Left behind in the last decade’s rush to sign up merchants for electronic payments is the non-profit sector, made up chiefly of faith-based organizations that collect billions of dollars yearly in offerings and donations—most of it in cash and checks. Still, payments providers are starting to pay attention, and on Thursday Paya Inc. announced a deal that will position the Atlanta-based processor squarely in the middle of this market.
Paya agreed to acquire Stewardship Technology Inc., a Mount Vernon, Ohio-based specialist in payments for non-profits. The firm also acts as a payment facilitator, another factor that attracted Paya to the deal. The price, as well as other specifics about Stewardship’s volume and other business metrics, were not disclosed.According to Paya, more than 80% of the total sum collected by churches and other faith-based organizations in the United States is still derived from cash and checks. With Stewardship’s expertise in hand, the processor sees a big opportunity. “This non-profit, faith-based [market] fits right into our wheelhouse,” says Greg Cohen, Paya’s president. “It’s a segment that’s underserved in payments technology.”
Cohen also plans to use Stewardship’s technology, which includes an electronic bill-payment and –presentment platform, as a model that can be replicated across his company’s business. “The EBPP platform, plus the payfac model, can roll out to other Paya segments. We can now bring this to market faster,” he says. In the payment facilitator model, a payments provider can sign up sub-merchants on its own merchant account, allowing the sub-merchants to begin accepting electronic payments sooner.
Paya is also acquiring the relationships Stewardship has built up over the years in a market that Cohen says is “extremely fragmented,” with, for example, thousands of independent churches. “It takes years to build trust,” he says. Stewardship, he says, “has grown up for 10-plus years in the faith-based world. They stayed extremely focused.”
The deal comes near the end of a busy year-and-a-half for Paya. The company, formerly known as Sage Payment Solutions, rebranded as Paya in January just seven months after Chicago-based private-equity firm GTCR LLC paid $260 million to acquire the firm from the United Kingdom-based Sage Group plc, a marketer of accounting software.
Just last month, Paya unveiled Paya Connect, a platform that allows independent sales organizations and software firms to develop payment and commerce applications for specific merchants. In July, the company suffered a setback when its chief executive, payments veteran Joe Kaplan, died unexpectedly.