The path to the payments deal started about three or four years ago when Adam Bloomston, CEO of Payscape, and Thomas Nitopi, CEO and founder of NXGEN, first met. As they talked about their respective payment services firms, they realized, in Bloomston’s words, “that both of our companies didn’t really compete with each other in multiple areas.”
However, they both understood the opportunity: to further their global presence and create what Nitopi, in a PYMNTS interview, called “a global sales organization” serving small and middle-market merchants. Thus, a deal was born.
NXGEN and Payscape have since announced they are merging, in a deal backed by Parthenon Capital Partners. The new company will process more than $10 billion in payments annually from some 20,000 merchants, and have a presence in more than 30 countries — as well as an ongoing focus on small and middle-market merchants.
The vision is to create what Bloomston called a “powerhouse” to serve a segment that calls for a dedicated platform to address its unique needs, Bloomston and Nitopi said during an interview on Friday (April 26). The combination also leverages “significant” investments in their own back-end systems to remove the friction from onboarding and serving these small and mid-sized businesses (SMBs).
For now, the operation will continue under both company names, though that could change with time. Bloomston will serve as CEO, while Nitopi will continue to oversee NXGEN and become vice chairman of the board.
Post-merger plans, according to Bloomston, involve going both wide and deep — giving SMBs a single platform for navigating the digital transformations that are before them, including everything from surcharging programs and electronic invoicing to specific integrated payments and business process capabilities in the camp, event, church and charity verticals.
Also key, Nitopi said, is an ability for these businesses to accommodate their global growth ambitions by enabling transactions within the domestic markets in which their current or prospective customers live. This is where the combined entities can leverage their global capabilities, including teams in more than 30 countries.
Bloomston told PYMNTS that both companies, pre-merger, were experiencing “double-digit” growth — a trend that continues in 2019.
“It’s more than just payments,” he said, talking about his expectations for near-term organic growth for the new, combined company. “It’s a sales and marketing engine around payments that allows us to gain more customers.”
He said the companies already work with some 40 community banks in the U.S., along with about 40 associations, and growth will continue along those lines. Yet, that’s not the only way the new, combined company plans to expand and gain more market share.
“We will deploy capital intelligently, and make a lot of intelligent acquisitions over the next couple of years,” Bloomston said.
The merger of NXGEN and Payscape comes amid a flurry of similar activity in the world of payments, as consolidation becomes the watchword. Earlier this year, in a $22 billion megadeal, Fiserv said it would buy First Data, with the acquisition set to close in the second half of this year. The consolidated company will be known as Fiserv. Just weeks later came the $43 billion acquisition of U.K.-based Worldpay by Florida-based Fidelity Information Services (FIS).
Global card rails Visa and Mastercard are also making acquisitions in an effort to expand their account-to-account payment capabilities. Visa acquired global payments network Earthport in December — a company with connections in 60 countries that can clear and settle transactions with local banks. In March Mastercard acquired Transfast, which maintains local clearing and settlement capabilities with banks in 120 countries.