Internet transactions company CyberCash announced Tuesday that it will buy ICVerify - a maker of credit card authorization software - for US$16 million in cash and 2.3 million shares of CyberCash stock.
"The beauty of this merger is that it combines two companies that have been converging to the same point from two different sides of the payments industry," said Bill Melton, CEO of CyberCash, in a statement.
ICVerify started out designing software for PC-based cash register systems, to allow merchants to verify credit and debit card purchases. Then it began branching out into software for Web-based merchants.
CyberCash went at the business from the other direction, first developing technology designed to enable merchants and billers to accept secure payments over the Internet. It has since begun looking to offer services to traditional and mail order businesses.
"The merged companies will achieve a critical mass that puts us in the strongest possible strategic position to capitalize on the projected rapid growth of commerce on the Internet," Melton said.
Together, the two companies would make "a very attractive partner" for banks wanting to offer Internet payment capabilities to their customers, he added.
ICVerfiy will become a wholly owned CyberCash subsidiary when the deal is completed in the second quarter of 1998, and F. Thomas Aden will stay on as its president and CEO. Steve Elefant, the company's co-founder and chairman will become vice chairman of CyberCash.
CyberCash's stock rose 12 percent Tuesday to close at $17.88.
