E-commerce hosting service iMALL, Inc. (Nasdaq:IMAL) today announced the acquisition of San Francisco based Pure Payments Inc., which provides a critical component for Internet-based credit card processing. Pure Payments offers the electronic payment “gateway” which has been used in iMALL’s integrated e-commerce solution, to interface between e-commerce sites and banks, for credit card transaction settlement.
This announcement is significant because it indicates a vertical expansion of iMall’s business model, and might signal a trend for other e-commerce malls.
A Sweet Deal for iMall
With this acquisition, iMall will be able to increase its revenue-share from each transaction, by adding the payment gateway fees to the charges already paid by merchants to iMall. This deal is especially sweet for iMall because Pure Payments has already undertaken the costs for developing its technology and implementing it on iMall’s systems. Now, based on a proven track record iMall is, essentially, betting on a sure thing.
Benefits for Web Merchants
According to the company, the integration of Pure Payments’ services into the iMALL solution speeds merchants through the store building process by eliminating many time-consuming steps required to integrate payment processing into their Internet storefronts.
“For the first time, the entire process of setting up a commerce-enabled store on the Web is seamless and occurs in real-time without the usual delays and interruptions,” said Richard Rosenblatt, chairman and chief executive officer of iMALL, Inc. “By bringing Internet payment technology in-house, iMALL immediately reduces the cost and complexity of establishing a business online.”
Pure Payments is the payment gateway integrated into MerchantStuff.com, iMall’s e-commerce solution that enables small and mid-sized businesses to conduct full-scale commerce on the Internet. MerchantStuff.com was launched last month by iMALL and First Data Corporation’s (NYSE:FDC) Merchant Services business unit.
According to iMall, the Pure Payments technology supports advanced credit card payment features for online retailers and offers corporate purchase card processing, automatic merchant sign-up, end-to-end system-wide monitoring, and transparent software upgrades.
The transaction, which is expected to close in Mid-March, calls for iMALL to issue 450,000 shares of its common stock in exchange for all of Pure Payments outstanding stock.