In an effort to catch up with Square and Paypal, payment processing giant First Data has been quietly increasing its presence in the mobile payments market. As the largest credit card processing company in the U.S. with over one trillion dollars in card transactions passing through its network each year, First Data is looking to throw its weight around — even if its competitors do have a head start.
Perka is First Data’s second acquisition in October and follows its purchase of Andreessen Horowitz-backed mobile payments startup, Clover, two weeks ago. With its acquisition of Clover, First Data has been looking to ramp up its support for small businesses, particular around point-of-sale (POS) infrastructure.
The move enables First Data to give customers that are using its old school credit card terminals an opportunity to upgrade without having to turn to the Squares and PayPal Here’s of the world. And, today, by adding Perka’s subscription mobile loyalty services to the mix, First Data is beginning to build out the other side of its fledgling in-store payment solution.
While terms of the Perka deal were not disclosed, sources tell us that the acquisition price was slightly lower than what it had paid for Clover, which we have confirmed in a 10K filing (page 71) to be a net-cash consideration of $34.1 million.
Alan Chung, Perka’s co-founder and CEO, said that the startup’s 8 product developers and 28 total employees are still with the company and that Perka will continue to operate autonomously out of its Portland, Oregon and New York offices.
In its two years as an independent company — with less than $1 million raised in angel funding — Perka has manage to scale to 50 U.S. states and several countries, catering to customers that range from local coffee shops to modern retailers like The Melt.
Since launch, Perka introduced two loyalty subscription services, which essentially bring those “buy 10, get 1 free” punch cards we all know and love online — and to your mobile device. Through its mobile apps, Perka allows customers to connect with their favorite local merchants and receive recognition for their patronage in an increasing tier of “perks.”
On the other side, Perka allows merchants to tap into customer intelligence, and connect with loyal users them via social media even when not in the store. As to why Perka opted to partner with First Data, the founder says that, in the end, it’s all about scale.
By teaming up with the largest payment processor in the U.S., Perka will be able to achieve scale faster than it would have on its own, as well as tap into the company’s financial resources, brand recognition and its more than 6 million credit card terminal customers in 34 countries.