TabaPay raises USD $155 million to buy Transact Bank

TabaPay has closed a USD $155 million financing round led by FTV Capital and announced plans to acquire Transact Bank. The deal would bring a regulated bank into the group under a new holding company structure.

The financing includes primary capital and a secondary transaction. Transact Bank, an OCC-chartered and FDIC-insured bank based in Denver, would be renamed TabaBank after the acquisition and operate alongside TabaPay under TabaHoldings.

The twin moves mark a significant step for the Palo Alto-based payments company as it seeks to bring banking and payment processing closer together. The new structure would allow it to continue working with its existing network of bank partners while adding an in-house banking arm.

Rodney Robinson, Co-Founder and Chief Executive Officer of TabaPay, said in a statement: "For nearly a decade, TabaPay has helped innovative fintech companies move money faster, more efficiently and more reliably."

"The planned launch of TabaBank will bring payments and banking capabilities under one roof, offering our clients a more integrated experience while continuing to work alongside our network of bank partners. Together, TabaBank and FTV's investment will expand our capabilities and help keep TabaPay at the forefront of payment innovation," he added.

Scale and reach

TabaPay provides payment infrastructure to fintech groups, lenders and other digital platforms. It is on track to process more than USD $100 billion in payment volume this year, ranks as the fifth-largest card-not-present processor in the US by transaction count, and serves one-third of American households.

Its platform connects card and bank payment rails through a single application programming interface. TabaPay works with more than 20 partner banks across the US and Canada.

The proposed purchase of Transact Bank is intended to give TabaPay more direct control over some of the regulated banking functions its fintech clients need. As regulatory requirements evolve, many platform businesses rely on multiple sponsor banks for different use cases, increasing complexity and reducing redundancy.

Once operational, TabaBank is intended to complement the existing partner bank network rather than replace it. The bank would support use cases including digital banking and debt repayment, and would connect with payment rails including RTP, FedNow, ACH, wire transfers and card sponsorship across Visa, Mastercard, Discover and regional networks.

Investment case

The USD $155 million financing is also expected to support the bank's qualification to act as an acquirer across major card networks and industries. That could broaden TabaPay's offering to merchants, independent sales organisations, payment facilitators and other platform customers that require sponsorship services.

TabaPay said the new capital would also support product development and possible acquisitions. The areas cited include merchant liquidity products and broader strategic expansion.

For FTV Capital, the investment adds another payments infrastructure company to a portfolio that already includes several fintech and software businesses. The firm has raised more than USD $10.2 billion and has previously invested in companies including ConnexPay, EBANX and Paddle.

"As payments infrastructure becomes increasingly complex and mission-critical, TabaPay stands out for its scale, reliability, and profitable growth," said Robert Anderson, Partner at FTV Capital.

"We've known Rodney and the team for several years and have been continually impressed by the differentiated platform they've built, as well as the trust they've earned from many of the industry's most demanding financial services companies. We are excited to support TabaPay as it launches TabaBank and executes on its next phase of growth."

As part of the transaction, Anderson joined TabaPay's board of directors, giving FTV a board seat as the company moves into a more heavily regulated structure through the proposed bank acquisition.

Regulatory path

The acquisition of Transact Bank remains subject to regulatory approval. If completed, TabaBank would be among a small number of payments-focused banks in Silicon Valley, according to TabaPay.

The move reflects a broader trend in financial technology, with payment firms seeking closer control over banking relationships, settlement processes and sponsor bank access. For companies that handle large payment volumes, owning a bank can provide greater operational flexibility, although it also brings increased supervisory scrutiny and capital requirements.

TabaPay said the planned bank structure is designed to give clients more redundancy and expertise for complex payment flows while preserving access to external bank partners. Together, the financing and acquisition would extend its reach across banking and money movement services.