Proposed Smartpay Acquisition Highlights Rising Interest in Australia’s Digital Payments

Australia's payments sector is in the midst of a rapid transformation. 

Cash now accounts for just 13% of in-person transactions, down from 69% in 2007, according to the Reserve Bank of Australia, while contactless cards and mobile wallets are used by more than 90% of Australians for everyday purchases. 

This shift has created an attractive environment for global fintech companies seeking new growth markets.

One of the latest developments drawing both local and international attention is the proposed acquisition of Smartpay—a merchant payment solutions provider in Australia and New Zealand—by US-based Shift4 Payments. 

The move, still in its early stages, signals how highly the Australian payments market is valued on the world stage and underscores the strategic importance of the Asia-Pacific region for fintech expansion.

The Asia-Pacific payments market is forecast to grow at a compound annual growth rate (CAGR) of 12% between 2024 and 2028, driven by the rise of e-commerce, mobile wallet adoption, and cross-border trade. With the region already accounting for over 50% of global digital transactions, Australia sits in a prime position as a mature yet innovation-driven hub.

If the acquisition proceeds, it could reshape competition, influence technology adoption, and impact both merchants and investors across the country. 

This article examines the details of the deal, the market forces behind it, and what it could mean for the future of payments in Australia.

The Deal in Brief

In early 2025, US-based payments technology provider Shift4 Payments confirmed it had submitted a non-binding proposal to acquire 100% of Smartpay Holdings Limited. 

Smartpay operates primarily in Australia and New Zealand, supplying electronic point-of-sale (EPOS) terminals and merchant services, with a strong footprint among small and medium-sized enterprises (SMEs).

The proposal is still in its preliminary phase, meaning it is subject to multiple conditions before any transaction can be completed. 

These conditions include:

• Comprehensive due diligence on Smartpay's operations, customer base, and technology stack.
• Approval from Smartpay shareholders.
• Clearance from relevant regulatory authorities, including the Foreign Investment Review Board (FIRB) in Australia.

While the companies have not disclosed all financial details, early estimates from market analysts suggest the deal could value Smartpay at over AUD $180 million, a figure that reflects the strategic value of gaining immediate access to the Australian and New Zealand merchant networks.

Industry watchers note that if completed, this acquisition would mark Shift4's first major entry into the Asia-Pacific region—a market where global payment processors are increasingly competing for market share amid growing digital payment adoption.

Who is Smartpay?

Smartpay Holdings Limited is a merchant payment solutions provider operating across Australia and New Zealand. 

Founded in New Zealand and publicly listed on the NZX and ASX, the company has built its reputation by supplying electronic point-of-sale (EPOS) terminals and offering transaction processing services to a diverse range of businesses.

In Australia, Smartpay's primary focus is on small and medium-sized enterprises (SMEs), including retail shops, cafés, hospitality venues, and service providers. 

The company's offering typically includes:

• EFTPOS terminals with contactless and chip-and-PIN capability.
• Integration with various point-of-sale systems.
• Competitive transaction fee structures aimed at smaller merchants.
• A recurring revenue model based on terminal rental and service contracts.

Smartpay has positioned itself as an alternative to larger incumbents such as the major banks and established EFTPOS providers like Tyro. One of its strengths lies in maintaining direct relationships with merchants, allowing it to tailor solutions and provide ongoing support without relying heavily on third-party resellers.

As of its most recent financial reporting, Smartpay services thousands of active terminals across Australia, with continued growth driven by the country's increasing shift toward cashless transactions. 

Its local presence, combined with operational experience in New Zealand, makes it an appealing target for any global payments company looking to establish a foothold in the region.

Who is Shift4 Payments?

Shift4 Payments is a US-based payments technology company listed on the New York Stock Exchange under the ticker FOUR. 

Headquartered in Allentown, Pennsylvania, the company provides integrated payment processing, point-of-sale solutions, and e-commerce platforms to a wide range of industries, including hospitality, retail, food service, e-commerce, and gaming.

The company's core offering centres on cloud-based payment platforms that combine hardware, software, and transaction processing into a single ecosystem. This approach enables merchants to manage in-person, online, and mobile transactions through one provider, while also offering features such as fraud prevention, customer loyalty integration, and advanced reporting.

In recent years, Shift4 has expanded aggressively beyond its North American base through a series of acquisitions in Europe and Latin America. 

These deals have been part of a deliberate strategy to enter new markets quickly by acquiring existing payment networks rather than building them from scratch.

Key milestones in Shift4's global strategy include:

• Acquiring point-of-sale software providers to expand industry-specific capabilities.
• Securing partnerships with major e-commerce platforms to extend its reach.
• Entering emerging markets with high digital payment adoption potential.

