Wall Street is continuing to absorb financial technology startups, with JPMorgan Chase agreeing to buy WePay in its first major fintech acquisition.
Silicon Valley-based WePay, which was founded in 2008, uses application programming interfaces (APIs) to deliver payments-as-a-service, without impacting the user experience designed by software developers.
JPMorgan said the technology will “ease friction” for both software providers and merchants by seamlessly integrating payments into the software commonly used by small businesses. Terms of the deal were not disclosed but The Wall Street Journal reported the price was more than the $220 million valuation WePay reached in a 2015 funding round.
“With WePay, Chase is taking the work out of payments for both our business clients and the software providers who serve them,” Matt Kane, CEO of Chase Merchant Services, said in a news release. “We are powering payments for growth, so businesses can accept payments instantly, get paid faster, and never lose a sale.”
“And we’ll give [independent software vendors] a payment facilitator-like experience without the overhead or increased fraud risk,” he added.
JPMorgan has a network of more than 4 million small-business customers. While software-enabled payments are growing at four times the industry average, embedding payment acceptance still remains a “pain point” for many software providers,” the bank said.
As CNBC reports, financial institutions have been expressing growing interest in buying out fintech startups rather than acquire minority stakes. In August, credit card processing company Vantiv bought payments processor Worldpay for $10.4 billion. Ally Financial, BlackRock, and Goldman Sachs have also made fintech moves.
WePay’s software is currently used by crowdfunding website GoFundMe, cloud-based accounting firm FreshBooks, and online marketer Constant Contact. According to Finance Magnates, it started out from processing payments to compete against the likes of FirstData and Global Payment but has shifted to focus on crowdfunding.
“Being part of the Chase family — with its global capabilities, brand and scale — will help us better support our growing list of platform partners and the businesses they serve,” said Bill Clerico, founder and CEO of WePay.