The improving economy is reviving merger and acquisition activity among banking technology vendors, but some deals could be troubling to bankers.

Jack Henry & Associates Inc.'s deal for iPay Technologies Inc. has a big core processing provider snatching up a noncore product — exactly the kind of move that analysts say could strengthen customer ties and attract new clients.

In contrast, should Fidelity National Information Services Inc. sell itself to a group of private-equity firms, as rumored, its bank clients would likely wonder whether there would be major changes at one of the biggest providers of core processing systems, and this uncertainty could make it difficult for the banks to make their technology spending plans.

"The bottom line is the clients have got to make their decisions … based on existing products, not the road map that may have been in place" before a vendor is acquired. "You cannot depend on it," said Peter Redshaw a Gartner Inc. research vice president who focuses on banking technology.

Jack Henry, which announced the deal Friday, said it would pay $300 million in cash to acquire iPay, which provides bill-pay, person-to-person transfers and other payments technology.

Analysts said the deal, which solidifies a relationship the two companies have had for several years, is smart because it would give Jack Henry greater control over iPay's product portfolio and could help it attract new customers for its core processing applications.

Banks' customers are seeking enhanced bill-payment, mobile and account management features, especially in the online realm, said James Van Dyke, the president and founder of Javelin Strategy and Research in Pleasanton, Calif. That's putting pressure on core processors like Jack Henry to offer more products developed by outside vendors, such as iPay.

"There's significant disintegration today between how all these systems work together," Van Dyke said, and the acquisition would make it easier for Jack Henry to incorporate iPay's technology into its offerings. The combination could help Jack Henry compete against its much larger rivals, Fidelity National and Fiserv Inc.

It would be the Monett, Mo., company's largest acquisition and "certainly rounds out offerings" for bill pay, Debbie Wood, Jack Henry's general manager of marketing and strategic initiatives, said in an interview. She said that her company does not offer some of iPay's other products, including its bill presentment application.

The two companies began working together in 2007, when Jack Henry dropped Online Resources Corp. as its provider of bill-pay software to switch to iPay, of Elizabethtown, Ky.

Bill Ready, iPay's president, called Friday's deal a "very natural acquisition." It is expected to close in June.

Founded in 2001, iPay has more than 3,600 bank and credit union clients, including about 1,075 that receive its technology through Jack Henry, Ready said.

Analysts agree the deal could open the door to new customers and more lucrative relationships with existing ones for Jack Henry.

But they said the prospects of more consolidation between core processing vendors will challenge banks to plan out their long-term technology investments.

Speculation that the industry is ripe for consolidation was fueled last week by news reports that the private-equity firms Blackstone Group LP, TPG Capital and Thomas H. Lee Partners LP are considering buying Fidelity. National.

The companies have not commented on the speculation, but industry watchers say Fidelity National — and its competitors — are appealing targets for private-equity buyouts because of the recurring revenue they generate from their customers and strong cash flow.

Robert Hunt, a senior research director with TowerGroup in Needham, Mass., said these deals can be worrisome to banks. Some clients sign on with a specific vendor in part because of specific research and development projects, and those efforts can get put on the back burner or killed after a buyout.

Additionally, "your vendor could be bogged down in integration efforts," diverting attention and resources from new product development, said Gwenn Bezard, a research director with Aite Group LLC in Boston.

Javelin's Van Dyke said the core processing sector is crowded, both within the United States and abroad, and is primed for acquisitions.

Some of the analysts named Jack Henry and Fiserv as potential acquisition targets.

(A Fiserv spokesman declined to comment.)

In an e-mailed statement provided by Wood, Jack Henry Chief Executive Jack Prim said, "Every time one of [our] competitors gets acquired or is involved in discussions about being acquired, various parties like to speculate about what we may do. While this has been the case for years, our position has never changed — we run our company for the long-term benefit of our customers and shareholders and expect to continue to do so."