By acquiring CardConnect, First Data has much to gain – most importantly a boost in financial technology in the ERP space.
New York-based First Data is one of the world’s largest card payment processors, handling some $2.2 trillion in transactions per year. CardConnect, based in Pennsylvania, processes about $26 billion in payments annually through a merchant customer base of 67,000. The larger firm has agreed to pay $750 million to acquire CardConnect, marking its biggest takeover since going public in 2015. CardConnect itself went public in 2016 when it was acquired by FinTech Acquisition Corporation.
“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 Frank Bisignano, Chief Executive of First Data.
The acquisition is advantageous for First Data in a variety of ways: It will add significant volume to the company’s transactions, and grow its merchant customer base. Perhaps most importantly in what is being called “Fintech’s golden age”, First Data will gain access to CardConnect’s suite of transaction processing tools. The centrepiece is a platform that allows merchants to combine payment systems from multiple vendors, bringing First Data into the growing invoice-to-cash software market.
“We didn't have access to their technology and they didn’t distribute all our options. We talked about expense synergies but it’s the ability to grow our ISV and ERP solutions that was key”, Bisignano told Reuters.
The integration of the two companies is expected to be trouble-free, as First Data and CardConnect already have a distribution partnership and are familiar with working together.