Square Isn't The Only Payment Processor Shifting Its Business Model

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VANTIVE PUSHES INTO 'INTEGRATED PAYMENTS' WITH $1.65B MERCURY DEAL: Vantiv, the U.S.-based payment processor and the top domestic PIN debit merchant acquirer, this week announced a $1.65 billion deal to buy Mercury Payment Systems, a fast-growing payment processing start-up known for its cloud-based merchant and point-of-sale services. With the deal, Vantiv hopes to expand further into "integrated payments," which are accounting and customer relationship tools for small and mid-sized business that complement traditional card processing services. Vantiv executives predicted in an investor briefing that the Mercury deal, which is expected to close by the end of the quarter, would double Vantiv's revenue share from integrated payments in three years, from 15% to 30%.

The payment processors are battling to differentiate themselves by offering new software-based merchant services. Last week, JP Morgan Chase also rolled out a new merchant dashboard, and processing giant TSYS announced a deal to distribute the service-rich ShopKeep point-of-sale software. (We interviewed Shopkeep's CEO recently). "The emergence of integrated payment technology at the point-of-sale delivers a differentiated merchant experience," Vantiv CEO Charles Drucker said in a statement announcing the deal to buy Mercury.

STUDY - SMALL BUSINESSES IN EUROPE WARMING UP TO MOBILE TERMINALS: A new study backed by Visa Europe finds that over a quarter of small business owners in Europe who don't currently accept card payments are interested in adopting a mobile point-of-sale terminal in the next six months. That could make mobile terminals - stand-alone devices or those that transform smartphones and tablets into payment terminals - the catalyst for a significant uptick in payment card adoption, Caroline Drolet, head of mobile point-of-sale at Visa Europe, said in a statement. "Small businesses have been traditionally reluctant to embrace card payments but across Europe that is changing."

LOOP EXPANDS TO ANDROID: LoopPay, the mobile wallet that transmits payment data to magnetic stripe payment card readers, will today announce an Android version of its payment app, which launched on iOS in February. "This is just another step, and we're taking many steps toward getting more Loop-ready solutions out there," LoopPay CEO Will Graylin tells us. Currently available as a $39 key fob that pairs with the app, Loop uses a magnetic coil to transmit payment card data. Users simply hold up the fob to a merchant's card reader in order to pay. Soon, a LoopPay iPhone 5/5s charge case will be available, and the company is hoping to convince manufacturers to build Loop's transmitter into handsets. Still in its early stages, the company numbers its users in the thousands - but Graylin stresses LoopPay's advantage in that virtually all merchants are already equipped to accept LoopPay-powered transactions.

RICHARD BRANSON BETS ON BITCOIN WITH BITPAY FUNDING ROUND: In the largest funding round announced to date for a Bitcoin startup, BitPay received $30 million in financing. The round was led by Index Ventures, but included Richard Branson, the chairman of Virgin Group, according to the announcement. Atlanta-based BitPay is a processing service for Bitcoin, allowing merchants to accept the digital currency. Among the company's clients is Branson's commercial space travel company, Virgin Galactic.

Time Inc. tapped two promising payment apps for its "10 NYC Startups To Watch" list yesterday: Cover, the restaurant payment app whose co-founder we interviewed last month, and Venmo, the peer-to-peer payments app whose skyrocketing transaction volume our analyst has tracked closely.

After several years of experimenting with contactless payments, London's transportation authority has announced that the city's buses will no longer accept cash fares.

Veracity Payments Solutions, the Atlanta-based payment processor and merchant acquirer, announced that it is buying Vanco Services of Minnesota. The newly merged companies will be renamed Vanco Payment Solutions as part of the deal, and Kevin Lee has been tapped as the new CEO.

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