GoDaddy Inc.’s agreement to purchase Poynt Co., announced Tuesday night, will broaden GoDaddy’s focus on payment services for online merchants and could make the web services company a key player in acquiring traders, according to observers and business leaders.
The deal, in which GoDaddy agreed to pay $ 320 million in cash plus $ 45 million in deferred cash payments over three years for Point, brings to the Scottsdale, Arizona-based company best known for domain registration and other services, a 7-year-old business whose point-of-sale devices and related services directly process more than $ 16 billion annual gross volume of goods. and through resellers. But GoDaddy’s top brass clearly intend to do more than manage Point of sale operations.
Half of GoDaddy’s commercial customers also operate brick-and-mortar stores, chief executive Aman Bhutani said during an investor call on Tuesday evening. This makes Poynt more attractive, he said, and not just because the Palo Alto, Calif., Based terminal company could serve those merchants. Poynt is also a payment facilitator, or payfac. This allows the business to sign more small sellers and port them to Poynt’s merchant account. “We have customers who ask for seamless integration all the time,” Bhutani said on the call. “They want online and offline together.”
Poynt did not immediately respond to a request for comment on the acquisition, which is expected to close in the first quarter of next year. The company was founded in 2013 by Osama Bedier, a former Google and PayPal executive who led the development of Google’s first mobile wallet.
Poynt is also bringing critical payment capabilities at a time when the Covid-19 pandemic is leading many merchants to shift sales from physical point of sale to e-commerce. This means that the acquisition “also gives us an entry point in payments and invoicing,” Bhutani said.
In this sense, the agreement puts GoDaddy into a online-offline domain where companies like Square Inc. and Shopify Inc. operate, says Jared Drieling, senior director of consulting and market intelligence at The Strawhecker Group, a consulting firm based in Omaha, Neb. With Poynt, GoDaddy can offer a combination of physical store and e-commerce options, Drieling says.
“Together, integrated [payment] packaging is a trend, ”he says. “GoDaddy is trying to bridge this omnichannel gap.” With the deal for Poynt, he adds, “GoDaddy has the website tools, and now they have the payment processing capability.”
GoDaddy, which serves some 20 million customers worldwide for its web services, is looking at long-term payments. Senior leaders of the call said they plan to devote the next year to integrating Poynt’s capabilities, with the full benefit of the acquisition coming in 2023. “Our initial focus will be to support our customers at United States, Canada, India and Australia. “Bhutani told stock analysts on the call.” We want to reduce friction between offline and online [commerce]. This is why Poynt is so interesting to us.