BankServ Enters P2P, Mobile Payments Business with Magex Deal

The U.S. person-to-person payments business, including P2P payments on cell phones, attracted yet another entrant with the announcement Tuesday by BankServ Inc. that it had acquired the managed-payments platform of Magex Holdings Ltd., a U.K. company, for an undisclosed sum. In the deal, San Francisco-based BankServ, a 10-year-old private company that processes automated clearing house and wire-transfer transactions, gains Magex's person-to-person remittance business as well as its processing relationship with Zopa, a U.K.-based online lending exchange claiming more than 90,000 users. The Magex division handles P2P payments via the Internet as well as mobile phones. Long dormant, the mobile-payments business heated up in the U.S. this spring with the launch of PayPal Mobile, a handset-based payment service from eBay Inc.'s PayPal unit that lets PayPal users pay other individuals as well as selected merchants. Since then, other entrants, including Obopay Inc. and KushCash Inc, have come on the scene with payment services that rely on cell phones and prepaid, ACH, or card transactions triggered by short-message-service (SMS) transmissions. At the same time, the bank card associations have begun piloting a technology called near-field communications that enables consumers to use cell phones equipped with electronic wallets to make contactless point-of-sale transactions from their credit or debit card accounts. BankServ's intention is to bring the Magex mobile-payments product, now in use in Saudi Arabia, to the U.S. market, according to a statement the company released Tuesday. “The [person-to-person] payments business has a very promising future, so it's a very exciting area for our company to enter,” said David F. Kvederis, president and chief executive of BankServ, in the statement. “As evidenced by the success of companies like PayPal and Amazon.com, electronic payments are becoming increasingly accepted as an important and convenient tool by the general public.” The Magex deal gives BankServ access to the BACS system in the U.K., an electronic payments bank network in the U.K. that carries ACH transactions, to go along with its long-standing link to the U.S. ACH.