Partnerships / Acquisitions

First Data To Buy CardConnect For $750M

As of yesterday, First Data has officially agreed to acquire rival payment processor CardConnect for around $750 million.  The deal will reportedly be covered mostly in cash — and will include the repayment of CardConnect’s debt.

This buy represents First Data’s biggest acquisition since going public in 2015.

First Data handles, on average, $2.2 trillion in monetary transactions each year — meaning calling CardConnect a competitor is likely putting too fine a point on it, since the firm processes around $26 billion in payments per year.  Not a small amount to be sure — but almost nothing compared to $2.2 trillion.

CardConnect recorded sales of about $589 million last year, but lost nearly $16 million. The firm went public last year shortly after it was acquired by FinTech Acquisition Corporation, whose public stock converted to CardConnect stock.

To snap up CardConnect, FD will pay $15 per share, a 10 percent premium over the Friday closing price of the stock.

“This transaction is consistent with our strategy of integrating and scaling innovative technologies across our distribution footprint to better serve our partners and customers,” Frank Bisignano, First Data’s chief executive, said in a statement.

“We are thrilled with the opportunity for CardConnect to partner with an organization that has the world class capabilities of First Data,” said CardConnect President and CEO, Jeff Shanahan. “This transaction improves our ability to innovate and deliver leading technology-oriented commerce solutions to our combined customer base. In addition, we believe our growth trajectory improves with First Data’s breadth of products and its powerful distribution network.”



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

Click to comment