PayPal rival SumUp makes $317m acquisition to take on competitors

SumUp has acquired marketing start-up Fivestars as part of a push to take on its rivals PayPal and Square.

The UK-based payment processor said it was purchasing Fivestars for $317 million in a mix of cash and stock.

The marketing company helps online merchants set up rewards schemes and promotions for customers, the new deal giving SumUp access to Fivestars 12,000 customers and $3 billion in sales per year.

SumUp was founded in 2012 and is best known for mobile credit card readers used by SMEs to accept payments.

The fintech brand also provides the ability for merchants to set up their own ecommerce storefronts and has over 3 million merchants signed up across Europe, the US and Latin America.

READ MORE: PayPal launches “super app” offering everything from savings accounts to crypto trading

SumUp’s main rivals are iZettle, which was bought by PayPal in 2018 and Jack Dorsey’s Square.

The company expects its rivalry to intensify as it expands in the US.

“I would say where we focus and excel is truly on the smallest merchants,” SumUp US managing director Andrew Helms told CNBC.

“We’re not looking to go into enterprise, we’re not going more upstream.”

Helms pointed out that the US market has seen a number of shifts into the spending patterns since the start of the pandemic, with non-physical transactions, invoicing and payment links all seeing a rise in usage.

“[However} we’re probably underestimating the shift back to in-store and brick and mortar,” he added.

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