PayPal Acquires Canadian Fintecher TIO Networks

 PayPal has gained ground  in the underbanked bill payment space by acquiring the North American processor TIO Networks for $233 million, according to a release. Founded in 1997 and still led by its CEO founder, Hamed Shahbazi, Vancouver-based TIO Networks serves underbanked customers utilizing an online and mobile network of 900 unmanned kiosks and across 65,000 retail walk-in locations. The company has 10,000 supported billers and processed more than $7 billion in consumer bill payments in fiscal 2016 from 14 million consumer bill pay accounts.

“By acquiring TIO and integrating bill payment into our global payments platform, PayPal adds another key service in our efforts to become a part of a consumer’s everyday financial life,” PayPal CEO and President Dan Schulman stated. “Worldwide, more than 2 billion people do not have affordable access to basic financial services, making it difficult and expensive for consumers to carry out basic financial tasks, including bill payment. TIO’s digital platform, and physical network of agent locations make paying bills simpler, faster, and more affordable.”

The all-cash deal represents a premium of 22.6% to the 20-trading day volume-weighted average price from 9 January when negotiations commenced.

When TIO’s employees join PayPal, PayPal will increase its Canadian presence, with the addition of TIO’s Vancouver team to the existing PayPal Canada team, which is based in Toronto and located at the MaRS Discovery District. PayPal Canada is a founding member of the BC Technology Industry Association’s Vancouver FinTech Cluster.

“Together, PayPal and TIO envision a future where paying a bill is as simple as PayPal already makes it to send money to friends or buy something online. I’m looking forward to welcoming the talented and inspirational TIO team to the PayPal family,” Schulman added in a LinkedIn post. “The acquisition is expected to close in the second half of 2017, subject to certain closing conditions, including TIO shareholder approval, expiration or early termination of the applicable pre-merger waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt of certain consents relating to TIO’s money transmitter licenses and court approval in British Columbia, Canada.”

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