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Return of the MAC: Bipin Shah and company seek $72M for payments startup

Financial services developer and Main Line resident Bipin Shah has big plans for the future of the industry. Shah is raising $72 million as outlined in a preliminary prospectus filed with the Securities and Exchange Commission at the very end of 2010. Shah's Universal Business Payment Solutions Acquisitions Corporation (UBPS) of Radnor is now awaiting SEC response to the filing of a public offering of 12 million shares. The proposed blank check corporation has a stated mission, according to the prospectus, of "acquiring one or more 'platform' companies in the payment processing industry," although no specific company has been identified for takeover.

Shah, Chairman and CEO of UBPS, has been an innovator in the financial services sector. He spent his entire career in the financial transaction business. At CoreStates Financial Corporation in the 1980s, he was the architect of the Money Access Center (MAC) ATM system. Other technologies to his credit include PIN-protected point-of-sale technology, pay-at-the-pump for gas stations, and a surcharge-free ATM network.

Now, Shah and partner Peter Davidson have turned their industry experience to the acquisition and combination of three subdivisions of financial services companies: payroll processing; debit and credit card transaction processing; and prepaid plastic. According to the UBPS prospectus, while three major companies control 85 percent of the payroll market, the remainder is comprised of 1,800 small companies with an aggregate market capitalization in excess of $39 billion. Shah and Davidson "believe that these 1,800 smaller payroll companies are primed for consolidation." Next, Shah et al turn the high beam on the "approximately 1,000 different organizations that sell and service the credit and debit card needs" of merchants, of which "the smaller processors are primed for consolidation," as well. Finally, UBPS aims to capture some of the profit associated with a projected $200 billion in purchases by prepaid debit, gift, payroll and government benefit cards. Davidson, reached by phone, says, "We have quite a bit of interest from what we call the initial investors, but we cannot start to raise funds until the SEC approves UBPS." While Davidson agrees that UBPS is a speculative investment, he cites his 30 years and Shah's 40 years in the payment space.

Shah and Davidson met while both were at CoreStates; Davidson joined Shah at Genpass until its acquisition in 2005, and currently serves as Chief Financial Officer of Brooks FI Solutions, LLC, in addition to his post as Chief Administrative Officer for UPBS. EarlyBird Capital, Inc. is UBPS Acquisitions Corporation's underwriter, and is hoping to sell the anticipated 12 million share offering to raise first-stage money for this startup.

Source: Universal Business Payment Solutions Acquisitions Corp. Prospectus
Writer: Sue Spolan

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