Healthcare payment technology is becoming an increasingly important area of investment as financial institutions and payments providers look to modernize transactions in a sector that has historically lagged other industries in digital payment adoption. Bank of America’s acquisition of Axia Technologies, also known as AxiaMed, expands the bank’s capabilities in this large and specialized payments market.
AxiaMed’s Payment Fusion platform integrates payment processing with software used by healthcare providers, supporting transactions both at the point of care and online. The acquisition also fits into Bank of America’s broader effort to build its own merchant services platform following the dissolution of its longtime joint venture with First Data.
Just what the doctor ordered. That would be Bank of America’s just announced acquisition of Axia Technologies. Also known as AxiaMed, the firm partners with independent software vendors (ISVs) with a SaaS product called Payment Fusion that focuses on the healthcare sector.
This solution provides an integrated payments platform for healthcare providers both at point of care as well as online. The healthcare industry has been a laggard in payment advancements, especially online and mobile. It does have challenges related to electronic health records (EHR) privacy and security that are now being addressed.
The bigger picture is that healthcare offers a large addressable market for payments players, and Bank of America has a key solutions provider to add to its merchant services business.
The following excerpt from a Bloomberg article reports more on the topic:
Bank of America Corp. acquired the health-care technology company Axia Technologies Inc. as the financial giant continues to build out its products for helping merchants take payments. The deal for the startup, which does business as AxiaMed, comes on the heels of the bank’s decision to dissolve its merchant-services joint venture in favor of building a proprietary platform, Bank of America said Friday in a statement. Terms weren’t disclosed.
“Health care is super important to the bank,” Mark Monaco, head of enterprise payments at Bank of America, said in an interview. “What the AxiaMed acquisition does is really accelerate our road map within the health-care vertical.”
Bank of America opted to dissolve its longtime joint venture with Fiserv Inc.’s First Data last year. Since then, the bank has been building its own platform, which it says uses real-time payments and other digital technologies.
Friday’s deal “further demonstrates the bank’s commitment to payments and the commitment to building a top-flight merchant-services offering for our clients,” Monaco said. “It’s another step in the journey.”
Healthcare represents a substantial opportunity for payments providers because of the size of the market and the continued need to modernize how patients and providers handle transactions. At the same time, healthcare payments present unique requirements involving security, privacy, electronic health records, and integration with the specialized software healthcare organizations use to manage their operations.
Acquiring AxiaMed gives Bank of America access to technology and expertise specifically designed for those requirements. The company’s relationships with independent software vendors can also help embed payment capabilities directly into the platforms healthcare providers already use, creating a more integrated experience for both providers and patients.
The acquisition is also significant in the context of Bank of America’s merchant services strategy. Building a proprietary platform gives the bank greater control over its payment capabilities and creates opportunities to incorporate technologies such as real-time and digital payments into its offerings. Adding a healthcare-focused solution allows the bank to strengthen that platform in a strategically important vertical rather than relying solely on generalized merchant payment services.
As healthcare organizations increasingly adopt online, mobile, and integrated payment options, healthcare payment technology will become an important component of the industry’s broader digital transformation. Bank of America’s acquisition of AxiaMed positions the bank to participate more directly in that shift while expanding its merchant services capabilities.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
