Exclusive: Paydiant Co-Founder Expects More Consolidation After PayPal Merger, Others May 'Cease To Exist'
The mobile payments space is getting crowded, but consolidation and implosion could reduce the industry to a more manageable level.
Paydiant, a white label mobile wallet platform, was acquired by eBay Inc (NASDAQ: EBAY)'s PayPal earlier this month. Before that, Google Inc (NASDAQ: GOOG) acquired mobile payments-related technology from Softcard.
Days before that acquisition was confirmed, SAMSUNG ELECT LTD(F) (OTC: SSNLF) announced that it had acquired LoopPay, a mobile payments system that works with most point of sale (POS) terminals.
Paydiant co-founder Chris Gardner told Benzinga that there is "no doubt" that more mergers and acquisitions will follow.
"There are literally hundreds of mobile wallet providers out there today," said Gardner. "Most of them don't have enough of a market position or value prop to survive on their own. Plus, now you have three [to] five significant players fortifying their positions, making it even more difficult. I expect some to be important acquisitions, but a lot of others may just cease to exist."
'More Weight And Scale'
Gardner said that PayPal gives the Paydiant platform "a lot more weight and scale in the market."
"When you consider what they bring to the party -- world-class risk management, 24/7 customer support, an open payments platform that supports all mobile operating systems, and global reach into more than 200 markets and 162 million active digital wallets -- it's easy to understand why the reaction from our retail clients has been so positive," he stated.
PayPal and Paydiant were introduced at an industry event roughly one year ago. Gardner said this led to some technology partnership discussions.
"Paydiant integrated the PayPal platform about nine months ago," he explained. "More in-depth discussions sort of took off from there. We have a similar, technology-agnostic view of the mobile payments world. Merchants should be able to use any mobile payments technology -- QR codes or NFC (near-field communication). Whatever best suits their business."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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