Paypal has dramatically increased its market share in the world of online payment methods with the announcement of the acquisition of TIO Networks earlier this week. TIO Networks is a bill management company that serves customers who pay bills (such as utilities) in cash. It is targeted at people who do not have bank accounts and live paycheck to paycheck, allowing them to pay their bills in cash through special kiosks that are found at Rite Aids and other convenience stores.
TIO has about 6,500 locations across the United States, mainly in poorer areas, and last year dealt with 14 million customers and processed almost seven billion dollars worth of payment.
Up until this acquisition, Paypal’s focus was entirely in the digital world. They became known worldwide as a trusted, safe, and secure service for making purchases online, serving as an extension of a bank account online. While this was an incredibly successful business model, the company was missing out on customers who did not have the luxury of keeping money in an account to access online, and who deal mostly in hard cash. With the 233 million dollar acquisition of TIO Networks, however, that is now set to change, and Paypal will be able to access this sect of the market as well. “There’s a chance to create a bridge for those users into the digital world,” Bill Ready, PayPal (News - Alert) COO told TechCrunch.
Once only a simple payment method for online shopping, this acquisition is the latest effort by Paypal to expand their presence in the digital world. It owns Venmo, a popular app that allows people to quickly and easily transfer money to each other from their bank accounts, as well as software that processes payments for services like Uber and Lyft that are run through an app that is linked to a credit card. Now, with the acquisition of TIO Networks, Paypal is adding hard cash transactions to its portfolio.