POS Companies Bought by Payment Companies….July 11, 2017
Worldpay + Vantiv, and First Data + CardConnect?
The world of payments seems to be shrinking. With every day it seems that payment companies are gobbling each other up. But it doesn’t stop with other payment companies, they’re doing it with POS companies too!
After merging with Global Payment Systems, Heartland Payment Systems has been busy. They’ve been buying up POS companies like PC America, Dinerware, and Digital Dining. But the buck doesn’t stop there. They’ve been acquiring analytic companies like Beanstalk, which connects POS with analytics. They’ve also acquired Payroll 1, a payroll and tax filing company.
But Heartland isn’t in this alone. Not so long ago NCR bought out Aloha software. Alongside NCR Silver, Counterpoint POS, and venue specific solutions, make them a contender. And back in 2013, First Data bought a then small company called Clover. Clover becoming somewhat of a juggernaut of it’s own of late.
But why are these companies all buying each other?
It’s become obvious that the big money is in processing payments. Smaller companies like Square, and Stripe have been edging in to get their share. But by buying Worldpay, Vantiv has secured the UK as a customer. An article by Forbes states that 41% of UK transactions go through Worldpay. There are around 100 Billion transactions on credit and debit cards per year. Trying to imagine the fees companies like this collect gives me a headache thinking about it.
So the more territory you own, and the bigger your piece of that 100 Billion transaction pie. It’s no surprise that these companies all want a bigger piece.
But why would they buy up POS Companies?
Even better question! It’s because when you control the POS company, you also control the payment processing. So if you use Clover, your processing is through First Data. Heartland is now running processing for a dozen such POS companies.
The focus has been on legacy POS so far. With the notable exception of Clover, the rest of the POS companies are all Legacy Systems. The mPOS systems like Revel Systems, and Shopkeep, still let you choose processing.
With the stock market riding high, who knows what company will buy another next. But I’ll be paying attention, so feel free to check my blog anytime here.