Leading e-commerce services provider
Digital River, Inc.
) recently expanded its Digital River World Payments solution
with the addition of
) full card acceptance services.
Digital River offers a full range of payment processing
services to clients through its subsidiary Digital River World
Payments. These services include multiple payment methods, fraud
management, tax management, cloud-based billing and other payment
For American Express, Digital River World Payments will
operate as a single commercial, technical and operational
connection for online merchants offering American Express as a
payment option on their e-stores around the world.
The agreement provides an opportunity of expansion for Digital
River along with consolidating its card acquiring services and
strengthening its position as a leading turnkey e-payment
Digital River aspires to be a cloud-commerce expert driving
client revenue for software and digital products developers,
high-tech product and computer manufacturers, and video game
Hence, the company is undertaking significant steps to broaden
its payments portfolio, empowering merchants with more payment
options and creating new opportunities for them to capture online
market share internationally.
To strengthen its portfolio, Digital River acquired LML
Payment Systems Inc. for $3.45 per share or $108.2 million in
LML Payment Systems offers financial payment solutions
including credit card processing, online debit, electronic funds
transfer, automated clearinghouse payment processing and
authentication services to e-commerce and traditional
The company also provides selected transactions to third-party
processors and banks for authorization and settlement.
Management believes that the acquisition will complement the
company's existing product portfolio and will enable Digital
River to offer its online payment services to businesses of all
Meanwhile, for 2013, the company is likely to face some
headwinds due to macroeconomic conditions, client attrition and
additional necessary ramp up in investments to ensure an updated
Digital River forecasts that overall softness in the economy,
especially in Europe coupled with recent decline in PC sales will
make it challenging to post a growth in revenue. The company saw
some client attrition in 2012 and expects the same in 2013 along
with a decline in supporting business revenue.
The market for online commerce solutions is highly competitive
with bigwigs like
Akamai Technologies, Inc.
) to name a few.
Hence, we maintain a Neutral recommendation on Digital River.
Our recommendation is supported by a Zacks #3 Rank, which
translates into a short-term rating of Hold.
ACCENTURE PLC (ACN): Free Stock Analysis
AKAMAI TECH (AKAM): Free Stock Analysis
AMER EXPRESS CO (AXP): Free Stock Analysis
DIGITAL RIVER (DRIV): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis
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