Harlow Payments last week appointed Ray Sidhom as its executive chairman. If that name sounds familiar, it’s because Sidhom was the founder of Evo Payments, which was sold to Global Payments for $4 billion in 2022.

Now, he’s teaming up with his former Evo colleague Diego Vazquez, who is Harlow’s CEO, and his son, Chris Sidhom, who is president of the company, to rev up acquisitions.

It’s a familiar playbook in the payments world. Big card payments processors like Global Payments and Fiserv look to scale and sell their services across more merchants so they buy up independent sales organizations that have been scaling themselves as they attract more agents willing to sell processing services.

A very similar transaction played out in 2016 when Atlanta-based Global Payments completed its purchase of Heartland Payments Systems for $4.3 billion.

Now, PayCompass CEO Justin Volrath, a top former Heartland manager, is growing that ISO business. It’s a pattern in the industry that has been happening, Volrath said, and he doesn’t see the wave letting up anytime soon.

Indeed, even larger players in the industry have been buying up more companies this year.

“We're on the precipice of even more of this,” Volrath said on the sidelines of the Midwest Acquirers Association conference in Chicago last week. “You see people selling their company and then sitting out whatever period is contractually necessary, or working for that new entity, and then spinning it up themselves later on. You see it happening over and over again.”

At Harlow, the senior Sidhom played an integral role in one of the company’s first important acquisitions, the purchase of PayFactory this year. 

Now, his son sees an opportunity to avoid some of the “friction” they encountered at times with Evo’s acquisitions and to make investments in other firms without buying the entire business, he said in an interview earlier this month.

“We're trying to right those wrongs from the beginning now by building out a whole financial ecosystem where we're able to upsell the merchants on multiple different products, and it's fully agentic powered,” the younger Sidhom said.

That approach feeds into his strategy of buying between 51% and 70% of a company, whether it’s an ISO or a point-of-sale provider in a particular vertical, and keeping the acquired firm’s leaders onboard, with Harlow offering capital and industry experience.

“I'd rather not do a full roll-up or 100% acquisition of a company, unless they have portability. But even still, I want guys that want to stay on board and take their company to the next level, but want to utilize our platform to help,” the younger Sidhom said.

Tinley Park, Illinois-based Payroc WorldAccess is another company in the payments processing realm swallowing up independent sales organizations. Last year, it bought cloud-based peer LedgerPay as well as payments orchestration firm BlueSnap.

Volrath, who started PayCompass with his wife Nini, listed a handful of reasons that the consolidation continues, as larger entities absorb smaller ones and add value, like bolstering technology aspects. 

Scale matters in the industry, he notes. “There’s power in numbers coming together,” he said. That’s especially true as independent sales organizations, independent sales vendors, point-of-sale vendors and other smaller payments intermediaries face increased regulatory complexity, including new rules from the card networks Visa and Mastercard, he explained.

“As regulation increases, the need for [consolidation] becomes even greater because small players are going to have a hard time staying compliant with some of these, not just regulations, but just changes in compliance rules from the big card brands as well,” Volrath said.

The consolidation also rolls forward because demand in the industry keeps growing, creating market share opportunities for newer businesses, like PayCompass, which was formed in 2020. 

And competition in the industry isn’t a traditional head-to-head combat situation. There’s a “commingling of competitors,” as partnerships form, go-to-market strategies change and acquisitions unfold. For instance, Block’s Square was also a tough rival, but as it’s become more willing to work with partners, Volrath has been pleased to embrace that company, he said.

“There's so much business to go around,” Volrath said. “So, even though they're my competitors today, they might be my partners tomorrow. They might be my coworkers tomorrow. You never really know.” 

Fueling PayCompass’ growth is a turn by the industry to more integrated solutions, and Volrath saw evidence of that evolution at the conference. He said more people approached his booth with an interest in integrating software into their payments systems.

“A lot of people here are talking about integrated payments,” Volrath said. “We're having people walk up who want to talk about software integrations and deepening that relationship between payments and software. We haven't seen the same levels before.”