From the June 24, 2010, issue of ISO&Agent Weekly.
North American Bancard LLC took a big step into the government and utility-payments markets with its purchase earlier this week of Point and Pay, a Haines City, Fla.-based recurring-billing company.
North American Bancard, a Troy, Mich.-based ISO, announced the acquisition June 14. The ISO would not disclose terms of the deal.
“We had been interested in the convenience-fee model and government-payment space,” Howard Morof, North American Bancard chief financial officer, tells ISO&Agent Weekly.
Fees Attractive
Many companies accepting payments on a government agency’s behalf assess a convenience fee for payment card transactions made online, Morof says.
Merchants may charge such fees only when the transaction happens in an alternate-payment channel, such as online, a Visa Inc. spokesperson says. Such fees must be disclosed and assessed for all forms of payments when the consumer is using the alternate-payment channel, the spokesperson notes.
Consumers may pay their tax and utility bills, among many others, through Point and Pay’s service when billers sign up.
Kevin Connell will serve as president of Point and Pay, formerly a unit of Vesta Corp., a Portland, Ore.-based payments company. Connell previously worked at Official Payments Corp., a competing government-payments firm based in Reston, Va. Point and Pay will operate as a “substantially independent” business, Morof says.
North American Bancard’s move into government payments is not unsurprising, says David Fish, senior analyst at Mercator Advisory Group Inc., a Maynard, Mass.-based consulting firm. “That segment is underpenetrated with card-acceptance services,” Fish tells ISO&Agent Weekly.
The ability to assess and collect a convenience fee is enticing for many payment-services companies, Fish says.
The Point and Pay acquisition also is a sign of continuing merger-and-acquisition activity centered on technology among payment-services companies, Fish says.
