Xero is making a major push into the U.S. market with its $2.5 billion acquisition of Melio, a fast-growing payments platform built for small businesses. The deal gives Xero a deeper foothold in accounts payable and receivable, strengthening its tools for managing money movement inside its cloud-based accounting software.
Melio launched in 2018 and now handles payments for around 80,000 customers. In the past year alone, it processed over $30 billion. Xero expects the acquisition to deliver $70 million in added revenue and save about $20 million in costs by 2028.
Xero CEO Sukhinder Singh Cassidy said the move is all about giving small businesses better control over payments. By combining accounting and payments in one system, the company hopes to remove friction and make life easier for business owners juggling bills and cash flow.
The deal is being financed through a mix of equity, debt, and cash. Xero plans to keep its balance sheet strong as the integration moves forward. The full rollout is expected to take about a year.
Analysts say this gives Xero a competitive edge against larger U.S. players like Intuit. Once fully integrated, Xero will be able to offer end-to-end payment workflows, something it lacked until now.
This isn’t just about adding features. For Xero, it’s a strategic bet on the future of small business finance, where payments, accounting, and automation all live in the same system.
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