PayPal has agreed to acquire the Toronto-based bill payment firm TIO Networks, a major player in the North American bill pay market, for $233 million. Currently, the bill pay market has $3.9 trillion transactions each year, according to data from ACI Worldwide. TIO will help PayPal grow its market share in the bill pay market.
TIO can also help PayPal gain access to a new segment of customers who do not have affordable access to traditional financial services. These “underserved” customers are living paycheck-to-paycheck and many do not have bank accounts. The acquisition will allow PayPal access to customers who currently pay their bills at unmanned kiosks, and allow customers to pay bills in a simpler, faster, and more affordable manner. Although no specifics on integration plans have been provided, PayPal has been working on bringing cash transactions to PayPal digital accounts (PayPal Cash), which makes it more convent to covert cash into digital payments.
While I think that it is a great idea to help the “underserved” community and make bill pay more convenient and affordable, I am reluctant to believe that this community has the financial and technological resources to use this future product.
Reference: https://techcrunch.com/2017/02/14/paypal-buys-tio-networks-for-233-million/
Reference: http://www.businessinsider.com/paypal-acquires-tio-in-bill-pay-push-2017-2