Why Payments M&A Activity Is Hot

By Robert P. Zinn, K&L Gates LLP

zinn_robertWith the holiday season upon us, it’s not too early to declare 2014 a year of exceptional growth in financing for payments companies, as well as M&A activity that reflects consolidation. We see no reason to think this trend will abate anytime soon.

“2015 will be another year of incredible innovation in the payments industry, with M&A activity a critical part of the process,” according to Anil D. Aggarwal, chairman of Money20/20. “It continues to be an exciting time of widespread and fundamental change.”

Strategic acquirers strive for value creation by buying payments businesses complementary to their existing core competencies or that provide new revenue opportunities or solutions. Acquirers crave more efficient and secure payment platforms, and new and existing products that give consumers worldwide better ways to access their money and manage financial obligations.

The constellation of payments industry participants mirror three fundamental and intersecting trends driving an economy increasingly belonging to millennials: innovation, globalization and regulation. The enormous potential of a multidimensional payments industry challenges all of us to yoke creativity to commerce, and to adapt to—and capitalize on—rapidly changing business models, regulatory regimes and consumer desires, as well as competing and conflicting industry forces. That this inevitably will yield many failed experiments and some incredible successes is precisely what fuels the explosive growth in deal-making we’re now witnessing.

Robert P. Zinn is practice area leader of the global corporate practice at K&L Gates, one of the world’s largest law firms, with offices across five continents. He recently was named one of Global M&A Network’s Top 50 North American M&A Lawyers, part of the Top 50 Americas Dealmakers List. He can be reached at robert.zinn@klgates.com.

Snapshot of Payments M&A in Paybefore

 

On the Wire: Gift Card Impressions Announces New Interactive Display Capabilities

Press Release

Kansas City, Mo. – Nov. 25, 2014 – Gift Card Impressions, the leading provider of gift card packaging and personalization solutions within the $118 billion gift card industry, announces three new modules to enhance their interactive display solutions.

The new modules will assist consumers in selecting the right gift card based on data about their intended recipients, allow retailers to offer digital gift cards via a self-serve transaction in-store through a connection with their distributor or processor, and equip brands and retailers with a turnkey promotional platform to drive consumer loyalty and engagement.

“As we continue to evolve our interactive display capabilities to meet consumer demand, we are pleased to launch our Gift Selection, Digital Gift Card and Loyalty Promotions capabilities,” said Brett Glass, President and CEO of Gift Card Impressions. “Our latest offerings are in direct response to evolving consumer needs in the gift card category and we look forward to seeing an improved gift card experience in major retailers as this technology is deployed.”

The three new modules enhance the existing capability of GCI’s Interactive Displays which provide device specific messaging, transact many types of stored value though integrations with gift card distributors and processors, and allow consumers to register for loyalty programs.

For more information on GCI Interactive Displays, contact Scott Wall, SVP Sales, at scottwall@giftcardimpressions.com.

About Gift Card Impressions 
Gift Card Impressions is a Kansas City based company focused on innovative gift packaging solutions, state-of-the art digital personalization content systems and Interactive Display devices. Clients of Gift Card Impressions include most major retailers and most major gift card brands. The company provides industry-leading solutions for both physical and digital gift cards and other adjacent gifting categories. The company has been awarded 39 patents with an additional 75 patents pending. Visit Gift Card Impressions online at http://giftcardimpressions.com.

On the Wire: TSYS and linked2pay Offer Omni Payments for Merchants

Press Release

Cloud-based service provides a single solution for credit card and ACH payments acceptance

Columbus, Ga., Nov. 20, 2014 — TSYS (NYSE: TSS) announced today an agreement with linked2pay to offer TSYS merchants and its partners a feature-packed omni payments solution with more ways to accept payments.

linked2pay allows customers to pay online or by mobile phone using a credit card or ACH with equal ease. Additionally, with linked2pay, merchants may provide their customers other ways to pay to include: mobile, online forms, email, a virtual terminal and a shopping cart checkout.

A cloud-based technology, linked2pay gives merchants access to a secure, single-point login with feature-rich payment acceptance that can be branded. Merchants also gain the convenience and efficiency of consolidated, customizable reporting.

“Large and small merchants across a variety of industries can deploy this payment option easily and quickly,” said Chris McNulty, group executive of Sales, Business Development, & Client Relations, TSYS Merchant Solutions. “By bringing credit cards and ACH together seamlessly, our merchants can lower costs and decrease the number of paper checks they accept.”