The proposed acquisition of Smartpay would represent Shift4's first significant step into the Asia-Pacific region, a market it has publicly identified as a priority for future growth. 

By leveraging Smartpay's established merchant network and regional knowledge, Shift4 could accelerate its international presence in a mature but still evolving payments landscape.

Australia's Digital Payments Landscape

Australia has emerged as one of the most advanced digital payments markets in the world, with high consumer adoption rates and a regulatory environment that supports innovation. 

The Reserve Bank of Australia (RBA) reports that cash accounted for just 13% of in-person payments in 2022, down from 69% in 2007. This rapid decline has been matched by the rise of contactless card payments, which are now used by more than 90% of Australians for day-to-day transactions.

Several factors are shaping the country's payments ecosystem:

• Contactless and mobile wallet dominance – Tap-and-go payments have become the norm, while platforms such as Apple Pay, Google Wallet, and Samsung Pay continue to grow in market share.
• E-commerce growth – Australia's online retail sales exceeded AUD $63 billion in 2024, representing a significant share of total retail spending.
• Merchant technology upgrades – Small and medium-sized enterprises (SMEs) are investing in modern EFTPOS systems to meet consumer expectations for speed and convenience.
• Decline of cheques and cash – The Australian Payments Network plans to phase out cheque processing entirely by 2030, further accelerating digital adoption.

The Asia-Pacific region as a whole is projected to see a 12% compound annual growth rate (CAGR) in digital payments between 2024 and 2028, according to Statista, with Australia positioned as a mature but innovation-driven hub within this landscape.

For global fintech companies, Australia presents both an opportunity and a challenge: a market with high penetration of digital payment methods but one that is also competitive, with established players such as Tyro, Square, and the major banks. Any new entrant needs to differentiate through pricing, technology, and service.

Strategic Fit of the Deal

At first glance, the proposed acquisition of Smartpay by Shift4 Payments appears to be a complementary match in terms of business model, customer focus, and technology offering. 

Both companies cater primarily to small and medium-sized enterprises (SMEs), a segment that values cost-effective, reliable, and easy-to-use payment solutions.

Key areas of alignment include:

• Hardware + Software Integration – Smartpay's strength lies in its established EFTPOS terminal network and merchant relationships, while Shift4 specialises in cloud-based payment platforms and integrated point-of-sale systems. The combination could provide merchants with both advanced software capabilities and robust payment hardware.
• Recurring Revenue Models – Both companies operate on subscription or service-based revenue streams, creating predictable income and long-term customer retention.
• Focus on Merchant Relationships – Smartpay's direct-to-merchant approach aligns with Shift4's strategy of building loyalty through tailored solutions rather than relying solely on resellers.
• Cross-Border Potential – By acquiring Smartpay, Shift4 would gain immediate access to the Australian and New Zealand markets, while potentially enabling Smartpay's existing merchants to process international transactions more seamlessly.

However, the strategic benefits are not guaranteed. Integration challenges—such as aligning technology stacks, meeting local compliance requirements, and maintaining customer service levels—can complicate cross-border acquisitions. 

Its also worth mentioning market competition in Australia's payments sector is already strong, meaning any combined offering would need a clear value proposition to win over merchants from existing providers.

Potential Impact on Merchants and SMEs

For Australia's small and medium-sized enterprises (SMEs), the proposed acquisition of Smartpay by Shift4 Payments could bring both opportunities and uncertainties. 

While any actual changes would depend on post-acquisition strategies, several potential impacts stand out.

Possible Benefits:

• Expanded Technology Offerings – Integration of Shift4's cloud-based platforms could give Smartpay merchants access to enhanced analytics, loyalty programs, and e-commerce tools.
• Improved Cross-Border Capabilities – Merchants serving international customers may gain more seamless currency conversion and global payment processing options.
• Competitive Pricing Pressure – Entry of a new global player could encourage price competition, potentially benefiting merchants through lower transaction fees or better service packages.

Potential Risks:

• Service Changes During Transition – Mergers often involve system upgrades or changes to pricing models, which could cause short-term disruption for merchants.
• Loss of Localised Support – If operational decisions shift offshore, some merchants may be concerned about reduced responsiveness or local expertise.
• Contract Adjustments – Existing merchant agreements could be revised, requiring careful review to ensure terms remain favourable.

Overall, while many SMEs could benefit from a broader suite of payment solutions and international connectivity, the transition period will be a key factor in determining whether the acquisition is viewed positively by the merchant community.

Investor Considerations

For investors, the proposed acquisition of Smartpay by Shift4 Payments offers a mix of potential upside and cautionary factors.

