UK utility bill payments services provider PayPoint is set to go mobile with the acquisition of mobile payments specialist Verrus Mobile Technologies in a cash deal worth up to £33m ($50m).
"Verrus is an important acquisition for PayPoint and a key development in our strategy of broadening our payment services capability," said PayPoint chairman David Newlands.
In 2001, Canada-headquartered Verrus became North Americas first service provider to enable motorists to pay for parking by phone using a credit or debit card.
The service, operated under the Verrus and PayByPhone brands, is today in contract or in trial in over 100 towns and cities including five London boroughs, Vancouver, Miami, Washington DC, Boston, the San Francisco Bay area and Paris. Over twom consumers have registered for the service.
The 11-year-old companys largest contract is with the City of Westminster, London, where it is the main provider for on-street parking payment. According to PayPoint, since Verrus introduction in Westminster, parking revenues have risen by 45% and costs cut by 20% as a result of reductions in theft, elimination of lost revenue from out of order meters, the ability to introduce more flexible charging and increased yields per space.
Verrus solution enables consumers to link a payment card to their mobile phone and then to make payments using their mobile phones with no need to disclose payment card details after first registering. Voice, text, internet, smartphone and mobile internet applications are all supported. In addition, the solution provides parking authorities with live and historic data and real-time communication to devices carried by enforcement officers.
However, despite a growing acceptance of its services, Verrus had a poor year financially in 2009, reporting a loss of some £500,000. PayPoint expects the transaction to have a positive impact on its earnings in the second year after acquisition, assuming current rates of interest.
According to PayPoint, North American and European parking markets are estimated to generate revenue of $65bn annually and offer significant opportunity for increased penetration. PayPoint is also eyeing extension of Verrus service into areas such as bike rental (currently in trial), taxis and ticket reservations.
PayPoints existing core services cover cash and internet payments of utility and other bills for 6,000 clients including 5,200 online merchants, primarily in the UK, as well as in Ireland and Romania.
PayPoint annually processes about 550m transactions totalling some £9.3bn via 22,300 terminals located in local shops and 2,000 off-premises ATMs in the UK.