Software providers and resellers can leverage the linked2pay solution at no additional cost, and access the tools they need to deliver the type of payments processing automation suitable for high volume users.

“A merchant using linked2pay gains the benefit of accepting payments using mobile, online form, email, checkout or virtual terminal all in the same, highly flexible solution,” said Jay McShirley, chief executive officer, linked2pay. “With linked2pay, a merchant is ready to accept payments immediately following registration, and the integration tools we provide to achieve process and reporting automation minimize efforts on any IT-related project.”

More information about linked2pay is available at tsys.linked2pay.com.

About linked2pay

linked2pay® provides services to deliver check, ACH, EBT and credit card payments automation. The company provides payment processing solutions for clients, banks, and channel partners. The linked2pay platform is PCI compliant and the Company has completed audits based on the internationally recognized standard developed by the American Institute of Certified Public Accountants (AICPA). The Company launched the first On-Demand check processing platform in 2002. linked2pay won the 2014 Gold Medal for Best Innovation Via ACH at The Innovation Project Awards, powered by PYMNTS.com. Visit www.linked2pay.com for more information.

About TSYS

At TSYS® (NYSE: TSS), we believe payments should revolve around people, not the other way around. We call this belief “People-Centered Payments®.” By putting people at the center of every decision we make, TSYS supports financial institutions, businesses and governments in more than 80 countries. Through NetSpend®, A TSYS Company, we empower consumers with the convenience, security, and freedom to be self-banked. TSYS offers issuer services and merchant payment acceptance for credit, debit, prepaid, healthcare and business solutions.

TSYS’ headquarters are located in Columbus, Ga., U.S.A., with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS is a member of The Civic 50 and was named one of the 2013 World’s Most Ethical Companies by Ethisphere magazine. TSYS routinely posts all important information on its website. For more, please visit us at www.tsys.com.

On the Wire: The SHAZAM Network Brand Evolves to Better Reflect Diversified Products

Press Release

DES MOINES, Iowa (November 21, 2014) — As part of a multi-stage brand integration strategy, the SHAZAM Network today announced the retirement of the Cardinal Software logo. While the Cardinal Software name will change to SHAZAM Core Services, no changes to the Cardinal products, which include Cardinal Core and Cardinal Connect, or to the staff who support them are planned.

In addition, SHAZAM’s marketing department has unveiled a new company tagline — Delivering Unlimited Possibilities.

“This brand integration more effectively positions the SHAZAM Network for growth,” said Paul Waltz, SHAZAM president and COO. “Although many understand SHAZAM is more than a debit network, we have an opportunity to better communicate the choice, flexibility and diversified value we provide to our members and participants.”

Debit processing was the primary business for SHAZAM when it was founded nearly 40 years ago. Over time, the network has evolved to offer several different products and services, including ACH, ATM, core processing, marketing, merchant services, fraud management and mobile technology with products like SHAZAM BOLT$. The 2010 acquisition of Cardinal Software was a strategic decision to support the company’s expanding value proposition.

SHAZAM’s core services continue to expand and gain new acquisitions. New core and platform services have been developed and based on feedback from clients, Loans and New Accounts product enhancements will soon allow increased integration with Compass XD. “SHAZAM Core Services allows you the freedom to work with the technology of your choice,” said Jace Day, president of core services. “Our core is a highly customizable and changeable processing service offering in-house or in a data center environment with unmatched service and support.”

“SHAZAM’s new tagline, Delivering Unlimited Possibilities, speaks to our belief that as one of the last member-owned and -controlled networks, it’s our responsibility to continue offering choice and flexibility,” said Mike Hollinger, SHAZAM CEO. “Creating choice and flexibility in products and services for all community banks and credit unions is what differentiates us from our competition and allows our customers to better compete in the marketplace.”

About SHAZAM  

The SHAZAM Network was founded in 1976 and is one of the last remaining member-owned and -controlled electronic funds transfer (EFT) networks and processors in the industry. SHAZAM provides innovative services to community financial institutions throughout the United States. SHAZAM is a single-source provider of services including: debit card, core, fraud, ATM, merchant, marketing, platform, risk and more. Visit shazam.net and follow @SHAZAMNetwork.