It didn’t get a lot of press at the time, but the acquisition by merchant acquirer Global Payments Inc. of Accelerated Payment Technologies in 2012 proved to be the starting point of big acquirers pairing up with integrated software vendors and value-added resellers to deepen their relationships with merchants.
Atlanta-based Global Payments, then headed by now-retired chief executive Paul Garcia, announced the pending APT acquisition five years ago this week and completed the $413 million cash deal that October.
Warren Fisher, a former Goldman Sachs portfolio manager and founder of Tampa, Fla.-based investment firm Manole Capital Management LLC, commemorated the acquisition Thursday in a SeekingAlpha.com blog post titled, “How Global Payments Changed The Merchant Acquiring Industry.” At the time, the deal did not seem to be a “milestone event,” Fisher wrote.
Ultimately, however, the acquisition showed that acquirers could break free of the price-driven competition that had prevailed in their industry for decades by teaming up with software developers and distributors that provided business-management applications to merchants. APT sold payment services through a network of 700 VARs in 13 industry groups.
“With [Global Payments’] deal for APT, a massive shift in the marketplace has occurred,” Fisher wrote. “Instead of merchants switching based upon a few basis points of lower acceptance costs, merchant acquirers and processors have become embedded into their clients’ workflow. Through an elaborate and complex network of value-added resellers, or VARs, software and hardware devices are being sold into all types of businesses.”
Other acquirers began following Global down the ISV/VAR path, including the biggest, First Data Corp. One of the most notable acquisitions as the trend gathered steam was Vantiv Inc.’s $1.65 billion buyout of Mercury Payment Systems in 2014. Mercury was one of the biggest independent sales organizations in the ISV/VAR space at the time, working with 600 developers and 2,400 VARs and software dealers.