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Payment processor JetPay Corp. on Monday reported that it had acquired ACI Merchant Systems LLC, an independent sales organization that works through financial institutions to provide credit and debit card processing to their small and mid-sized business customers. Meanwhile, the big merchant acquirer Heartland Payment Systems Inc. recently bought Xpient Solutions LLC, a provider of point-of-sale software for the restaurant industry, for $30 million.
Langhorne, Pa.-based ACI Merchant Systems serves “several thousand” financial institutions, mostly in the Mid-Atlantic states and the Northeast. The acquisition will bolster JetPay’s distribution network through banks and credit unions.
“It’s going to help a lot,” JetPay vice chairman Peter B. Davidson tells Digital Transactions News. “We really just started our financial-institution channel about a year ago. It really brings a lot of expertise.”
ACI Merchant Services will become a wholly-owned subsidiary of JetPay headed by ACI’s founder and president, Michael Collester. “He really knows how to make customers happy,” says Davidson of Collester, who founded two other payments-related companies before starting ACI Merchant Services in 2004.
Berwyn, Pa.-based JetPay provides a variety of payment services and distributes them through independent sales organizations and industry associations as well as through banks and credit unions. JetPay also offers the MAC Visa-branded prepaid card as well as payroll-processing services.
The financial institutions ACI brings under JetPay’s wing, which range in size from one- or two-branch banks to some with about $5 billion in assets, will give JetPay a new outlet for selling its services that go beyond straight payment processing, according to Davidson. “A lot of the financial institutions are looking at their big brethren that are now providing payroll and prepaid card services,” Davidson says.
“Many of our financial -institution customers have asked us about providing additional value-added services like payroll and prepaid card products, to allow these smaller institutions to better compete with their regional and national competitors and generate additional fee revenues,” Collester said in a statement. “JetPay affords us the opportunity to provide these services in a quality and easy-to-service manner.”
The combined company will process $20 billion in payments for about 14,000 businesses throughout the United States. The purchase price was not immediately disclosed, but JetPay may reveal it in an upcoming Securities and Exchange Commission filing.
Meanwhile, Princeton, N.J.-based based Heartland, which has been an active buyer of tech companies and specialty payment processors serving schools and colleges in the past two years, reported Monday that it now owns Xpient Solutions, whose software runs on point-of-sale systems at 11 of the top 25 quick-service and fast-casual restaurant brands, including Taco Bell, Jack in the Box, Panera Bread, and Panda Express. Heartland first disclosed the pending acquisition in its third-quarter earnings conference call Oct. 31.
Xpient has 25,000 installed locations. While Xpient’s customer base is mainly big players in the hospitality industry, Heartland, which has a large restaurant contingent in its merchant portfolio, plans to make its solutions available to small and mid-size restaurant companies. Xpient’s systems manage everything from orders and loyalty programs to back-office operations such as employee scheduling and labor management, food and other inventory cost control, and supply management.
“Integrating Xpient into the Heartland organization allows us to bring the benefits of a sophisticated system for large operators to our small and mid-sized restaurant customers,” Heartland chief executive Bob Carr said in a news release. “This integration allows them to better manage many more aspects of their business through Xpient Solutions’ powerful capabilities while experiencing the quality customer service Heartland is known for as a hospitality industry leader.”
The Xpient acquisition solidifies a trend among merchant acquirers to add business-management services on top of payment processing in order to strengthen their relationships with merchants.
