Wednesday, February 22, 2006

M&A's - Landmark Year in Payments Industry

Payments Industry M&A Report - Q4, 2005


Mergers and acquisitions continued at full speed during the fourth quarter of 2005, making 2005 a landmark year for the payments industry. Highlights of this quarter included:

* The merger of the world's two largest smart card manufacturers, Gemplus and Axalto
* U.S. third-party card processors continued international expansion efforts
* Pay By Touch Solutions serial acquisitions

The Payments Industry M&A Report - Q4 2005 provides comments and analysis on major deals announced within the fourth quarter of 2005. It also includes summary information on the payments industry related M&A deals, contact person(s) related to each deal, and an M&A activity table that summarizes the highlights of each deal. The report contains 45 pages and 3 exhibits.

More About Pay By Touch Serial Acquistions:

Following $130 million worth of new financing in October 2005, biometrics payment solution provider Pay By Touch has been on a buying spree. Since then it has purchased, or announced plans to purchase, SIX other companies. First, they completed their acquistion of Dallas based ATM Direct, which has a patent pending, software only solution to bringing PIN Debit to the Web. PBT announced their PBT Online Program February 6th, 2006

Pay By Touch got much of the industry's attention three months ago when it outbid CyberSource Corp. for beleaguered third-party processor Card Systems Solutions Inc. (see
"Pay By Touch Outbids CyberSource to Acquire CardSystems," The Green Sheet, Nov. 14, 2005, issue 05:11:01). "The acquisition brought Pay By Touch access to CardSystems' 120,000 merchant customers, $18 Billion in annual card processing and a direct connection to acquiring banks and ISOs

Between Dec. 2 and 15, Pay By Touch bought three loyalty and rewards program-related companies:
Capture Resource, a rewards program supplier for gift cards with 120 million enrollees, 7th Street Software Inc. and Convena LLC, two loyalty technology companies.

It also announced plans to purchase competitor
BioPay LLC, which will bring 2 million enrolled users, 1,600 retail locations and more than $7 billion in transaction processing. "BioPay has perfected an excellent check-cashing solution, and Pay By Touch is making incredible inroads in in-lane payments," said John Rogers, Pay By Touch founder, Chairman and Chief Executive Officer. "We are hand in glove, and together we can provide solutions for retailers and consumers alike."

Also during this time, the company announced a partnership with
NCR Corp. to combine both companies' hardware and software solutions. Other Pay By Touch partners include Hypercom Corp., Ingenico, VeriFone, IBM (who just awarded PBT a coveted Beacon Award) , Accenture and Discover Financial Services.

In 2004, Pay By Touch acquired InterCept Payment Solutions, which specializes in card-not-present transactions, Pay By Touch's biometric authentication payment system allows shoppers to pay for purchases with a finger scan, which is tied to their bank accounts and loyalty programs.

3 of the 5 companies acquired by Pay by Touch were loyalty driven, enabling PBT to create their proprietary "personalized marketing" program.

For more information on "1 to 1 marketing" there's a good article written by Jesse Quatse (VP Product Operations at 7th Street Software) entitled:
The Technology of One-to-One Marketing

Pay By Touch

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