PayPal to acquire bill payments company TIO

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PayPal have announced that they will acquire TIO Networks for $304 million CAD ($233 million USD) equity value, 25.2% above market value.

TIO is a bill paying network, as well as enabling online bill payment with card (or PayPal), they also offer self service kiosk payments, effectively a reverse ATM. The purpose is to expedite bill payment and financial services to unbanked and underbanked consumers. In essence it’s a similar service to that provided by PayPoint in the UK, except that it’s self service instead of operated by the shop assistant.

TIO operates in North America and processed more than $7 billion USD in consumer bill payments in 2016, serving 14 million consumer bill pay accounts.

By acquiring TIO and integrating bill payment into our global payments platform, PayPal adds another key service in our efforts to become a part of a consumer’s everyday financial life. Worldwide, more than 2 billion** people do not have affordable access to basic financial services, making it difficult and expensive for consumers to carry out basic financial tasks, including bill payment. TIO’s digital platform, and physical network of agent locations make paying bills simpler, faster, and more affordable. We are excited by the opportunity to extend this valuable service to our existing customers and welcome new billers and customers to PayPal.
– Dan Schulman, President and CEO of PayPal

Strategy behind the acquisition

TIO supports PayPal’s vision of democratizing money by giving consumers more convenient and affordable ways to pay their bills. The acquisition is expected to accelerate PayPal’s entry into bill payments and PayPal’s intention is to offer TIO’s service to PayPal’s customers within its online and mobile experiences.

PayPal are protecting their market share with TIO, it’s yet another tranche of customers who will transact with PayPal and thus are more likely to use PayPal when it comes to paying for other goods and services both on and offline.

More competitors than ever are entering the new payments market, Amazon Payments, Android Pay, Apple Pay, Google Wallet, iZettle, and Stripe, to name but a few, but they’re all way behind PayPal in becoming a daily part of people’s lives. Generally they rely on merchants adopting them or consumers prefering to tap and pay with their phone rather than a debit or credit card, what they’re failing at is to become an insidious part of people’s lives in the way that PayPal are.

One to watch in particular is Amazon Payments, whilst they may appear to be way behind PayPal, they may be performing better than it would appear at first glance. Amazon‘s challenge however, is to stop merely processing payments on Amazon and to start processing them on other retailers sites and there’s a long way to go before they can truly rival PayPal.


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