Paya Expands Its Government Unit With an Acquisition of The Payment Group

Payments provider Paya Inc. has signed an agreement to acquire The Payment Group (TPG), a provider of integrated payments to utilities and government. TPG’s software allows consumers to digitally pay their court and utility bills. Terms of the deal, which is expected to close in October, were not disclosed.

As part of the acquisition, Paya plans to invest in TPG’s sales efforts, supplement the company’s technology offerings, and broaden marketing efforts to increase the adoption of electronic payments among TPG’s current customer base, which totals more than 600.  

Paya also intends to integrate TPG’s online-billing and software applications into Paya Connect, its end-to-end payments platform. Doing so will enhance Paya’s suite of integration tools within Paya Connect, as well as the commerce solutions it provides to Paya’s partners and their clients, the company says. 

“TPG perfectly complements our already robust capabilities in the government and utilities sectors,” Paya chief executive Jeff Hack said in a prepared statement. “The acquisition will allow us to provide enhanced solutions to local governments and municipalities as they offer their residents the ability to make digital payments for services like utility and court bills.”

TPG is the second player in the government and utility space Paya has acquired. In 2019, Paya acquired First Billing Services, a provider of electronic bill presentment and payment solutions to utilities and municipal governments.

In addition, the agreement to acquire TPG comes on the heels of Paya’s merger with special acquisition merger company (SPAC) FinTech Acquisition Corp III.

That deal, announced in August, is part of Paya’s plans to take the company public. By merging with Fintech Acquisition, which is a publicly traded SPAC or “blank-check” company, Paya will not undergo an initial public offering once the merger is completed. Instead, the combined entity will assume a new legal name and will re-list on the Nasdaq exchange under the ticker PAYA later this year. This method of becoming a publicly traded company is often referred to as a SPAC IPO. Typically, SPAC IPOs close within two to three months. 

Paya focuses on market segments where electronic payments acceptance is under-penetrated and where it has developed differentiated product and software partnerships. The company processes more than over $30 billion in transactions for more than 100,000 customers through Paya Connect, its proprietary card and ACH platform. The company also partners with software providers to deliver vertically tailored payments solutions to merchants in such industries as B2B goods and services, health care, non-profit and faith-based organizations, government entities and utilities, and education.