Last week, the FinTech firm Worldpay was acquired by US firm Vantiv for $10 billion. The acquisition is the result of a multi-party bid that saw interest from the likes of banking giant JP Morgan Chase.
Worldpay “provides secure payment services for small and large businesses, including payments online, card machines and telephone payments”. The acquisition is the first of many to come within the banking and financial services industry. With many of the numerous emerging technologies set to revolutionize the banking industry (ranging from blockchain to artificial intelligence) coming to maturity (or at least, beginning to be available commercially), banks will shift interest to the startups developing these technologies from a passive investor role, to acquiring these firms and incorporating their capabilities as critical components of their infrastructure.
In the US, the changing political climate is facilitating this transition. Regulators from the new administration are creating a positive environment for acquisitions within this market. According to Richard Bove, “The Treasury Department has released the first in a series of white papers defining the Administration’s position on banking. It suggests changes in approximately 50% of the 370 rules that were put in place to regulate the industry. The bulk of these changes are viewed positively by the sector.” JP Morgan Chase’s consideration of the Worldpay acquisition is indicative of this fact.
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