Point-of-sale provider PayCompass and payments processing firm Simpay have come together with the payments technology business Exectras to form a new entity that will offer merchants processing as well as healthcare services.
The companies said last week that they were forming a new venture that will launch on Oct. 1 under the leadership of Exectras CEO Joe Cherry, according to a Sept. 14 press release. The release didn’t disclose financial or ownership terms of the deal.
PayCompass CEO Justin Volrath and Simpay Marketing Vice President Gary Breeds declined to comment on those terms, though Volrath said he would stay on in an Exectras executive role that he didn’t specify.
For 20 years, Cherry has led Exectras, which provides payments processing as well as healthcare and drug benefits, according to his LinkedIn profile. Exectras sells its 360 Health Membership benefit services, alongside the processing, to its merchant clients and their employees. Cherry didn’t respond to a request for comment.
“We'll be able to combine the power of these brands to further help change the payments industry,” Volrath said Thursday by email. He added that the venture would tap “to drive further growth of our payments portfolio through all of our distribution channels.”
Combining their capabilities under the Exectras name, the businesses will seek to sell their services to merchants through independent sales organizations, agents, independent software developers, financial institutions and other partners, the release said.
Independent sales organizations that sell payments processing and point-of-sale hardware through agent networks have long been in consolidation, with smaller players regularly being absorbed by larger industry participants. Volrath acknowledged as much in a July interview, discussing how he built PayCompass after leaving Heartland Payments Systems after it was acquired by the bigger Global Payments.
The consolidation trend may be accelerating now, as artificial intelligence bolsters software vendors building payments into their systems. Volrath noted in an interview this month on The Paycast Network how AI is changing the business and allowing market participants to more easily create software that incorporates payments.
That could contribute to a pricing squeeze for services in the processing industry. There are signs that POS hardware discounting in the market is increasing, according to a report from Baird Equity Research analysts this week who follow the industry. They said they heard as much from attendees at the Western States Acquirers Association industry conference this month.
As the new Exectras venture gets underway, their joint cooperation could fend off some of that margin pressure.
Exectras expects the three entities working together will offer a “unique” set of services that allow partners “to acquire merchants, deepen relationships, improve retention and generate incremental recurring revenue,” the release said.
