Metavante Expands Its International Group With the Acquisition of Nomad Payments For $58 Million

Implications: Metavante's purchase of Nomad Payments for $58 million shores up its plans for a big international push through its Prepaid Solutions Division, with an international push in Europe, Asia-Pacific, the U.K. and other countries to go after its share of the prepaid cards transaction volumes growth. Metavante will attempt to capture market share of global prepaid cards transaction volumes, which could reach two trillion by 2010. The acquisition provides Metavante significant market opportunities with financial institutions, retailers, government agencies, open loop gift cards, professional organizations and affinity groups in Europe and the U.K.  As payments convergence and market conditions continue to drive consolidation in the payments space, few companies appear to be as well positioned as Metavante to profit from the strong growth in e-payments and banking overall, in addition to the ability to create unique products and services for their bank and corporate customers.

Analysis: Over the past few years Metavante has spent over two billion to acquire 18 companies to compete more effectively, streamline operations, create synergies across its enterprise and to expand its customer base and its cross sell and upsell efforts. Through an aggressive acquisition strategy Metavante has become a leading provider of a vast range of banking and payment services to financial institutions. London based Nomad Payments is Metavante's latest acquisition and could assist Metavante in establishing a greater presence in the U.K. and European prepaid cards markets.

1.  Metavante has been busy building a payments hub and routing capability that would sit between Metavante's various payment networks and solutions to help banks make strategic payment routing decisions and help their banking customers increase the profitability of their payment businesses, which has come under pressure as the migration to e-payments has eroded traditional sources of profit

2.  Metavante may operate one of the widest range of processing solutions in the electronic transactions space, including check imaging solutions, image exchange, merchant acquiring, online bill payment, gift card processing, mobile payments, ACH (Automated Clearing House) and EFT (Electronic Funds Transfer) for debit and prepaid cards

Takeaway:  Metavante appears to be well positioned to profit from the strong growth in e-payments and banking overall, as well as the ability to create unique products and services for its bank and corporate customers, which may be why private equity firms are eyeing the payments space because processors such as Metavante and others have the ability to generate consistent cash flows.