Ingenico’s $190 million purchase of payments systems provider Paymark has been cleared by the Commerce Commission.
The deal, which would give the French company, which is also in the payment solutions business, control of more than three-quarters of the country’s eftpos terminals, has been under the regulator’s scrutiny since July.
Today the commission said it was satisfied the acquisition would not substantially lessen competition in any of the markets it assessed.
“This is a complex market that is evolving with the introduction of new payment systems technology,” chairman Mark Berry said. “On balance, we considered that there were sufficient constraints in the market to ensure that Ingenico is motivated to keep the market for payment terminals attractive to merchants.”
“Attempting to prevent or deter access by its terminal competitors to the Paymark switch would risk rivals building their own payment switch or encourage merchants to take up new payment technologies. We concluded that Ingenico would likely be incentivised to seek to maximise the volume of transactions that Paymark processes to avoid this risk.”
Paymark’s owners – ANZ Bank New Zealand, ASB Bank, Bank of New Zealand and Westpac New Zealand – had been looking for a buyer for two years.
As part of the deal, they will keep their existing services agreement with Paymark. Ingenico signalled plans to integrate its old terminal assets with those of Paymark and Bambora in the broader Pacific region to offer point-of-sale and terminal management, in-store and online processing capabilities, and analytics and loyalty services.
Ingenico is a global provider of payment terminals and digital payment services. Paymark’s primary business is to provide processing services that route eftpos, e-commerce, and debit and credit card payment transactions to the appropriate financial institution – a service known as a payment switch. Paymark is not active in the supply of payment terminals.
The commission’s initial concerns had been that the combination of Paymark’s switch with Ingenico’s terminal business might have reduced competition for the supply of payment terminals.