Some of the largest financial technology companies are entering into mergers and acquisitions at an unprecedented pace, a research firm reported.
Since January 2019, three of the eight significant fintech partnership and M&A deals have been reported, S&P Global Market Intelligence said. The three recently announced significant deals were Fidelity’s acquisition of Worldpay in March for $33.5 billion, a private investors group’s $11-billion takeover of First Data in February, and Fiserv’s purchase of First Data in January for $22 billion.
Analysts interpreted many of these multi-billion deals as a defensive move in response to the impact of rapid technological changes in the fintech sector. Take Fiserv’s purchase of First Data. This deal materialized after Square’s looming presence, particularly its point of sale product, threatened both companies.
Fidelity CEO Gary Norcross aptly described this development in the fintech players, saying that the aggressive moves of fresh innovators and disruptors prompted them to prepare for the competition.
Not only that there are many deals taking place, but they are also going on in a global scale, Recently in India PayU, an online payment service provider, announced its takeover of Wibmo, a US-based financial technology firm, for $70 million.
This strategic acquisition allows Wibmo to build a solid digital payment ecosystem that includes banks, merchants and consumers and for PayU that can harmonize transaction processing on both the issuance and acquisition side to deliver a streamlined payment experience in online and mobile payments in India.
Another M&A move is taking place, this time in Singapore where fintech Smartkarma announced it would join forces with Interactive Brokers, a US-based brokerage. With the partnership, clients of Interactive Brokers can get access to Smartkarma’s single-subscription platform. This feature will give allow them to research on listed companies and directly communicate with analysts on the Smartkarma platform.