Private Equity Firm Sees Opportunity In Payments Market

In a move designed to gain entry into a rapidly growing prepaid-payments market, an Atlanta-based middle market private equity firm last week acquired Prepaid Solutions USA from West Suburban Bank Bancorp Inc. of Illinois and renamed it Prepaid Solutions Inc. The companies did not disclose terms of the deal. Prepaid Solutions is Navigation Capital Partners’ first foray into the payments industry. The firm also has stakes in companies ranging from a highway-construction supplier to a car-financing company. “The play here, as far as we’re concerned, is the fact that the payments game is a pretty lucrative, go-forward industry that we want to be a part of,” says O.G. Green, Navigation Capital operating partner. Prepaid Solutions will keep any relationships it had under West Suburban Bank, according to company CEO Ken Goins, who was appointed to the position by Navigation Capital. Dan Grotto, who previously served as the head of Prepaid Solutions USA, was named the president of the new entity. Prepaid Solutions will strive to enhance existing products and to introduce new ones to the market, Goins says. Prepaid Solutions USA had just started providing payroll debit cards to the cruise line market. Such a partnership could enable Prepaid Solutions Inc. to “leverage an existing opportunity and possibly get into other areas that have to do with foreign-currency [travel cards],” Goins says. Green is determined to target the financially underserved market, particularly the U.S. Hispanic population. “We’ll focus on that and see how we can carve a niche in that area because we feel it is undeveloped,” he says. Prepaid Solutions Inc. needs to build trust within that market, Goins says. “We have to find ways to build loyalty to the cardholder and why they should trust our company,” he adds.