MasterCard Buys Truaxis, Entering Coveted 'Deals' Space
The FinTech Innovation Lab contest, in which new financial technology companies compete for the attention of big banks like Citigroup, Bank of America and JPMorgan Chase, is underway. The winners will receive some funding, but the real carrot is the chance to be mentored by bank tech execs and possibly have their new technology piloted by the banks.December 7
MasterCard (MA) has acquired Truaxis Inc., a Silicon Valley start-up that crunches payment data to target special offers and discounts from merchants to debit and credit cardholders.
The deal, disclosed late Thursday, underscores the growing importance of merchant-funded rewards to financial services players. Such arrangements, which help banks generate revenue, have been heating up as the industry looks for new ways to make money on debit cards under the restrictions of the Dodd-Frank Act's Durbin amendment.
"We have been looking at the offer and reward space for a while," says Tim Murphy, MasterCard's chief product officer. "The space has rapidly evolved."
Truaxis, formerly known as BillShrink, was one of two winners out of more than 200 contestants in a start-up competition last year sponsored by Innotribe, a unit of the Society for Worldwide Interbank Financial Telecommunication.
MasterCard did not disclose how much it paid for Truaxis. The company plans to maintain Truaxis' service and 28-person staff, Murphy says. "We're delighted to welcome them to our family."
The Purchase, N.Y., company payments will continue to partner with a wide range of players, Murphy says. "We think that offers have a great rich opportunity to play in the [digital wallet] space."