PayPal has agreed to buy TIO Networks, a North American multi-channel bill payment processor, to help people worldwide have better access to financial services and to make it easier to pay their bills more affordably.
The agreement means that PayPal will acquire the Vancouver, Canada-based TIO for $3.35 CAD ($2.56 USD) per share in cash or an approximate $304 million CAD ($233 million USD) equity value.
The acquisition means that PayPal can expand its bill payment offerings, which currently only lets people in the US pay those overseas through the Xoom platform.
“By acquiring TIO and integrating bill payment into our global payments platform, PayPal adds another key service in our efforts to become a part of a consumer’s everyday financial life,” said Dan Schulman, president and CEO of PayPal in a release on the TIO website.
“Worldwide, more than 2bn (according to World Bank Global Findex 2014) people do not have affordable access to basic financial services, making it difficult and expensive for consumers to carry out basic financial tasks, including bill payment. TIO’s digital platform, and physical network of agent locations make paying bills simpler, faster, and more affordable. We are excited by the opportunity to extend this valuable service to our existing customers and welcome new billers and customers to PayPal,” he added.
During The Drum’s Do It Day in New York late last year, Accion, a nonprofit that seeks to expand access to financial services around the world, worked with teams from digital agencies Rapp and Syzygy on its challenge to raise awareness of financial inclusion, or addressing the needs of the 3bn people worldwide who are underserved by mainstream financial services. If PayPal’s acquisition of TIO and the pledge to provide affordable access holds up, this will be a step in the right direction to meet the needs of those billions of people.
Hamed Shahbazi, chairman and CEO of TIO, remarked: “We founded TIO to make speed and access part of the bill payment experience for the underserved, and we believe that we have created affordable products to serve the needs of all customers. Our mission fits perfectly with PayPal’s vision to democratize money. As part of the PayPal team, we believe we will accelerate our growth through expanded distribution and continue increasing access to more billers and services.”
According to the release, TIO serves 14 million consumer bill pay accounts and offers convenient solutions for expedited bill payment services to financially underserved consumers. The company has more than 10,000 supported billers and numerous direct relationships with billers, which enable TIO to quickly process telecom, wireless, cable and utility bill payments for TIO’s customers. Using TIO’s approximately 900 operated self-service kiosks, approximately 65,000 retail walk-in locations, and mobile and web solutions, customers can conveniently pay their bills while avoiding the service interruptions and financial penalties associated with missed payment deadlines.
Expected Strategic Benefits of the TIO Acquisition
- Aligned with PayPal’s vision: TIO supports PayPal’s vision of democratizing money by giving consumers more convenient and affordable ways to pay their bills.
- Expands Market Opportunity: TIO accelerates PayPal’s entry into bill payments with 14 million consumer bill pay accounts, approximately 60 million transactions processed in TIO’s fiscal 2016 and a processing network that includes more than 10,000 billers.
- Extends Consumer Value Proposition: PayPal’s intention is to offer TIO’s valuable service to PayPal’s customers within its online and mobile experiences.
Upon closing of the acquisition, TIO will operate as a service within PayPal.