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Already a force in remote deposit capture and specialty deposit and payment services, privately held BServ Inc.’s BankServ on Tuesday announced that it would acquire a pioneer in the remote capture niche, Zions Bancorporation’s wholly owned NetDeposit LLC subsidiary. The combined operation will serve more than 100,000 business locations and more than 500 financial institutions.
“We’ve known BankServ for a long time and we’ve competed against them,” NetDeposit chief executive Danne Buchanan, who is continuing with the combined company as vice president of enterprise payments, tells Digital Transactions News. “We believe that the time was right to really build something stronger, a company that has a broader product set, a deeper product set. We believe putting these companies together absolutely does that.”
BankServ president and chief executive David F. Kvederis had made some overtures to NetDeposit over the past couple of years, but it wasn’t until last December that he and Buchanan started talking, according to Buchanan. Kvederis, who wasn’t available for an interview Tuesday, said in a statement that “this is an important milestone for the industry, and an opportunity to deliver even more world-class services with better cost dynamics. With consolidation comes the ability to compete more effectively, with a broader solution offering and expanded distribution channels.”
NetDeposit offers remote capture and related services that it sells through 65 financial institutions, including desktop and home versions. It’s also planning to announce a remote deposit capture product for mobile devices early next month, according to Buchanan. Las Vegas-based BankServ’s flagship remote capture product, DepositNow!, enables businesses to scan checks for deposit using a PC or laptop computer, and its services integrate with the popular QuickBooks and Peachtree accounting programs for small businesses. The company also offers various wire-transfer services over the Federal Reserve’s Fedwire network, financial messaging through the SWIFT network, and online credit card processing.
Celent LLC senior analyst Robert Meara, who closely follows the remote deposit capture market, said in a posting on Celent’s banking blog that the result of the acquisition “will be a stronger, more capable competitor in a market with, frankly, too many vendors. This is all good.” He added that NetDeposit has a “capable and scalable decision gateway, an area in which BankServ may have been comparatively weak, along with a more well-rounded distributed capture solution set including branch capture and multiple commercial [remote deposit capture] products.”
BankServ will acquire most of NetDeposit’s assets under a definitive agreement with Zions. The deal, whose terms weren’t disclosed, is expected to close by Sept. 30. NetDeposit, whose workforce will be cut by 15% to 25%, according to Buchanan, will remain at its Salt Lake City, Utah, headquarters. A NetDeposit health-care business will stay with Zions. The companies’ brands will operate “in parallel” during a transition period expected to last until early next year, according to a news release. Platform integration will follow after that, Buchanan says.
