Checkout.com, a London-based payments company, has acquired Perth-based Pin Payments in a deal that shows how Australian fintechs, especially in the red hot payments space, are on the radar of foreign players seeking to expand in Asia.
Checkout.com, which has 700 employees in 10 offices around the world and is valued at just under $US2 billion ($3.01 billion), will use the acquisition to enter Australia and New Zealand, to target merchants seeking to take online and mobile payments. It plans to compete with Adyen, another European-based payments firm to recently arrive in Australia, and Tyro's new online payments offering.
Pin Payments, which has offices in Perth and Melbourne, launched in 2013 and serves over 12,000 businesses, including WooCommerce, Shopify, BigCommerce and Magento. The software allows them to accept payments from debit and credit cards without needing a merchant account from a bank.
Its technology is focused on online web and mobile payments, as opposed to physical payments like another offshore payments disrupter, Square, co-founded by Jack Dorsey, which provides cheaper terminals than banks allowing merchants to accept face-to-face payments.
The deal will be noticed by major banks as competition in the so-called 'merchant acquiring' space heats up with a host of players arriving from offshore. Macquarie reckons almost half of the $1.7 billion in annual revenue the major banks receive from payments is under threat by global technology disruption.
Checkout.com is a direct rival to Dutch payment firm Adyen, which is targeting the top end of the retail market in Australia and has forced the big four banks to unbundle merchant payment fees and lift investment in software and data analysis tools for retail customers.
Checkout.com's expansion comes on the back of a $US230 million venture capital raising funding round last year, backed by investors including Singapore’s sovereign Wealth Fund GIC, DST Global and Insight Partners, an early investor in Twitter and Alibaba. Its acquisition of Pin comes after Chinese giant Tencent took a substantial stake in Afterpay, to expand its reach into the United States. Neither company would comment on the value of the deal, which represents an exit for Pin Payments' main shareholders Allectus Capital, and its co-founders, Grant Bissett and Dominic Pym.
The deal will allow Pin customers to access Checkout.com’s global platform to support expansion into new markets. Checkout.com can accept cross-border payments linked to 150 currencies. In February, it acquired French start-up ProcessOut. Checkout.com is also a recent member of Libra Association, suggesting it could play a role to develop a local 'stablecoin' market, where a digital currency is linked to a fiat currency, to support app-based payments.
Checkout.com has seen more businesses moving from offline to online commerce during COVID-19, including growth in subscriptions’ services and online services. Its technology is used by food delivery company Deliveroo, and money transfer firm TransferWise.