Transaction Trends

The payments industry continues to evolve, driven by digitalization, regulatory shifts, and growing consumer expectations. Against this backdrop, mergers and acquisitions (M&A) have maintained a position as a critical lever for growth, innovation, and survival. We’ll provide insights into the current state of M&A in payments, key trends, drivers, and strategic implications that companies should consider.

The number of M&A deals in payments declined during the economic turbulence of 2022–2023, but activity rebounded slightly in 2024, with a further uptick expected in 2025. For reference, TSG’s count of payments industry M&A deals totaled 132 in 2021 at the peak, 114 in 2020, 72 in 2023, 78 in 2024, and as of mid-September 2025, the tally was 63 for the year. Several recent deals signal a new phase of strategic consolidation and capability-driven acquisitions. However, one thing that remains true in payments M&A is that buyers are always on the lookout for a strong merchant portfolio.

Focus on Strategic Plays

While headline-grabbing transactions, such as Capital One’s $35 billion acquisition of Discover and Global Payments’ $22.7 billion purchase of Worldpay, dominate the news, the majority of activity is focused on mid-market and niche deals that deliver specific capabilities, regulatory advantages, grow target market share, or increase geographic coverage. Here are recent examples from several strategic angles:

• Stripe’s acquisition of Orum to leverage its real-time payments platform
• Shift4’s purchase of Smartpay Holdings to further expand its international presence in Australia and New Zealand
• Stripe’s acquisition of Pivvy, a platform that enables companies to build crypto wallets, which deepened their investment in the digital assets space following their $1.1 billion purchase of Bridge in October of 2024
• Fiserv acquired fintech provider Money Money to expand its services in Brazil, primarily around enabling SMBs to access capital

Private Equity Re-Entry

After a cautious period, private equity firms have returned to the payments sector, attracted by tempered valuations and recurring revenue models. Segments like B2B payments, vertical SaaS platforms, and embedded finance are particularly appealing due to their scalability and resilience.

One example in this area is Thoma Bravo’s ~$2 billion outlay to purchase Olo, an ISV serving over 88,000 restaurant locations. Another is Payroc, who has a significant ownership stake held by Parthenon Capital Partners, which supports Payroc’s growth strategies as evidenced by their three acquisitions in less than two months, each of which added value in different areas.

Strategic Implications for Companies

As the M&A landscape evolves, companies should address several strategic considerations:

• Align Deals with Long-Term Strategy: Acquisitions should be anchored in a clear strategic rationale, whether expanding geographic reach, acquiring regulatory licenses, or adding technological capabilities. Opportunistic deals without integration planning risk destroying value.
• Prioritize Regulatory Readiness: Regulatory complexity is increasing, particularly around data privacy, anti-money laundering, and open banking. Acquiring licensed entities can accelerate compliance, but due diligence on regulatory standing is critical.
• Integration Discipline: Many acquirers fail to realize synergies due to poor integration. Companies should develop robust playbooks for technology integration and customer migration to avoid value erosion.

It is an exciting time in the payments industry, and M&A continues to play a significant role. M&A can no longer be viewed as just a growth lever—it’s a survival strategy in a market defined by rapid technological change, regulatory complexity, and shifting consumer expectations. Developments in stablecoins, cross-border payments, AI, and embedded payments should be at the forefront of M&A activity to close out 2025 and into next year. Companies that approach M&A with strategic clarity, technological foresight, and disciplined execution will be best positioned to thrive in this new era.

TRANSACT Tech — NYC, Capital Markets & Payments

Join ETA on October 16 at TRANSACT Tech — NYC, Capital Markets & Payments, where investors and innovators converge to discuss the investment landscape for the payments industry, track smart money flow, and explore the technologies driving growth. Save the date to be part of the conversation.