North American Bancard LLC took a big step into the government and utility payments markets with its purchase last week of Point and Pay, a Haines City, Fla., recurring-billing company.
"We had been interested in the convenience-fee model and government payment space," said Howard Morof, North American Bancard's chief financial officer.
Many companies accepting payments on a government agency's behalf assess a convenience fee for payment card transactions made online, Morof said.
Consumers may pay their tax and utility bills, among many others, through Point and Pay's service when billers sign up.
North American Bancard, a Troy, Mich., independent sales organization, announced the acquisition June 14.
It did not give a price.
North American Bancard's move into government payments is not surprising, said David Fish, a senior analyst at Mercator Advisory Group Inc. "That segment is underpenetrated with card-acceptance services."
The ability to assess and collect a convenience fee is enticing for many payment services companies, Fish said.
The Point and Pay acquisition also is a sign of continuing merger-and-acquisition activity centered on technology among payment services companies, he said.
