Friday , March 29, 2024

Clearent Buying Payment Alliance International’s Merchant Services Division

Payments provider Clearent LLC is buying Payment Alliance International’s merchant-services division, which serves more than 17,000 merchants, for an undisclosed amount, Clearent announced Wednesday.

The deal adds $4.2 billion in processing volume to Clearent, pushing the combined entity’s total processing volume to $14 billion and its total number of merchants to 45,000. Terms of the deal are still being worked through, Chris Carman, Clearent senior vice president of finance and administration, tells Digital Transactions News. A date for the deal to close is not publicly available yet, he says.

Carman says the sale constitutes the entire bank card portfolio held by Louisville, Ky.-based Payment Alliance International. This leaves PAI with more than 75,000 ATM locations to manage. It most recently acquired Avery Scott LLC operator of more than 400 ATMs.

Clearent’s reasons for buying the division are multiple, Carman says. “They have a telesales channel that adds to our existing channels,” he says. Clearent also gains access to the sales staff and referral relationships with associations. Combined, Clearent and the PAI bank card portfolio will be more powerful than either of them independently, Carman says.

The decision to sell the bank card business was not an easy one, John Leehy, PAI chief executive, tells Digital Transactions News. “The decision to exit the bank card business and focus our resources on the ATM business is really driven by the success we’ve enjoyed in the ATM business,” Leehy says. With more than 75,000 ATMs, one out of every three retail ATM transactions is made at a PAI machine. Retail ATMs are operated independent of banks and generally placed in non-bank locations, such as convenience stores.

“Bank card, while continuing to be a strong business, doesn’t grow at the same rate,” Leehy says. “Really, this is about where we are going to continue to focus our resources.”

The deal enables PAI to “strategically accelerate and develop our commitment to the ATM,” Leehy says. “We just really think that’s a place we need to put our energies.”

PAI introduced new technologies, such as a cardless-cash ATM service developed by HalCash North America. And in November, PAI announced support for MagTek Inc.’s QwickCode system for cardless transactions.

Following the close, Clearent will operate offices in West Palm Beach, Fla., where PAI serviced its bank card merchants, and Louisville. PAI will maintain its corporate headquarters in Louisville, and operate offices in several other cities.

“For us, it may be the best fit because our business and their business lack a lot of overlap,” Leehy says.

Carman says while executives from each company have known each other, it was only recently that an acquisition surfaced. Clearent had considered acquisitions as a possibility, but “this came across our radar,” he says. “We’re both happy.”

Check Also

Refund and Policy Abuse Is Replacing More Common E-Commerce Fraud Attacks, the MRC Finds

Opening the door to online commerce is an expedient and profitable way to reach consumers, …

Digital Transactions