PayPal buys TIO Networks for $233 million | TechCrunch

The news that PayPal stepped forward and acquired TIO Networks was a surprising one. If someone says they were expecting this, my answer is Bullshit!

No one saw it coming.

There 7 reasons why this deal is so unique, in a good way.

  1. The cost of acquisition for the 14 million customers, is $16.6 per customer for PayPal. That is pretty darn good. In the cross-border space, like Xoom (a PayPal company), the cost of acquiring a customer hovers around the $40 mark.
  2. PayPal is the first company, in the large payments company that has ventured out and addressed the Unbanked market. No one else is going after this segment.
  3. The Unbanked segment is limited in size. In the United States, the number is estimated to be about 86 million people. PayPal just took a sizeable chunk of the market {even though the situation is improving: FDIC: Unbanked households at a record low}
  4. PayPal is able to provide these 14 million customers access to pseudo-banking services via their products like Venmo and Xoom.
  5. PayPal now has access to billing customers, 14 million customers and an agent network of 65,000 locations. This is Yuge! (as Bernie Sanders would say so)
  6. Someone at PayPal must have said, “Boss! What are we doing about the unbanked sector? How are we going to bring them into the financial inclusion and uplift them from unbanked to banked?” – Well with this acquisition, PayPal just did that.
  7. PayPal is now addressing both the banked and unbanked market!

It would be interesting to see, how PayPal will utilize the agent network of TIO Networks now to bring these customers to sign up for Venmo wallets for loading of money, etc.

PayPal has agreed to buy bill payment management company TIO Networks for $233 million in cash. The deal will allow PayPal to gain access to a market of customers who pay their utility and cable…

Source: PayPal buys TIO Networks for $233 million | TechCrunch

This page was last updated on February 27, 2017.

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