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Payments infrastructure provider Thunes has agreed to acquire Tilia, a licensed US money transmitter focused on online gaming, allowing it to leapfrog time-consuming regulatory approvals in a key market.
Thunes, a B2B network based in Singapore, last week announced a deal to acquire Tilia, a payments firm that holds money transmitter licences in 48 US states.
Working with partners including AWS and J.P. Morgan, Tilia offers payment acceptance and payout services to the online gaming sector. It specialises in enabling the use of real-world money for in-game purchases, and enabling payouts for money earned within games and virtual worlds.
Tilia also offers digital ledger services for the creation and management of in-game items, tokens and currencies.
When the transaction is completed, Thunes will be able to offer Tilia's current payment services to US merchants. This includes card payment acceptance through Visa, Mastercard, American Express, JCB and UnionPay.
In addition, US merchants, including Tilia's current customers, will be able to connect to Thunes’ global network of more than 4bn bank and 3bn mobile wallet endpoints.
Rebecca Hackworth, director of corporate communications at Thunes, told Vixio that the main reason for the acquisition is so that Thunes can inherit Tilia’s portfolio of licences.
“This allows us to go to market and to accelerate our growth in the US much faster,” she said. “Before this, we had to either work with partners, or the customers that we work with had to have their own licences.
“The acquisition means that we can do business much more easily in the US, and it's much easier for our prospects and customers too, so we can really scale our growth here.”
Leapfrog
Typically, to build a portfolio of money transmitter licences across the US, a firm would have to go from state to state and acquire each one separately.
This would be a time-consuming and costly process, Hackworth said, requiring new hires in legal and compliance departments and potentially encountering delays along the way.
In Tilia’s case, the “regulatory groundwork” has already been done over a period of about seven years thanks to the support of its parent company, Linden Lab.
Linden Lab was formed in 1999, and in 2003 it created "Second Life", an online game that pioneered the use of real-world money for in-game purchases and payouts.
In 2019, Tilia was incorporated as a payments holding company, and was specifically tasked with handling legal and regulatory requirements for Second Life's in-game economy.
Second Life is still popular more than 20 years after its launch, and Tilia currently processes an average of 1.6m transactions per day between players.
Hackworth said that Tilia has “unique experience” in integrating emerging technologies into payment solutions, and Thunes will look to take advantage of this once the acquisition closes.
She also said the acquisition will reduce Thunes’ reliance on banks in the US market, helping to reduce settlement times and eliminate intermediaries in its payment chains.
Floris de Kort, CEO of Thunes, said the acquisition demonstrates Thunes’ ambition to expand its footprint in the US. “Furthermore, Tilia’s deep expertise in online gaming, virtual worlds and token-based payments will greatly accelerate our growth into that fast-growing industry,” he said.
Subject to regulatory approval, after the acquisition closes, Tilia will be rebranded as Thunes and will remain based in San Francisco.
The Tilia acquisition adds to Thunes’ rapid recent growth. Last year, it opened a new office in Beijing and entered a partnership with China Construction Bank (CCB) aimed at supporting Chinese small and medium-sized businesses.
Thunes currently operates in 132 countries, connects to more than 175,000 merchants and transacts in more than 550 payment methods. Its white-label users include remittance providers such as PayPal, WesternUnion, Remitly, MoneyGram and Revolut; and retail apps such as Grab, Uber Eats and Deliveroo.
