AIB and First Data Unite in a Joint Venture to Take over Payzone

Wednesday, August 14th, 2019

The ongoing alliances among payment industry giants continue across the globe, just when we thought we’d had enough M&As.

Long-established firms from the sector have been merging to get stronger or swallowing influential startups to expand their bottom line. All these efforts are geared towards providing frictionless payments worldwide, but each merger targets a specific niche or segment of payment.

The most recent news going around is that Allied Irish Banks (AIB) and First Data are entering a joint venture. The partners are to purchases near all – 95.9 percent of Payzone— a FintTch payments company.

These two companies will own the Joint Venture as follows:

• Allied Irish Bank will be the major shareholder owning 75%
• First Data will own the remaining 25%

Both of the firms will be eligible for the ownership interest in Payzone, which is worth up to €100m (£86.4m).

To hit the ground running, the Allied Irish Bank and First Data are throwing in €61m (£52.7m) exclusive of the net debt of approximately €25m (£21.6m) which the joint venture will clear on the close of the transaction. Furthermore, another €11m (£9.5m) is yet to be considered based on certain conditions.

According to Colin Hunt, CEO of AIB, the transaction will mean momentous fintech capability and expand Payzone’s user base in Ireland.

“The new association will allow AIB to advance and add more services to its offerings for our customers to enjoy. It will also enable us to break new ground into digital payment products and services,” said Hunt.

Payzone is a financial technology firm in Ireland that focuses on providing payment services. The company initiates consumer transactions via cash, cards, and card-not-present avenues. Retailers can access these services through Payzone Merchant Services.

Last year, its holding company announced earnings of €8.3m (£7.2m) before interest, taxes, depreciation, and amortization and total asset worth €59m (£51m).

Wrap Up

This may not be the last time you meet the news of a merger, acquisition, or joint ventures in the payment ecosystem. The boom of ecommerce is driving the industry towards evolution, and sector veterans are partnering to come up with long-lasting solutions.

Some of them are acquiring startups that show potential to ensure they are not left behind in the move towards seamless payments. Some analysts say it is a tactic established firms are using to stay relevant; I would say, that’s the secret to doing business in a dynamic market where the customer and merchant needs change from time to time.