When it comes to filling up at the gas pump and making other everyday purchases, consumers are forgoing cash and using credit cards and debit cards. Retailers are upgrading their systems to keep up with changing payment trends, which is driving demand for payment service providers.
In an era in which cybersecurity is a top concern for users of credit cards, retailers and issuers are upgrading technology to help protect customers. Some businesses, such as gas stations, do not have the resources to create their own software and are buying fuel payment providers instead.
Retailers are still racing to migrate to chip cards, which are designed to provide more protection from hacking and identity theft. Gas stations face an October 2017 deadline from the card providers to upgrade to chip cards. Many gas station chains will require outside help to make the transition, putting payment companies in play. In June 2016, Dover Corp.
Meanwhile, the demand for electronic payment processors is rising in general, which is contributing to an uptick in M&A. In July 2016, payment services provider Wex Inc. completed the $1.5 billion acquisition of Electronic Funds Source LLC from Warburg Pincus. Electronic Funds Source provides fleet cards to medium and large sized vehicles, such as tractor trailers. New York-based Wex, which offers similar services to cars and vans, says the acquisition will help expand the company’s customer base.
In November 2014, Norcross, Georgia-based fuel card distributor FleetCor Technologies Inc. (NYSE:FLT)
