In a bold move to strengthen its position in the global financial technology space, New Zealand-based accounting software giant Xero has announced its plan to acquire U.S. fintech startup Melio in a $2.5 billion deal. The acquisition marks one of Xero’s largest and most strategic investments to date, aimed at expanding its reach into the North American small business payments market.
About Melio
Melio, founded in 2018, is a fast-growing fintech company that enables small businesses to send and receive payments digitally with enhanced flexibility and simplicity. Its platform has gained traction in the U.S. for streamlining accounts payable and receivable processes, offering users the ability to pay bills via bank transfer or card—even if the recipient doesn’t accept cards.
Melio’s user-friendly interface, payment scheduling features, and seamless accounting integrations have made it a standout solution for SMBs seeking efficient cash flow management.
Why This Acquisition Matters
For Xero, the acquisition of Melio is a strategic step toward bolstering its financial services capabilities, particularly in the U.S. market. Xero has long been recognized for its cloud-based accounting platform used by millions of small businesses worldwide. By integrating Melio’s payment technology, Xero aims to offer a more complete financial operating system—one that includes accounting, invoicing, payroll, and now smart payment solutions.
According to Xero CEO Sukhinder Singh Cassidy,
“This acquisition aligns with our vision of helping small businesses thrive globally. Melio’s technology enhances our product suite and opens new revenue streams through payment processing.”
Benefits to Customers
The integration of Melio will give Xero users the ability to:
- Automate bill payments and receivables directly within the Xero dashboard
- Pay vendors via card or ACH, even if the recipient only accepts checks
- Improve cash flow visibility with real-time payment tracking
- Reduce manual entry and reconciliation errors through smart syncing features
These improvements are expected to benefit Xero’s existing customer base and attract new clients looking for an all-in-one finance and accounting platform.
What’s Next?
The $2.5 billion deal is expected to close by the end of this fiscal year, pending regulatory approvals. Xero has stated that Melio will continue to operate under its brand for the time being, with gradual integration into the Xero platform over the next 12–18 months.
In conclusion
Xero’s acquisition of Melio reflects a growing trend in the fintech space: consolidation and expansion through smart, tech-driven partnerships. With this move, Xero positions itself not just as an accounting platform, but as a full-scale financial partner for small businesses around the globe.
