The Commerce Commission has granted clearance to French payment terminal company Ingenico Group to acquire New Zealand payments system operator Paymark.
In considering the $190 million acquisition, the Commission focused on whether the combination of Paymark’s switch with Ingenico’s terminal business might reduce competition for the supply of payment terminals.
Commission chair Dr Mark Berry said the regulatory body was satisfied the acquisition would not substantially lessen competition in any of the markets it assessed.
“This is a complex market that is evolving with the introduction of new payment systems technology," Berry said. "On balance, we considered that there were sufficient constraints in the market to ensure that Ingenico is motivated to keep the market for payment terminals attractive to merchants."
Attempting to prevent or deter access by its terminal competitors to the Paymark switch would risk rivals building their own payment switch or encourage merchants to take up new payment technologies, he said.
"We concluded that Ingenico would likely be incentivised to seek to maximise the volume of transactions that Paymark processes to avoid this risk," he added.
The Commission has also concluded that the acquisition would not affect competition in the supply of digital payment services.
Paymark’s primary business is to provide processing services that route eftpos, ecommerce, and debit and credit card payment transactions to the appropriate financial institution - commonly referred to as a payment switch.
In New Zealand, Ingenico wholesales its terminals via a network of resellers. In addition to its terminal business, Ingenico provides digital payment services to merchants through its subsidiary Bambora.
Paymark, jointly owned by ANZ, ASB, BNZ and Westpac, also operates a digital payment business called Click and provides an online debit payment service called Online Eftpos.