In some cases, it’s survival of the fittest. In other instances, it’s two entities deciding that they’d both be better off if they joined forces or – as in the case of Visa – splitting up operations. Such mergers, acquisitions and spin-offs are all of great to interest to Cliq’s Andrew Phillips who has seen the payment card industry (PCI) thrive since his instrumental contributions made in the early 1980s. That’s because Mr. Phillips took an antiquated process of manual check-cashing and developed a technology-based solution that allows for credit and debit card processing at check-out lines across the country.
According to Mergers & Acquisitions magazine, there has been no shortage of transformative M&A deals in recent years. We’ll start with the aforementioned Visa deal that saw Visa Europe LTD. come back under Visa Inc.’s umbrella in 2016. According to the article, the combined forces of both companies could generate $200 million in pre-tax revenue while serving more than 17,000 financial institutions and 40 million merchants. Another recent shake-up in the M&A sector was the deal between Google and Softcard. According to the article, Google’s 2015 deal would mean that its “Wallet” program would come “pre-loaded on Android handsets.” The deal also paved the way for increased security measures surrounding wireless payment processing. The latter aspect is of great interest to Andrew Phillips of Cliq, who realizes that increased instances of swiping payment cards multiple times a day can create a digital breadcrumb train for thieves to try and track.
While Mr. Phillips was instrumental in the creation of Integrated Transaction Services, he would sell the company in 1996 and found Payment Resources International. PRI would eventually focus its operations on Internet-based payments and eventually become one of the first companies to offer full-service online payment solutions. Another industry leader would conduct outreach of its own and enlist the help of Cliq’s Andrew Phillips as this company sought to stem the tide of quitting merchants. This type of synergy exemplifies what productive M&A talks can bring about and it comes as no surprise to Mr. Phillips. Give the advanced in PCI processes and technology, it’s likely the more high-profile deals will occur with definite impacts to consumers. This isn’t a negative, Mr. Phillips points out, as the technology he helped shape now allows customers to swipe their debit card to chip-reading devices attached to smartphones and tablets. From there, federal oversight of secure payment systems go into action ensuring that card and card holder information is kept safe and secure.
Sometimes it pays to be the little fish in a big pond. Don’t believe us? Just ask Andrew Phillips of Cliq how his nimble boutique payment-processing company has been able to thrive in a sea of mega-processors who could never claim to have their client’s best interests at heart. When it comes to innovative payment industry operations, there’s always the looming possibility of mergers and acquisitions on the horizon. There may be times when a sight unseen offer to take over comes in; there are also proactive CEOs of boutique card-processing companies looking to make lateral moves and improve the operations of cohorts. The latter was certainly the case for Cardflex’s Andrew Phillips.
According to PrePaidPress.com, mergers and acquisitions when it comes to companies in the pre-paid and automated payment industry are often “strategic moves” driven by “explosive growth, competitive pressure, shakeouts due to external factors, like general economic conditions.” The various roles that Cliq’s Andrew Phillips has filled in the past three-plus decades are a testament to the ever-evolving industry. In 1996, he sold Integrated Transaction Services to a mid-sized company and used the capital to found Payment Resources International (PRI).
As as a response to the manual check-cashing processes that still existed in the payments industry — that he knew could benefit from the emerging technology that would automate many of those legacy solutions — PRI focused on emerging technical solutions and became a payments related development company. Using its newly-developed state-of-the-art technology to accomplish Internet payment solutions and automated clearing house (ACH) processes, PRI created Transaction Central. Eight years later, CardFlex’s Andrew Phillips would once again sell the company with an eye toward what the next step in enhancing the payments industry would bring. During this period, and at the behest of TransFirst’s CEO, Mr. Phillips would be appointed as this company’s president of Independent Sales Services as this Division of TransFirst had become its largest division and was losing market share fast, in hopes of righting the ship there. As he will tell you, this company was shedding thousands of merchants per month. By the time he left TransFirst, Mr. Phillips was responsible for a total turnaround and he’d use skills learned here to launch Cardflex – which would go on to become Cliq. Andrew Phillips, who is clearly no stranger to mergers and acquisitions in the automated payment card field, says that such competition is healthy.
The real question though is how do these industry shifts affect consumers? In short, they don’t because it’s the companies that sign on to an automated payment company that are gauging the benefits. As Cliq’s Andrew Phillips has said before, “Whether it’s a customer’s credit card or ACH transaction or an employee waiting for payroll – or virtually any other type of electronic payment – processing happens instantly. But it doesn’t happen by itself.”