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Published 09 January 2013 17:07, Updated 14 January 2013 07:10
Pure Commerce CEO Daniel Lavecky Louise Kennerley
Sydney-based payments company Pure Commerce, which targeted customers in Asia because it struggled to get business from Australian banks, has been bought by US-based payments giant Euronet Worldwide as a way to expand into the world’s fastest-growing region.
Pure Commerce, which provides foreign exchange capability in 16,000 ATMs across Korea, as well as in all the point-of-sale terminals run by Korea Exchange Bank, had signed the deal with Kansas-based Euronet last week, after almost five months of exclusive talks, Pure Commerce chief executive Daniel Lavecky said on Wednesday. He declined to value the part-cash, part-stock transaction.
The tie-up with a larger company will allow Pure Commerce, which will continue to operate under its own name, to expand its customer range rapidly, Lavecky says.
“They have 300 bank customers,” he says. “We want to sign up 50-100 of those over the next five years. That’s going to translate into a much larger room for increasing revenues. Pure Commerce will be dominant player in the next three to five years globally in cloud-based foreign exchange payment solutions.”
Euronet, which provides payments services to banks, systems for processing pre-paid purchases, such as mobile phone vouchers, and the world’s third-largest money-transfer network, Ria, wants to use Pure Commerce to cross-sell payment services to institutional customers who currently buy from only one or two of its divisions, Lavecky says.
“It does have customers in Asia,” he says. “But given that it’s got three different business units, they have customers that only use one business unit, but not all three. There’s a lot of cross-pollination available. That’s where there’s opportunity.”
In a statement, Euronet says the acquisition allows the company to offer industry-leading currency conversion payment and multi-currency acquiring services to global, local and online banks, acquirers and retailers.
“Pure Commerce’s cloud-based services allow banks and financial institutions to significantly reduce costs, while delivering new products in record time,” the company says.
Pure Commerce, which had revenue of $US15 million last year, was first approached by Euronet about 18 months ago. Lavecky’s company hired US investment bank Jefferies to run a formal sale process, as there were about 20 interested parties. They narrowed the list of potential partners to three about eight months ago, then entered into exclusive talks with Euronet in early September.
“One of the things that makes a transaction of this nature successful is the cultural fit,” Lavecky says. “It’s peas in a pod.”