payment. TIO’s digital platform, and physical network of agent locations make paying bills simpler, faster, and more affordable,” said PayPal CEO Dan Schulman.

“By acquiring TIO and integrating bill payment into our global payments platform, PayPal adds another key service in our efforts to become a part of a consumer’s everyday financial life.”

D+H and Misys merge in $4.8bn acquisition and form Finastra

Recognised as the fintech ‘super-merger’ of 2017, in march this year Vista Equity Partners struck an agreement to purchase Canadian financial solutions software supplier D+H for $4.8bn.

“We are thrilled by the prospect of combining these two leaders in the fintech industry,” Brian N. Sheth, Co-Founder and President of Vista Equity Partners, told the press on announcing the news.

“D+H is an outstanding company with impressive talent and deep experience providing technology solutions to financial institutions worldwide. Over the last five years we have worked closely with the Misys management team to transform and grow its global business and this is a great next step in that process. Together, Misys and D+H have the promise to shape and lead the future of financial software.”

The union of both companies has officially re-launched as Finastra, creating the third-largest fintech company in the world. Finastra has around 10,000 employees and over 9,000 customers across 130 countries, including 48 of the top 50 banks globally.

Mastercard closes acquisition of Vocalink for $920m

Mastercard has won the approval from the UK’s Competition and Markets Authority to clear the way to acquire payments systems company Vocalink for $920m. Mastercard initially announced the acquisition in July 2016, and earlier this year the bid was approved. Vocalink’s technology powers immediate payments in the world’s largest financial markets.

In the UK, Vocalink processes over 90% of salaries, more than 70% of household bills and almost all state benefits.

Worldpay agrees to $10bn acquisition by Vintav

Payments company Worldpay has confirmed a $10bn acquisition offer by card processing company Vantiv. The acquisition includes Vantiv paying $3.85m per Worldpay share, however, the final amount is subject to share prices when the deal closes.

“The board members of Worldpay and Vantiv see compelling strategic, commercial and financial rationale for combining Worldpay and Vantiv’s complementary businesses,” WorldPay noted in a statement.

“The potential merger creates a scale world class payments group in a dynamic market, with deep payments capabilities, product and vertical expertise and strong distribution channels to serve merchants around the world in the global e-commerce market, and in-store and online in the UK and US markets.”

Klarna acquires Billpay for $75m

Swedish fintech unicorn Klarna announced earlier this year that it would be acquiring BillPay, a German payments company. It is believed that the company will be paying $75m to BillPay’s previous owner, UK lender Wonga.

Sebastian Siemiatkowski, co-founder and CEO of Klarna, says Germany is “one of the largest e-commerce markets in the world”.

Klarna works with 65,000 merchants and 45 million consumers in 18 countries in Europe and North America. It has 1,500 employees.

Broadridge Acquires Morningstar's 15(c) Board Consulting Services Business JL

Broadridge Financial Solutions, Inc. has agreed to acquire Morningstar, Inc.’s 15(c) board consulting services business. The acquisition will strengthen Broadridge’s ability to be the most complete source for independent, verifiable data that mutual fund boards of directors rely on to fulfill their governance responsibilities.

“This acquisition will enhance and expand our solution set providing fund boards  the most comprehensive data, enabling them to make more informed decisions with the highest standard of reporting,” said Dan Cwenar, Broadridge’s head of buy-side data and analytics. “The expanded breadth and depth of our data-driven solutions will continue to enhance the value we provide to our investment management clients and set the standard for the financial services industry.”

SS&C Acquires Modestspark

SS&C Technologies Holdings, Inc., a global provider of financial services software and software-enabled services, today announced its acquisition of Modestspark, a leading digital service provider to financial advisors and wealth management firms. Founded in 2014 and based in Redmond, Washington, Modestspark has more than 400 current clients.

Modestspark offers client portal and client experience enrichment tools that will become deeply integrated with SS&C's portfolio accounting solutions, including Advent Portfolio Exchange and Axys. Modestspark's two employees, co-founders, Brad Demeter and Brian Bero, will join SS&C Advent and continue to support their existing clients utilizing other portfolio accounting solutions.

CREALOGIX acquires machine learning technology for data and video analytics

CREALOGIX purchases the cutting-edge artificial intelligence (AI) technology of Koemei. The solution, developed by the Swiss start-up and spin-off of the IDIAP Research Institute (affiliate of the Swiss Institute of Technology in Lausanne EPFL), enables the automated conversion of audio and video content into text data for analytics and optimisation, thanks to machine learning technology. This makes it easier to exploit multimedia content. As a result, data categories that are set to grow massively in the future and whose analysis is still largely neglected by companies today, can be used efficiently. Extensive concept search as well as usage analytics further simplify handling. With these innovative AI functions, the digital banking and digital learning specialist is complementing its existing digital product portfolio.

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