First American Buys Govolution, Enters Booming Bill-Pay Market

Consolidation in the rapidly growing electronic bill payment business continued today with the acquisition of Govolution Inc. by Fort Worth, Texas-based processor First American Payment Systems LP. The deal, terms of which were not disclosed, hands First American an immediate stake in the business of processing taxes, fines, permit fees, tolls, and other payments for federal, state, and local entities. A statement released by North American says consumer demand in the sector is shifting away from cash and checks. “We believe that Govolution has the most robust technology available in the government e-payment sector,” said Neil L. Randel, president and chief executive of North American, in the statement. “Utilizing Govolution's outstanding management team, we plan to aggressively expand into this rapidly growing market.” Govolution, whose headquarters will remain in Arlington, Va., after the acquisition, processes payments via credit and debit card and over the automated clearing house network for transactions originating on the Internet but also in call centers and on kiosks. Earlier this year, it began offering so-called PIN-less debit transactions?payments consumer make online with PIN debit cards but without entering PINs?through links to electronic funds transfer networks established by Online Resources Corp. First American processes card transactions for 75,000 U.S. merchants. The Govolution deal is its second major acquisition of the year. In January, it announced it was buying National Data Funding Corp., an independent sales organization specializing in wireless, Internet-protocol merchant processing (Digital Transactions News, Jan. 14). The deal follows by 29 days the acquisition of Link2Gov Corp., another processor of government bill payments, by Metavante Corp. (Digital Transactions News, Oct. 3). And in July, Fiserv Inc. announced it was buying BillMatrix Corp., a bill-payment processor based in Dallas, for $350 million (Digital Transactions News, July 28).