TIO Networks to Buy Softgate Systems Inc.

by Ben Jackson 0

TIO Networks Corp. announced this week that hit has agreed to buy Soft Gate Systems Inc., in what is described as an arm’s length agreement valued at $31 million.

The transaction is transformational and positions TIO as the largest North American provider of walk-in bill payment services, through its wholly owned subsidiaries which would include Softgate, as well as making TIO one of the leading providers of payment processing and receivables management to national and regional utility, wireless, and cable bill issuers in North America. With the addition of Softgate, TIO will have an augmented national platform from which to provide extensive non-bank financial services to the unbanked, under-banked, and unhappily banked millennial population.

TIO built a business on offering kiosk-based and point-of-sale bill payments aimed primarily at helping the unbanked and underbanked populations. The combination with Softgate will give it a broader distribution network and build on its position across the United States and Canada.

While it would seem that this market would be replaced by electronic bill payments, the 2013 Federal Reserve Payments Study showed that from 2009 to 2012 the walk-in bill payment market in the United States Grew from 247.4 million to 285.6 million. The value of those payments increased 7.2% over the same time period from $35.6 billion to $43.8 billion. So, there is still opportunity in this market.

Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group

Read the Press Release Here.

Read Mercator’s evaluation of the walk-in bill payments market here.