PayPal Makes In-Store Gains with Paydiant Acquisition (March 2, 2015)
PayPal took a big step forward in expanding its in-store payments presence today, announcing plans to acquire Paydiant, an Auburndale, Mass.-based mobile payments technology company. Paydiant provides a cloud-based, white-label mobile payment and offer-redemption platform for retailers, banks and payment processors, including SUBWAY, MCX and PULSE.
Larry Berlin, vice president of private equity firm First Analysis, tells Paybefore the move is great for PayPal because it’ll help the company gain market share at the in-store POS through Paydiant’s relationships. “Adding to its in-store market presence with this acquisition should add to growth and revenue, which PayPal certainly wants as it spins off from eBay,” he notes. “Meanwhile, PayPal has a huge sales force, which should help Paydiant gain more merchant acceptance.” Another benefit is that Paydiant’s technology is software-based and doesn’t require merchants to purchase new hardware, Berlin says.
The combined companies will help merchant partners create their own branded wallets to accelerate mobile-in-store payments and drive consumer engagement through mobile payments, loyalty, offers and the prioritization of preferred payment types, such as store branded credit cards and gift cards, PayPal President and CEO designee Dan Schulman wrote in PayPal’s official blog. “Similar to PayPal, Paydiant’s technology-agnostic approach means that merchants can use any mobile payment technology—QR codes or NFC—that best suits their business,” he wrote.
PayPal didn’t confirm the purchase price, but multiple reports estimate it at around $280 million, a fraction of the $800 million PayPal paid for e-commerce processor Braintree in 2013.
The deal, which is expected to close in late March or April, is the latest sign that the mobile payments market is developing, according to Berlin, who anticipates more consolidation and a few big players rather than dozens of small ones. Last week Google confirmed its acquisition of Softcard technology and intellectual property, and on Feb. 19 Samsung acquired mobile payments technology firm LoopPay.
In a separate announcement at Mobile World Congress in Barcelona, PayPal said its new NFC-enabled PayPal Here Chip and PIN card reader will begin rolling out in the U.K. and Australia this summer; and in the U.S. later this year.
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