GreenBox buys a share of Sky’s financial portfolio

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GreenBox POS, the San Diego-based payment solutions provider, has completed the purchase of a substantial stake in Sky Financial & Intelligence for $16 million and 500,000 restricted common shares, the FinTech announced Thursday (April 7).

The shares were previously loaned to the company by its senior management to maintain compliance with the non-dilution provisions specified in the $100 million note issued to the company last fall.

One of Sky’s wallets that has been integrated with GreenBox technology for over a year has grown to over $1 billion in total processing volume. It’s become a big part of the company’s growth in 2021. Recognizing its continued growth, the company purchased the portfolio, Green Box said.

In fiscal 2021, a total of $14.5 million of the purchase price had already been recovered by GreenBox from the tailings received by Sky.

As a result, the money spent on acquiring Sky’s account wallets internally is around $1.5 million in cash. This amount is expected to be recovered in six months or less based on today’s rate produced by Sky’s wallet residuals at GreenBox.

“By bringing a large portfolio of merchant accounts in-house, we are eliminating previously incurred costs of commissions and amplifying our margin profile,” GreenBox President Ben Errez said in a statement. “This allows GreenBox to take ownership of these customer relationships, securing a significant portion of our processing volume base with the benefit of being able to offer additional revenue generating solutions.”

In February, Green Box announced that it had formed a licensing partnership with Cross River Bank to launch its first Bank as a Service (BaaS) initiative.

Also read: GreenBox forms BaaS partnership with Cross River

The agreement allows GreenBox to use Cross River’s infrastructure and access payment rails to open custodial, reserve and operating accounts for its customers, who can then manage these accounts with powered tools by Cross River.

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