ADP is looking to expand its current paycard offering by purchasing Global Cash Card, a provider of payroll and contract employee payments.
Through the purchase, ADP said it is gaining ‘industry-leading’ proprietary digital payment processing platform that will enable ‘innovation and added value services’ for clients and their workforces. The business will also ‘a large diversified client base that has shown consistent growth’, according to an announcement.
The company is looking to exploit Paycards by integrating Global Cash Card with its existing paycard offer, the ALINE Card.
Following the integration, ADP will manage more than four million accounts on a single platform.ADP said the purchase will also enable it to offer digital accounts and flexible payment offerings across its existing base of more than 700,000 clients.
Carlos Rodriguez, president and CEO of ADP, said, “ADP pays 1-in-6 workers in the US and our clients look to us as the market leader to offer solutions that help them better engage with their entire workforce. The acquisition of this established and profitable company helps us innovate around the essential service of delivering pay, and will enable us to provide new tools to consumers that help them manage their finances.”
Global Cash Card, an Irvine, California-headquartered business, offers solutions for both Form W-2 employees and Form 1099 contractors, as well as online tools that help customers manage their digital accounts.
The tools include online bill pay, rewards plan enrolment, multi-purse capability for providing secondary account holders access to a portion of available balances, and an expense manager.
PayTech investment on the decline
Despite ADP looking to taking advantage of the paycard growth, global PayTech investment declined in 2017 according to data by FinTech Global.
In terms of deal activity, Q2 2017’s 30 deal count represents a slight improvement on the opening quarter of the year, which received 28 deals. However, it was still some way off the 46-deal haul seen in the same quarter of last year, the 16-deal reduction represented a 34.8% fall in deal activity YoY.
The data also suggests that decline in investments will continue as 58 funding rounds took place in the PayTech space in H1 2017, only a third of 2016’s total making.
It is likely that PayTech’s deal activity is going to continue its YoY fall, as 58 funding rounds took place in the PayTech space in H1 2017, only a third of 2016’s total making. There was a fall in deal activity of 26.3% from 2015 to 2016.
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