In a major fintech move that could reshape small business accounting and payments, Xero has acquired B2B bill pay platform Melio for $2.5 billion. Some of the top vendors offering payment solutions include Payoneer, Intuit, Paypal, Zoho Payments and now Xero (through Melio)

Key Takeaways:

• Xero’s acquisition of Melio strengthens its bill payment capabilities for small businesses.
• The $2.5B deal is one of Xero’s largest to date, signaling serious ambition in B2B fintech.
• Melio will continue to operate under its own brand in the U.S. market.
• The integration aims to streamline payments directly from Xero’s accounting platform.
• Small businesses could benefit from more seamless cash flow management and bill pay tools.

Related – Lack of Financial Literacy Hinders Small Business Growth Says Xero Study

A Strategic Move to Simplify Business Payments

New Zealand-based Xero, known for its cloud accounting software, announced on June 25 that it had acquired New York-based Melio, a B2B payments platform popular with small business owners and accountants. The $2.5 billion deal is aimed at giving Xero users more robust bill pay functionality natively within the accounting system.

Melio allows businesses to pay bills via bank transfers or credit cards—even if vendors don’t accept card payments. It gained rapid traction among U.S. small businesses looking for faster, digital-first payment tools. For Xero, bringing this capability in-house is a logical next step.

“Combining Xero’s accounting engine with Melio’s payment capabilities will help small businesses better manage their cash flow,” said Xero CEO Sukhinder Singh Cassidy in a statement.

Related – How To Prepare for Rougher Small Business Banking

Why Melio, and Why Now?

Melio has become a fintech darling over the past few years, in large part due to its user-friendly platform and a clear focus on small business needs. According to PYMNTS.com, Melio processed tens of billions in payment volume in 2024 alone.

This acquisition isn’t just about product—it’s also about market access. While Xero has seen steady growth globally, it has struggled to gain dominance in the U.S., where QuickBooks remains the dominant player. Melio’s strong U.S. customer base gives Xero a better foothold.

What This Means for Small Business Owners

For entrepreneurs and small business finance teams, the promise is smoother, faster, more intuitive bill payment — without having to switch between platforms.

Once integrated, small business owners using Xero could:

• Pay vendors from within the Xero interface, rather than syncing with a third-party tool.
• Use credit cards to pay bills — even to vendors who prefer checks or bank deposits.
• Track bills, payment status, and cash flow in one place, in real time.
• Gain new insights into spend patterns, due dates, and vendor management.

If you’re a small business still sending checks manually or toggling between accounting and bill pay apps, this move could simplify your back office significantly.

A Win for Embedded Finance

This deal highlights a bigger trend: embedded finance. More small business platforms are integrating financial services directly into their core tools — from invoicing and payroll to lending and now bill payments.

Competitors like QuickBooks and FreshBooks have already launched embedded banking and payments tools. With Melio under its umbrella, Xero is now in a stronger position to compete.

“Xero is betting that the future of business finance is seamless,” said fintech analyst Jason Mikula on LinkedIn. “This deal aligns with the broader wave of integrating financial services into core software platforms.”

Looking Ahead

Melio will continue to operate independently for now, retaining its U.S. brand and team. The two companies say deeper integration will roll out gradually, with more features embedded into Xero’s interface by 2026.

For small business owners, this is one more sign that the tools you use are getting smarter — and that the fintech wars are far from over.