ACI to Purchase Western Union's Bill Pay Business for $750 Million
Both companies process more than 15 billion bill pay transactions in 2018 and those numbers are expected to climb.
Electronic payments company ACI Worldwide has announced plans to acquire Western Union’s bill pay business for $750 million in cash, according to a press release from the two companies this week.
ACI said it plans to combine Western Union’s Speedpay bill pay arm with its own UP Bill Payment platform into a unified platform that will support billions of transactions. The acquisition is intended to expand ACI’s bill pay business in the consumer finance, insurance, healthcare, higher education, utilities, government and mortgage sectors, ACI said.
“This acquisition reinforces ACI’s ‘any payment, every possibility’ vision and accelerates our ability to capitalize on the growing global payment transaction opportunity over the next five years. It presents a great opportunity for ACI to strengthen and add scale to our On Demand business, and provides fuel for growth and increased R&D investment which will benefit both ACI and Speedpay customers,” ACI Worldwide Phil Heasley president and CEO said.
“We are excited to welcome the talented Speedpay team into the ACI family. With decades of proven success, the ACI and Speedpay teams have a deep understanding of bill payments, and the combination of our portfolios delivers an unmatched value proposition.”
The U.S. bill pay market is growing at “steady mid-single digit rates” and it processed more than 15 billion bill pay transactions in 2018, according to the companies. Growth in mobile payment adoption, real-time payments and digital subscription billing is driving much of the expansion, they said.
For Western Union, selling its bill pay arm gives it a chance to concentrate on international payments.
“Divesting the Speedpay business allows us to concentrate our resources on our cross-border money movement strategies and monetize a non-core asset for our shareholders,” Western Union Hikmet Ersek president and CEO said. “Our strategy remains focused on expanding our digital services, leveraging our platform to unlock new cross-border, cross-currency payments opportunities, and generating additional operating efficiencies.”
In 2018, Western Union’s Speedpay business generated more than $350 million in revenue, the companies reported.
ACI said it expects to close the deal by the end of June.