As part of its efforts to accelerate its activity in the payments processing space, JPMorgan Chase has decided to purchase healthcare payments technology company InstaMed.

Terms of the deal were not disclosed, but CNBC cited unnamed sources saying the New York-based bank and financial services firm was paying more than $500 million for the company.

Acquiring Philadelphia, Pennsylvania-based InstaMed helps to expand JPMorgan’s corporate payments business into the lucrative healthcare space. U.S. healthcare spending currently clocks in at more than $3 trillion annually and is expected to grow to $6 trillion by 2027.

Last year alone, InstaMed processed more than $94 billion in healthcare payments on its platform. The company is a leader in the space, which includes competitors like Cedar, Simplee and Change Healthcare.

InstaMed has developed a cloud-based platform to coordinate bill payments between providers, insurers and patients. Founded in 2014 by Bill Marvin and Chris Seib, two Accenture executives, the company has raised more than $130 million in funding and has bills itself as the “Paypal of healthcare.”

The company’s technology is meant to help digitize the largely paper-based medical billing and payments industry, make it easier for consumers to pay for healthcare services and improve the efficiency and effectiveness of the collections process.

Typically large banks have shied away from outright acquisitions of fintech companies, preferring instead to partner with tech startups.

However, with the increasing focus on technology as an enabler of financial services, some companies have taken more of an active stance on bringing those capabilities in house through M&A.

The acquisition of InstaMed represents the largest acquisition for JPMorgan in more than a decade. In 2017, the company purchased PayPal competitor WePay in a deal valued at up to $400 million.

“We’ve made significant investments in our Wholesale Payments business over the years and this acquisition will give us a unique advantage in one of the fastest growing sectors. With InstaMed, we combine the strength and scale of JPMorgan Chase’s payments capabilities with a leading healthcare payments solution for consumers, providers and payers,” Takis Georgakopoulos, JPMorgan Chase’s Global Head of Wholesale Payments, said in a statement.

“The InstaMed team is passionate about delivering an excellent client experience with a focus on innovation, keeping data safe and secure, and simplifying the end-to-end healthcare payments process – a natural fit with our Wholesale Payments franchise.”

Photo: maxsattana, Getty Images

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