PayPal has acquired mobile payment company Paydiant in an effort to expand its breadth of mobile solutions for retailers. Although terms of the deal have not officially been disclosed, a report from Re/code indicated that the acquisition will cost PayPal up to $280 million.
Paydiant provides mobile wallet and digital coupon services for organizations such as Subway, Harris Teeter and Capital One. The company’s customer list also includes the Merchant Customer Exchange (MCX), which will release its CurrentC mobile wallet app in 2015.
With the acquisition, PayPal is positioned to bolster its relationship with MCX, which is fighting to compete with other mobile wallet providers such as Apple Pay, Google Wallet and Samsung Pay.
The deal also will help PayPal expand to more apps as it spins off into its own publicly traded company later this year.
“Using Paydiant’s platform, our merchant partners can now create their own branded wallets to accelerate mobile-in-store payments and drive consumer engagement through mobile payments, loyalty, offers and the prioritization of preferred payment types, such as store branded credit cards and gift cards,” said Dan Schulman, President and CEO Designee of PayPal. “Similar to PayPal, Paydiant’s technology-agnostic approach means that merchants can use any mobile payment technology — QR codes or NFC — that best suits their business.”
Paydiant also is expected to benefit from the PayPal acquisition, as it will help expand its reach into more than 200 markets and 162 million active digital wallets. The white-label wallet platform provider is aiming to offer value-added benefits to its customers, including: Risk management; 24/7 customer support; loyalty programs; mobile offers and an open payments architecture that supports all mobile operating systems, according to a company statement.
The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in late March or April 2015. As per the transaction, all of Paydiant’s 70 employees will join the PayPal team.