Pay By Touch Auctions off ATM Direct, BioPay Paycheck Secure
Bankrupt Solidus Networks Inc. has sold two of the three major subsidiaries that it identified this winter as non-core assets, Digital Transactions News has learned. Next up is a March 14 auction of the core biometrics payment business of Solidus, which does business as Pay By Touch.
On Thursday, a management-led group called Phoenix Check Cashing Inc. announced it had purchased Pay By Touch’s check-cashing unit, BioPay Paycheck Secure. The purchase price was $4.2 million, a spokesperson for San Francisco-based Pay By Touch says. Pay By Touch bought BioPay in early 2006 for $82 million.
Herndon, Va.-based Phoenix is headed by Jon Dorsey, who was an executive with BioPay before Pay By Touch owned it and most recently was vice president and group products manager for the Paycheck Secure unit. The lead financing provider for the acquisition is WWC Capital Group, a Reston, Va., equity fund. Baltimore-based Woodbrook Capital also is a major investor.
“We are very excited about re-energizing this business,” Dorsey said in a news release. “We look forward to leveraging the product’s legacy as the market leader in fingerprint authentication of check-cashing transactions. This is a great product that now has the resources to deliver on its full potential.”
Although not announced publicly until yesterday, the sale was the result of a Feb. 22 auction in U.S. Bankruptcy Court in Los Angeles, which is overseeing Solidus’s reorganization. The judge handling the case, Thomas B. Donovan, approved the transaction Feb. 29.
Also sold at a Feb. 22 auction under bankruptcy court supervision was ATM Direct, a provider of technology to bring PIN-based payments to the Web. The buyer was an Atlanta company called Accullink LLC, which paid $600,000 and assumed responsibility for some contractual liabilities and unexpired leases. Pay By Touch bought ATM Direct a little over three years ago for $30.5 million.
Little information about Accullink was available late Thursday. Records in the Georgia Secretary of State’s office list an entity organized in Delaware and registered Jan. 10 in Georgia as Accullink Inc., with an address in the Atlanta suburb of Smyrna. The chief executive is Nandan Sheth and the corporate secretary is Ashish Bahl. The latter founded and was chief executive of Atlanta-based Harbor Payments Inc., a provider of payment applications for large companies that American Express Co. bought in 2006. Sheth was Harbor’s chief operating officer. Sheth is chief executive and Bahl is secretary of two other companies with the same Smyrna address and registered in January, Accullink Technology Inc. and CarrierLynk IT Services Inc.
The remaining non-core asset to be sold is Pay By Touch Payment Solutions, which comprises the assets of the former CardSystems Solutions Inc., a big merchant processor that nearly went out of business after a massive breach of its databases compromised 40 million card accounts—the biggest on record until the TJX Cos. Inc. breach disclosed in early 2007.