Earlier this month Net Element, a NASDAQ-listed provider of mobile payment and value-added transactional service and solutions in Russia and in the United States, announced the acquisition of Russian Internet payment service provider (IPSP) PayOnline.
The deal amounted to some $8 million, reported online tech portal CNews.ru, referring to SEC documents. The closing is still subject to the completion of due diligence and other customary closing conditions.
PayOnline provides online transaction processing services, controlling around 30% of the Russian IPSP market. With its proprietary integrated platform of payment solutions, it serves “more than 10 million active consumers and thousands of merchants” in Russia and neighbouring countries as well as Europe and Asia.
Net Element expects to benefit from PayOnline direct agreements with seven acquiring banks in Europe and five banks in CIS that allow electronic transactions on behalf of foreign merchants. “The acquisition will allow the company to cross-sell and monetize PayOnline’s merchant and reseller relationships, deploy technologies and services in selected emerging markets, and integrate PayOnline’s proprietary technologies into Unified Payments offering in the United States,” Net Element states.
Net Element also expects synergies with its existing property TOT Group. This global mobile payment and transaction processing provider includes Unified Payments, which operates in the US market, Aptito, a cloud-based point of sale payments platform, and TOT Money, a major provider of mobile payment, SMS messaging and mobile billing solutions in Russia.
“TOT Money is already recognized as a leader in mobile payments and commerce. With this synergy between PayOnline, TOT Money and Unified Payments, [we aim to] create a customer solution that covers all methods of online and mobile payments in Russia. Moving forward, we plan to build on this synergy and pursue other additions to complete the ecosystem.”
“Our vision in CIS is to become a leader in transactional services, which includes all technological aspects of the payments ecosystem including all value-added offerings,” commented Konstantin Zaripov, General Director of Emerging Markets for Net Element.
The new group is targeting users in the United States, Russia and other markets.
Net element has its headquarters in Miami, Florida and Moscow, and its developer teams in Russia and Ukraine. The company’s chairman, Kenges Rakishev, is a prominent Kazakhstani businessman involved in several Russian high tech companies.
Net Element also announced that Social Discovery Ventures will become one of its shareholders and pursue “further strategic collaboration.” An investment company and umbrella brand for a variety of Internet and software companies in Russia and other countries, Social Discovery Ventures has stakes in Shocase, Shazam, Anastasia Date, and others.