Commerce Commission grants clearance to Verifone to acquire Smartpay

The parties to the proposed acquisition (among other things) both supply “terminals” to retailers that are used to accept instore electronic payments.

The Commerce Commission has granted clearance to Verifone New Zealand (Verifone) to acquire the assets used by Smartpay Holdings Limited and its subsidiaries to operate the Smartpay business in New Zealand (Smartpay) (the proposed acquisition).

The parties to the proposed acquisition (among other things) both supply "terminals" to retailers that are used to accept instore electronic payments. The Commission's focus was on the impact of the proposed acquisition on the competition for the supply of terminals to small and medium-sized retailers.

Chair Anna Rawlings said the Commission is satisfied that the proposed acquisition is unlikely to substantially lessen competition in any New Zealand market.

"Although we consider that the merging parties are competitors, the presence of competing suppliers, with the ability to expand, is likely to constrain Verifone in its ability to raise prices or reduce service quality," said Ms Rawlings.

"Post-acquisition, Verifone would continue to face competition from terminal resellers and Windcave, while Ingenico also imposes a competitive threat."

The Commission also considered whether the proposed acquisition might give Verifone the ability and incentive to foreclose rival terminal suppliers by refusing to supply terminals or payment processing services.

Ms Rawlings said that "the Commission was satisfied there are sufficient alternatives for terminal suppliers such that Verifone would be unlikely to engage in such conduct."

A public version of the written reasons will be available shortly on the Commission's case register.