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A new entry in the arena for payments-related acquisitions, Syncapay, is targeting specialists in disbursements and payouts.
Plano, Texas-based Syncapay debuted last week with the intent to acquire payments companies that could benefit from shared services, while retaining the autonomy that differentiates them. “We are not looking at doing a roll up in payments,” Juli Spottiswood, Syncapay chairman and chief executive, tells Digital Transactions News.
The company made its first move in 2017 when it purchased Swift Prepaid Services Solutions Inc., a Buffalo Grove, Ill.-based firm. Swift is a self-contained entity within Syncapay that operates independently, Spottiswood says. Syncapay provides legal and regulatory services to Swift.
Syncapay, which is backed by investors Bain Capital Ventures, Silversmith Capital Partners, MissionOG, and Nyca Partners, chose payments companies specializing in disbursements, specifically in the corporate-funded space, as its target because the demand for these payments is growing and there are many niche players, says Spottiswood, formerly an executive with prepaid specialist Blackhawk Network. “We saw the opportunity to piece these companies together and maintain their brands, but look for synergies.”
That could entail tapping one acquired company’s international expertise to use with another Syncapay company expanding globally, she says.
A typical prospective acquisition will have moved past the proof-of-concept stage and is ready to benefit from being part of a larger entity, Spottiswood says, adding they should have the resources to scale quickly. “We want to take the burden of fundraising off the table for them and perhaps help them take some steps forward a little bit easier,” she says. Acquired companies will retain their executive teams.
Companies won’t be forced to relocate to Syncapay’s Plano, Texas, office, but the shared services are housed there.
Syncapay wants to bring these niche companies into its fold to help them offer a better product and become bigger companies themselves, she says. “There are a lot of companies entering that space and no clear winner yet.”
Others are eyeing it, too. Zelle, the bank-owned P2P payments system from Early Warning Services LLC, is launching a business-to-consumer payment processing service for disbursements. Processor First Data Corp. launched its Disburse-to-Debit service in 2017 that enables businesses to make payments across debit networks to a consumer’s debit card.
Cognizant of the competition, Spottiswood says the marketplace is big, and Syncapay is not restricting itself to U.S.-only companies. “Disbursements worldwide is enough to chew on for the time being,” she says.
