Aiming to beef up its digital payment offerings for businesses, London-based Mobile Interactive Group Ltd. acquired online micropayments startup firm Zaypay International B.V., the companies announced Sept. 13.
Mobile Interactive absorbed the Netherlands-based micropayments startup company in order to round out the online and mobile payment products it provides to merchants, online billing providers and developers, the company said.
The acquisition underscores growing industry interest in the technology to support micropayments, analysts suggest.
Some estimates place the European micropayments market already at 6 billion euros ($8.2 billion U.S.) in business, and growing at double-digit rates, Zil Bareisis, a London-based senior analyst for research firm Celent, tells PaymentsSource.
Micropayments are generally defined as payments too small for using a credit card, and in Europe some define them as payments for less than 5 euros ($6.80 in U.S.), but that definition largely excludes digital goods such as e-books and e-gambling, which is also a large market in Europe, Bareisis says.
Mobile Interactive Group’s acquisition of Zaypay makes sense for Mobile Interactive because the micropayment option complements the company’s existing programs for mobile payments and high-volume mobile-messaging used for marketing campaigns, he says.
But exactly how the micropayment market is defined and where the line will be drawn on transaction amounts will remain a key to its growth, Bareisis notes.
Zapay, founded in 2006, provides merchants with a payment application software that allows customers to use short message service and text micropayments with mobile phones, rather than inputting credit card data on a merchant’s website payment page.
Bastiaan Peters, chief technical officer with Zaypay, sees the deal as an opportunity for Zaypay to continue developing its micropayments platform as part of that growing global market.
Zaypay’s organization also may benefit from the vision and leadership Mobile Interactive may provide, potentially enabling it to expand to “the next level” of ecommerce, Peters said in a press release.
Mobile Interactive will continue to operate Zaypay as a standalone business, with customers visiting the Zaypay website noticing only that it will be listed as “Part of Mobile Interactive Group,” the company said.
“Our aim is to build stronger relationships and provide developers with a frictionless payment system that's tailored to their platforms and to further understand and support their requirements around converting currency on an international scale," Mobile Interactive CEO Barry Houlihan said in a press release.
Zaypay appeared to be particularly ripe for purchase because of its technology and customer relationships, Bareisis suggests.
“Each [startup] case is different, as some are hoping to become the next big thing in their own right, while others seek exit strategies, and others just disappear off the radar,” Bareisis says.
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