In a strategic move to strengthen its position in the blockchain-powered cross-border payments market, Bitmama Inc., a leading player in the space, has announced the acquisition of Payday, a prominent virtual card service provider.
This acquisition comes on the heels of Payday’s successful $3 million seed funding round earlier this year and follows a period of exploring potential sale options. While speculation had swirled around a potential acquisition by Moniepoint, a key investor in Payday, Bitmama’s Changera platform emerged as the winning bidder.
Through this acquisition, Changera aims to consolidate its market leadership by integrating 100% of Payday’s customer base into its existing ecosystem.
Sources close to the deal, while declining to disclose the financial terms, revealed that negotiations commenced recently and are currently nearing completion, with estimates suggesting an all-stock deal valued at “millions of dollars.”
Changera, a pioneering cross-border payments solution launched in 2021, is poised to absorb key personnel from Payday’s marketing, customer service, and engineering departments. The integration process is already underway, with some Payday employees transitioning to the Changera team. While the future role of Payday CEO Favour Ori within Bitmama remains uncertain, given Bitmama’s established leadership and robust technical capabilities, it is speculated that he may transition to a different role or step away from the company.
For Payday’s over 300,000 customers, the transition is expected to be seamless.
According to a senior member of Bitmama’s management, the Payday brand will continue to operate under the broader umbrella of Changera, leveraging the stability and efficiency of Changera’s stablecoin infrastructure. This integration is anticipated to address the operational challenges faced by Payday, including reliance on third-party integrations, which had previously led to issues such as chargeback fraud, disruptions in Mastercard services, and departures of key team members.
This acquisition presents significant benefits for Changera customers, expanding their access to a wider range of digital payment solutions offered by Payday. While current fee structures and terms of service for Payday customers will remain unchanged in the immediate future, the integration promises to unlock new features and enhanced service offerings, leveraging the combined strengths of both platforms.
Looking ahead, Bitmama has outlined an ambitious roadmap, with a key focus on developing an innovative solution to streamline FX transactions for African businesses. Scheduled for launch in the first quarter of 2024, this solution is expected to address a critical market need, facilitating smoother and more efficient cross-border financial interactions for African enterprises.
The acquisition of Payday by Bitmama reflects a growing trend of strategic consolidation within the fintech industry. This trend, exemplified by the recent acquisition of Chaka by Risevest, underscores the increasing need for fintech companies to forge strategic partnerships and pursue acquisitions to navigate market challenges, enhance their competitive advantage, and achieve sustainable growth.
