Demand for digital payments
ACI Worldwide Inc. (Nasdaq: ACIW) acquired Speedpay from Western Union for $750 million, marking the largest acquisition in ACI’s history. The deal puts the company at the forefront of the on-demand bill payments category. It also accelerates ACI’s “Any Payment, Every Possibility” strategy, which is designed to meet consumer demands for digital payments.

“ACI’s growth strategy is inclusive of opportunistic tuck-ins to enhance product features, functionalities, and value-added services via M&A,” ACI executive vice president Sanjay Gupta tells Mergers & Acquisitions. Speedpay follows ACI’s acquisitions of payment technology companies RevChip and TranSend.

Accelerated bill payments lets customers make last minute payments for a fee, and allows them to avoid getting charged a higher late fee. Customers are using debit cards and other cashless methods to make payments. About 85 percent of business still do not offer electronic bill pay services, according to ACI.

“It’s only a matter of time before real-time and expedited bill pay becomes an important part of the biller direct equation in the U.S.,” ACI chief strategy and transformation officer Craig Saks and former interim CEO said during a recent earnings call. Odilon Almeida has been named ACI’s CEO in 2020. Almedia is a former Western Union executive, and most recently served as an operating partner at Advent International.

Any time, anywhere
“The acquisition of Speedpay increases the scale of the company’s on demand business and allows the acceleration of platform innovation through increased research and development and investment in ACI’s on demand platform infrastructure,” ACI said in a SEC filing.

Since the deal closed, ACI formed ACI Speedpay, a one-stop shop for digital payment services. The combined company serves more than 4,000 U.S. customers across the consumer finance, insurance, healthcare, higher education, utilities, government and mortgage sectors. ACI Speedpay gives consumers the convenience of customizing of how they want to receive, view and pay their bills.

“Convenience seekers are often early adopters who seek the convenience of paying bills electronically, but who value a low-effort experience,” according to ACI Speedpay’s website. As financial technology products rise in popularity, businesses and consumers look to service providers such as ACI and SpeedPay to help with their payments processing.

“Electronic payment volumes continue to increase around the world, taking market share from traditional cash and check transactions. In their world payments report, Capgemini predicts that non-cash transaction volumes will grow in volume at an annual rate of 14.2 percent, from $538.6 billion in 2017 to $1,045.5 billion in 2022,” ACI says in its filing.

M&A history
ACI’s growth strategy is includes tuck-ins to expand product features, functionalities, and value-added services through M&A. Before 2019, the last deal ACI made came in 2015 when it purchased e-commerce payments services provider Pay.On. Otherwise, ACI has been focusing on growing organically and through other investments. For example, in 2019, ACI made an investment in Indian digital payments company Mindgate Solutions.

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