Payments technology company Priority Technology Holdings has signed a definitive agreement to acquire a Banking as a Service (BaaS) platform operator Finxera.

The deal is expected to close in the third quarter of this year, following which, Finxera will operate as a wholly owned subsidiary of Priority.

Finxera’s BaaS platform enables enterprises incorporate banking and payment services into their applications. The API-driven approach enables the integration of various banking aspects into a single platform.

The combination of the two businesses is expected to help in creating a payments and banking as a service platform enabling Priority to offer turn-key merchant services, payment facilitation, virtual banking, e-wallet tools, card issuing and automated payables.

The merged entity is expected to generate a revenue of around $540m, based upon forecasted 2021 financial results of Priority and Finxera.

Priority chairman and CEO Tom Priore said: “The Finxera acquisition accelerates Priority’s position as a market leader in the convergence of payments and banking as a service.

“Our combined platform will be equipped to take and make payments whether on card, ACH, or even blockchain and manage all aspects of payment operations like onboarding, risk, compliance, and client service for our clients.

“Together we will be a one stop-shop for payments and virtual bank account management that today’s merchants and modern software companies are seeking in order to manage and monetise their payment networks.”