A recent note from S&P Global Market Intelligence places the financial payments M&A spree into context. Transactions inked in the two months trailing were roughly flat in deal value, while volume lagged a year-long high set in March, the same month that saw Thoma Bravo acquire Calypso Technology for $3.75 billion. Do these market stutters in deal value and volume represent a shift in the fintech market?

S&P’s short answer is ‘no.’ And there’s several indicators to support that view. 

The search for scale is expected to drive acquirers just as niche payment providers adversely impacted by the pandemic become willing sellers, the note says. Deal volume to date has shown a roughly upward trajectory, while deal value was buoyed last year by a few mega mergers. S&P Global’s $40 billion acquisition of IHS Markit in November, paired with Intercontinental Exchange’s $11 billion purchase of Ellie Mae are two of the outliers at the upper end of the scale. 

If valuations are any indication, the market is still bullish on the sector. Payment card issuer Marqeta soared 13 percent on its market debut earlier this month. A blockbuster trading debut for Marqeta could provide further confidence that middle market private equity have scope to build platforms of their own for a solid exit. Many payments deals have hovered in a range accessible to middle market funds, and Marqeta’s upcoming capital infusion will array it among industry players with deep pockets and incentives to remain technologically relevant.

Meanwhile, there is rationale for future deals in both payments consolidation and exposure to new markets. Scaling into a new sector or geographical area could continue to motivate acquirers intent on leveraging platforms for which incremental transaction processing costs little. Buyers could also look to get closer to their customers through acquisitions in adjacent markets. 

A slight slowdown might not mean the party is over yet.