As it was announced on Tuesday, JPMorgan Chase, a leading global financial services firm, is to buy online payments provider WePay in order to provide its 4 million small businesses clients with new payment technology. The terms of the deal aren’t fully disclosed yet.
The merger of two companies working in distinct areas is expected to provide new opportunities to software providers and merchants. These include instant onboarding for small businesses, instant payments for merchants, and the ability for software platforms to serve as payments facilitators or third party payments processors. In other words, using WePay solutions, the bank will allow its customers to integrate payments into the software they use to make the process of transaction easier and faster.
As Matt Kane, CEO of Chase Merchant Services, commented on Tuesday:
“With WePay, Chase is taking the work out of payments for both our business clients and the software providers who serve them. We are powering payments for growth, so businesses can accept payments instantly, get paid faster, and never lose a sale.”
Founded in 2008 in Palo Alto, California, WePay now represents a promising Silicon Valley company offering payments capabilities to business platforms. WePay’s technology uses application programming interfaces (APIs) to integrate payments functionality with software. The company already works with such software platforms as crowdfunding website GoFundMe, cloud-based accounting firm FreshBooks and online marketer Constant Contact.
Bill Clerico, founder and CEO of WePay, stated about the deal with JPMorgan Chase:
“Being part of the Chase family — with its global capabilities, brand and scale — will help us better support our growing list of platform partners and the businesses they serve. We’re excited to marry the distribution of one of the world’s largest and most respected financial institutions with the best technology and talent in Silicon Valley.”
The value of the acquisition wasn’t revealed, but according to the Wall Street Journal report, the price was estimated above $220 million. That amount was reached by WePay in fundraising two years ago, in 2015.
JPMorgan has already successfully partnered with two more fintech startups – Bill.com and On Deck Capital Inc. for its small business unit.
The growing interest of financial institutions to fintech startups can’t stay unnoticed. Let’s remember payment processor Wordpay purchased by a credit card processing company Vantiv in August or the intention of PayPal to invest billions in a payments company.
In Europe, London has recently proved its status of “hotspot” for venture capitalists in fintech industry. Investors have poured more than $1 billion into fintech companies across the UK, including those in London, since the beginning of the year. Fintech companies in London have already raised more than $980 million accounted for 90 percent of all fintech investments in the UK as a whole.
Rajesh Agrawal, London’s deputy mayor for business, commented on the topic:
“The fact that we have seen over £1 billion worth of venture capital investment into London fintech companies since the EU referendum vote offers further proof that global investors still believe London will remain a leading fintech hub for many years to come.”