The acquisitions just keep on coming at PayPal. The deal du jour for the global e-commerce giant involves Hyperwallet. As the following TechCrunch article reports, PayPal will take advantage of Hyperwallet’s market reach for payments that target gig economy workers.
PayPal announced today that it’s paying $400 million in cash for Hyperwallet, an 18-year-old, Bay Area-based company that helps people and small businesses receive payments for products and services that they sell, including through the vacation rental platform HomeAway and Rodan & Fields, the multi-level marketing company that specializes in skin care products and employs an army of consultants to sell toners and the like.
Hyperwallet interlinks cash networks, card schemes and mobile money services with domestic ACH networks around the world to enable what it characterizes as “disruptively priced” and, as crucially, compliant mass payments.
Hyperwallet was founded by Lisa Shields, an MIT-trained engineer who originally launched the company in Vancouver, where she last year founded a second company called FI.SPAN, which is an API management platform that aims to allow banks to quickly deploy new business banking products. Hyperwallet has been led since 2015 by CEO Brent Warrington, who previously served as CEO of a company called SecureNet Payment Systems that was acquired.
As for why PayPal acquired it, it says it enhances its ability to provide payment solutions to e-commerce platforms and marketplaces around the world, noting in a release about the deal that marketplace sales accounted for more than 50 percent of global online retail sales last year.
So the M&A department has been working overtime at PayPal for the last few years, as the company has not only pursued acquisitions, but established many partnerships across the payments ecosystem, especially to gain more market volume in exchange for lower transaction fees. The Hyperwallet acquisition comes on the heels of a much larger, and yet to be completed, deal for European payments company iZettle. PayPal has been going after global markets and categories that show rapid growth such as the gig economy. The Hyperwallet deal fits both of these criteria perfectly.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group