Mobile M&A Activity Suggests Battle over the Customer Purchase Journey

Navigator Edition: November 2012
By: Patrick Carroll

The increasing number of new mobile commerce products and services is prompting increased M&A activity from established payments players, marketing companies, and social networks.  Industry attention has not only focused on solutions that enable mobile payments, but also on opportunities to broaden consumer relationships through mobile-optimized marketing and communication strategies.  In the past two years, we have observed several vertical acquisitions in the mobile space, suggesting that players are seeking expanded roles in the evolving, mobile-optimized, customer purchase journey.

Figure 1: Customer Purchase Journey


Source: First Annapolis Consulting research and analysis.

Product discovery, the first step in the customer purchase journey, has been supported by search engines, coupon service providers, and marketing companies.  This year, however, we observed some of the largest payments players investing in coupon engines powered by geo-location and/or transaction history.  Additionally, M&A activity in mobile discovery has been driven by relative newcomers to the marketing world:  banks, payment networks, and prepaid issuers.  By investing in this space, these players are positioning to compete with companies such as Google and Groupon for the initial customer contact.

  • 3.9.12 – Green Dot acquired Loopt (targeted coupon service)
  • 5.7.12 – Capital One acquired Bankons (targeted coupon service)
  • 9.7.12 – MasterCard acquired Truaxis (targeted coupon service)

Mobile payment technology has seen the most M&A activity relative to other elements of the customer purchase journey.  Naturally, traditional payments players, networks, and processors continue to invest in this space, but we also have observed social networks and marketing companies seeking a piece of the mobile-payments pie.

  • 1.3.12 – Google acquired TxVia (prepaid processor)
  • 2.18.12 – Groupon acquired Kima Labs (mobile wallet developer)
  • 4.11.12 – Intuit acquired AisleBuyer (in-store shopping tool)
  • 5.30.12 – Groupon acquired Breadcrumb (mPOS software)
  • 7.18.12 – PayPal acquired (mobile payment service)
  • 7.20.12 – Facebook acquired Acrylic Software (mobile wallet developer)
  • 8.16.12 – Braintree acquired Venmo (mobile P2P payments)

Relationship Management
Historically, in addition to their own efforts, merchants have relied on loyalty and marketing service providers for customer relationship management.  Recent M&A activity suggests that while traditional relationship management service providers plan to develop mobile solutions, Facebook and other technology players intend to do the same.  M&A transactions in this space may not enable mobile payments per se, but they do position the buyer to integrate value-added services into a mobile wallet more effectively.

  • 7.12.11 – Google acquired Punchd (mobile loyalty)
  • 1.20.12 – Constant Contact acquired CardStar (mobile loyalty)
  • 4.19.12 – Facebook acquired Tagtile (mobile loyalty)

Figure 2: M&A Driving Expanded Roles Across Mobile Purchase Journey

Source: First Annapolis Consulting research and analysis.
Note:  Length of bar illustrates existing presence in customer purchase journey.  Arrows represent expanding roles.

These vertical acquisitions in mobile commerce indicate that established players are attempting to shift consumer purchase behavior.  The acquisition profiles also suggest that future developments will continue to involve the entire customer purchase process.  As mobile implementations gain traction, we anticipate heightened focus on mobile relationship management (i.e. loyalty, rewards) as providers seek to align with early adopters and attempt to expand their current offerings.

For more information, please contact Patrick Carroll, Senior Analyst specializing in Mobile Commerce & Emerging Payments,

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