There’s a lot of excitement (and hype) at the moment around smart payment solutions, not least in relation to the potential of NFC now that mobile operating systems and handsets are finally supporting the technology. As a result, VC money for startups in the space has been coming thick and fast, while the likes of Silicon Valley-based Jumio and Boku have been getting plenty of attention.
It’s in this context that today’s news is particularly interesting: Two UK startups, sQuid and ACT, which have largely been flying under the radar, are merging and with it not only will they supply 85% of the UK’s smart cards and payments, but look pretty well poised to exploit the growing opportunity around NFC.
Applied Card Technologies (ACT), which provides smart payment solutions for the transit and tourism industry, is merging with digital payments company sQuid. The new combined company, Smart Transactions Group, is valued at £53.3 million and claims to be the new European leader in “smart transactions”.
But it’s Smart Transactions Group’s future plans that should make others in the industry take notice. Not only does the company plan to expand internationally but its shared roadmap includes the launch of NFC and mobile phone-based solutions, with the pedigree to back this up.
To date, ACT has specialised in “visitor destination management systems”, retail reward programmes and ITSO transit solutions for trains, trams and buses, while sQuid is best known for its low cost pre-pay eMoney platform – the sQuid smartcard – used in the education and retail sectors. Together, their customer base accounts for 500,000 payments processed and 50 million “transit transactions” every month.
Combined revenues aren’t too shabby either: approximately £9.5 million (pro-forma) for 2011.