Digital Transactions Authoritative, insightful and timely information for payments professionals
Fiserv Inc. is buying electronic bill-payment processor BillMatrix Corp. in a $350-million deal expected to close by Sept. 30. Dallas-based BillMatrix processes payments on cards and through the automated clearing house for more than 120 clients, among them utilities, insurers, lenders, and phone carriers. It is a pioneer in the rapidly growing business of so-called PIN-less debit, the function by which consumers can make last-minute bill payments via the Internet or interactive voice-response unit using their PIN debit card accounts but not their PINs. BillMatrix, an 11-year-old company primarily owned by Boston-based private-equity firm Great Hill Partners and other outside investors, is expected to gross some $90 million in revenue in 2006. Management and employees hold the balance of the stock. BillMatrix President and Chief Executive Scott B. Walker, along with current BillMatrix employees, will become employees of Fiserv when the deal closes. Fiserv's acquisition of BillMatrix hands the Brookfield, Wis.-based bank processor important electronic bill-payment assets at a time when consumers are showing an increasing appetite for Internet-based payment capability. “It's no secret that Americans are increasingly using the Internet and the telephone to electronically pay their bills,” said Leslie M. Muma, president and chief executive of Fiserv, in a statement. “The acquisition of BillMatrix gives Fiserv a signficant foothold in electronic bill payment technologies.” Fiserv figures to leverage BillMatrix to build its position in both the biller-direct and bank-consilidator markets for electronic bill payment. Meanwhile, BillMatrix says it gains access to new capital at Fiserv with which to improve current products and pursue new opportunities. According to data from electronic-payments research house Celent Communications cited by both companies, electronic transactions accounted for 36% of an estimated 17.7 billion U.S. consumer bill payments last year, up from 23% in 2001. That number is expected to grow to 56% by 2007.
