Atlanta payment processor First Data Corp. said Wednesday that it struck a deal to acquire Gyft, a Silicon Valley firm that allows consumers to load retailers’ gift cards into virtual “wallets” on their cell phones.
Also on Wednesday, First Data reported a smaller loss and its highest second-quarter revenues since the firm was taken over by New York-based private equity firm KKR & Co. in a 2007 buyout. First Data said its quarterly revenue increased 5 percent compared to a year earlier, to $2.8 billion. The company’s second-quarter loss was $35 million, smaller than its $189 million loss a year earlier.
First Data said its acquisition of Gyft will speed up the growth of the two-year-old firm’s mobile payments service by allowing it to broaden its customer base to small- and mid-sized retailers. Terms of the deal were not disclosed.
The deal follows a potential setback for the startup. In April, Walmart abruptly ended its agreement to allow Gyft to sell Walmart mobile gift cards on its website, less than a month after announcing the pact to offer the cards, according to Coindesk.com, which tracks market news related to bitcoin, the digital currency.
Walmart card had been one of the most frequently requested retailers customers wants to be added to Gyft’s service, according to Coindesk.com. A search on Gyft’s site showed that Walmart cards aren’t currently available.
Gyft has been an outspoken supporter of bitcoins, Coindesk said, offering customers “points” similar to other merchants’ loyalty programs for using the digital currency in transactions.
U.S. federal law enforcement agencies have been investigating whether some bitcoin players use the currency for illegal activities such as money laundering and criminal drug trafficking.
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