Dive Brief:

• Payments giant Fidelity National Information Services (FIS) this week announced the acquisition of Atlanta-based embedded payments fintech Payrix, which serves small and medium-sized businesses, according to a news release.
• Jacksonville, Florida-based FIS bought Payrix from an investor group led by Dallas-based Blue Star Innovation Partners and Providence Strategic Growth. Terms of the deal were not disclosed; the company was acquired during the fourth quarter of 2021, per a FIS news release. A spokesperson for FIS could not be reached for comment on the acquisition.
• On Tuesday, FIS reported fourth-quarter adjusted net earnings of $1.2 billion, up 16% year-over-year, and adjusted net earnings of $4.1 billion for the year, a 19% increase over 2020. Revenue for the fourth quarter of 2021 was $3.7 billion, up 11% year-over-year. For the whole of 2021, revenue was $13.9 billion, an 11% increase over 2020.

Dive Insight:

As FIS has looked to accelerate its e-commerce offerings for businesses, the acquisition allows the payments company to incorporate Payrix’s embedded finance technology for small and medium-sized businesses. 

"Payrix is a small but really highly strategic acquisition for us," FIS President Stephanie Ferris said during Tuesday’s earnings call, "... in terms of accessing an e-commerce market we haven’t been in before, but also really unlocking the value of FIS as we start to be able to deliver embedded financial services out to this marketplace."

Since it acquired Worldpay in 2019, FIS has looked to continue growing its strategic payments offerings in the global e-commerce space, Ferris said in the release. "Bringing the Payrix capabilities inside FIS enables us to continue our journey of serving e-commerce as well as platform companies," she said in the release.

The move gives FIS an entrance into the growing marketplace segment, "where it has historically lacked a presence," Cowen Equity Research analysts said in a Tuesday commentary on the results.

Beyond embedding payments, Payrix — founded in 2015 — offers digital and automated onboarding, compliance, billing and settlement, per the release; FIS looks to combine those with Worldpay’s global payment capabilities, assisting businesses in scaling globally.

FIS said the acquisition wasn’t expected to be material to its financial results shared Tuesday. Payrix could add about $10 to $20 million in revenue for FIS, Baird Equity Research analysts estimated in a Tuesday commentary on the acquisition.

Last year was among the busiest for acquisitions in the payments space, and 2022 is off to an active start. The payments sector is evolving rapidly, and large companies considering whether to build out a capability themselves or acquire another company that’s already done the work may opt for the latter in the interest of time.

FIS rival Fiserv last week said it was acquiring the remaining ownership stake in core banking software firm Finxact for $650 million. Fintech Amount bought Linear for $175 million, and global payment platform NMI acquired IRIS in January.