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October 8, 2019

UK Markets Authority Raises Alarm Over Payments Buyout

Bottomline is ‘obligated to destroy’ or segregate sensitive data

By CBR Staff Writer

The Competition and Markets Authority (CMA) has intervened in the £12.5 million acquisition of payment software firm Experian Payments Gateway (EPG) by hte US’s Bottomline Technologies, saying it poses a competition risk.

Last May the CMA issued Bottomline with an enforcement order as it began an investigation into the firm’s buyout of EPG.

Both companies provide payments software that is used by organisations to operate payrolls, pay suppliers and submit direct debits.

The Experian Payments Gateway is software that facilitates faster payment processing for organisations that handle high volumes of payments or have complex processing requirements. The gateway also runs software that can handle UK’s Bankers’ Automated Clearing Service or Bacs Direct Debits.

Joel Bamford, senior director of mergers at the CMA said today: “Our investigation has shown that other options for the EPG business were available which could have resulted in more competition in the future. We are therefore concerned this transaction could lead to prices going up or less development of current software.”

Bottomline EPG Merger Could Be Prohibited

Bottomline was already the largest supplier of Bacs payment software, as well as Faster Payments System Direct Corporate Access (FPS DCA) software to business and banks. Following the acquisition of EPG it has now acquired its largest rival and a firm widely relied on by substantial business entities.

On the 2 of August the CMA issued Bottomline Technologies with an ‘Unwinding Order’ which states that while it investigates the merger Bottomline cannot access or use confidential information belonging to EPG to target EPG’s customers with Bottomline products or services. The unwinding order also means that Bottomline is ‘obligated to destroy’ or segregate any existing physical or electronic materials that hold sensitive business information belonging to EPG.

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Bottomline has until the 14 of October to come up with a solution that abates the concerns of the CMA, if no solution is found then the CMA will move to an in-depth Phase 2 investigation, which can lead to a merger being prohibited.

In an emailed statement to Computer Business Review, Bottomline Technologies told us that: “The businesses remain segregated,” and that their “focus remains on maintaining business as usual for our customers, and that we continue to offer our full support to the CMA with their inquiry.”

See Also: Five Questions with… Snowflake Co-founder Benoit Dageville

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