Dunedin has taken a stake in Global Processing Services (GPS) in a deal that concludes a three-year search for a suitable investment in the payments sector.
UK private equity house Dunedin invested in a £44 million financing of GPS, a payments processor, citing its potential for international expansion.
Oliver Bevan, a partner at Dunedin who takes a seat on the GPS board alongside fellow partner Dougal Bennett as part of the deal, says: “We want to support GPS to expand internationally. It is already well established in the UK and across Europe, but we want to help it drive into new regions, starting with Asia. GPS works with some of the biggest names in the sector, including Visa, MasterCard, Apple Pay and Google Pay. Its technology allows clients to provide their users, whether via cards or other technologies, with real-time updates on their transactions.”
This is functionality that consumers increasingly expect as a matter of course, and one that card issuers with older legacy systems have struggled to deliver on their own.
Joanne Dewar, deputy chief executive at GPS, says: “Before GPS, the issuer/processor area of the payments ecosystem didn’t support innovation and took way too long to launch new products to market. GPS was designed to support product additions or changes with configuration only or with API, reducing time to market and placing more control with the fintech client and, by extension, the cardholder.”
Despite increasing competition and innovation squeezing margins, the deal shows payments remains an attractive and profitable business, with platforms increasingly competing not just on the technology and functionality but on the structure of pricing.
Dewar says: “People don’t really believe that anything is ever free. They understand that good service comes with an associated cost, however what they want is transparency so they know exactly what they are paying. Some of the fintechs in the payments space have been very aggressive on pricing which can appear too good to be true. If it seems that way, it probably is.”
By contrast, she notes, other platforms have laid bare their fee structure, and Dewar believes there is a genuine movement towards products that offer this transparency, as part of an offering that is more socially responsible.
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