• Short-Term Market Reactions - Announcements of takeover bids from international buyers often generate positive short-term movements in the target company's share price, particularly if the acquirer has a strong financial position. Early market speculation has placed Smartpay's potential valuation at more than AUD $180 million, a premium that reflects its established merchant base and recurring revenue model.
• Long-Term Value for Shift4 - For Shift4, acquiring Smartpay could be a strategic foothold in the Asia-Pacific region, giving access to a mature digital payments market with strong growth prospects. Long-term value creation would depend on how effectively Shift4 can integrate Smartpay's infrastructure and leverage its merchant relationships to introduce new services.
• Broader M&A Trends - The deal aligns with a wider global trend in fintech mergers and acquisitions, where established players seek rapid market entry through acquisitions rather than organic expansion. The Asia-Pacific market's projected 12% annual growth in digital payments over the next four years makes it an attractive target for such strategies.
• Risks for Investors - Potential risks include regulatory delays, integration challenges, and the competitive pressure from existing Australian providers such as Tyro, Square, and the major banks. Any post-acquisition changes to merchant pricing or service levels could also influence customer retention and, by extension, long-term profitability.

Regulatory and Approval Process

Any foreign acquisition of an Australian payments provider is subject to a structured approval process, with oversight from several regulatory bodies.

• Foreign Investment Review Board (FIRB) - The FIRB will assess the proposed acquisition to determine whether it aligns with Australia's national interest. This review considers the potential impact on competition, market stability, and the security of critical infrastructure. Given that payment processing involves sensitive financial data, the FIRB's scrutiny is expected to be thorough.
• Data Privacy and Security - Australia's Privacy Act 1988 and the Consumer Data Right (CDR) framework impose strict requirements on how financial data is stored, accessed, and transferred. Any cross-border transfer of customer data resulting from the acquisition would need to comply with these laws, ensuring adequate safeguards are in place to prevent misuse or breaches.
• Competition Regulation - The Australian Competition and Consumer Commission (ACCC) may also examine whether the deal would substantially lessen competition in the payments sector. While the market includes strong incumbents such as Tyro, Square, and the major banks, regulators will assess if the acquisition could lead to market concentration that disadvantages merchants.

Potential Roadblocks

• Prolonged regulatory review timelines.
• Conditions imposed on data storage and localisation.
• Requirements for maintaining certain operational functions in Australia.

Approval is not guaranteed, and any delays could affect transaction timelines and integration planning. For both companies, navigating the regulatory process will be a critical step in determining whether the deal proceeds.

Broader Implications for the Payments Industry 

The proposed acquisition of Smartpay by Shift4 Payments reflects a broader shift in how global fintech companies are approaching market expansion. 

Rather than relying solely on organic growth, many established players are buying their way into strategically important regions where digital payments adoption is accelerating.

Global M&A Trends in Fintech

• Companies like Stripe, Adyen, and Square have expanded their geographic reach through acquisitions, partnerships, and technology integration deals.
• Payment providers are increasingly targeting markets with high digital penetration but room for innovation, such as Australia, Singapore, and parts of Southeast Asia.
• Cross-border acquisitions also allow companies to diversify their revenue streams, reducing dependence on a single region.

Competitive Dynamics in Australia

• Australia's payments market is competitive, with established domestic and international providers.
• If the Shift4–Smartpay deal proceeds, it could spark further M&A activity as competitors look to strengthen their positions or accelerate innovation to maintain market share.
• Larger incumbents may respond by enhancing merchant service packages, investing in new payment technologies, or adjusting pricing structures.

• With the Asia-Pacific region projected to account for more than half of all global digital transactions by 2028, early positioning in markets like Australia could provide a platform for wider regional expansion. 

For merchants and consumers, increased competition may lead to better technology, lower costs, and more diverse payment options.

Wrapping up

The proposed acquisition of Smartpay by Shift4 Payments is more than just a corporate transaction—it's a signal of the growing strategic value of Australia's payments market in the global fintech landscape. 

With contactless payments now the norm and e-commerce continuing to grow, Australia offers an attractive mix of high digital adoption and ongoing innovation opportunities.

For merchants, the deal could bring new technology, expanded payment capabilities, and potentially more competitive pricing. For investors, it highlights the Asia-Pacific region's importance as a driver of future fintech growth. 

However, regulatory scrutiny, market competition, and integration challenges will all play a role in determining whether the acquisition delivers on its promise.

Regardless of the final outcome, this move underscores a broader trend: international payment providers are increasingly looking to Australia not just as a market to enter, but as a strategic hub for regional expansion. In a rapidly evolving payments industry, this is a development worth watching closely