This week saw two more major acquisitions in the financial services technology world, with bank tech giant FIS announcing it will acquire the remaining 78% interest in mobile banking and payment solutions provider mFoundry. FIS had owned a 22% stake in the company. On the same day, payments systems provider ACI announced it was buying competitor Online Resources Inc. for $126.6 million.
These moves are just the latest in a flurry of financial technology mergers and acquisitions over the past two years, such as Fiserv's acquisition of Open Solutions, Global Payments Inc.'s purchase of Accelerated Technologies, and many others.
David Albertazzi, senior analyst with Aite Group, says much of this M&A activity is driven by the fact that technology emerges so rapidly, that bigger companies in the industry find it more prudent to first partner with startup tech speciality companies, especially in the mobile space, before acquiring them outright, such as FIS did with mFoundry.
"It's a good strategy to first partner with some providers get to know them, work with them, and then when the time is right really acquire that asset," he says.
FIS' acquisition of mFoundry was ideal, says Albertazzi, since FIS had already integrated mFoundry's mobile banking platform into its own offering.
"Some acquisitions are aimed to take out competitors, but the scenario here is that they have a great existing partnership," he adds.
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio