Neovia Financial PLC’s $50 million acquisition of Montreal-based Optimal Payments will provide Neovia with a “meaningful” presence in North America, the United Kingdom-based merchant processor announced Jan. 20.
The deal “dramatically diversifies and broadens Neovia’s merchant base” and “provides a strong North American presence and fuller exposure to rapidly growing e-commerce markets,” Neovia said in a press release.
Neovia intends to change its name to Optimal Payments PLC upon completion of the deal by the end of May, the company said.
Neovia, the company behind the NetTeller prepaid card service, wants to use the Optimal acquisition as a springboard to become a stronger alternative-payments company. Neovia’s products include electronic wallets, prepaid cards and direct funds-transfer methods, which serve as alternatives to traditional card-based payments.
Neovia’s strategy is to target markets with high profitability. “We will continue to identify and focus on niche markets where we can generate higher margin business as a result of our specialist alternative payment [services] or superior risk-management capabilities,” Neovia said in the release. Examples include online dating services and online gaming.
About 60% of the new entity’s transactions will come from traditional debit and credit card payment processing and about 40% from prepaid products, Neovia said. About 75% of Neovia’s volume now comes from its proprietary merchant prepaid card transactions, and the rest come from traditional debit and credit card payments, according to a company presentation about the Optimal acquisition.
Once the deal is completed, North America should generate about 13% of the new company’s overall revenue, with Asia contributing 23% and Europe 63%, according to Neovia.
Optimal handles transactions valued at approximately $2.5 billion annually in credit, debit and direct-debit processing, according to Neovia. Many of the 2,500 customers in Optimal’s portfolio are card-not-present merchants in the online or mail/telephone order categories.
Neovia says it processes approximately $3 billion in transactions annually for more than 2,000 merchants.
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