Mastercard has announced it has entered into an agreement to acquire the majority of the Corporate Services businesses of Nets, a European PayTech company, for €2.85bn (approximately US$3.19bn).
The acquisition comprises the clearing and instant payment services, and e-billing solutions of Nets’ Corporate Services business. The addition of Nets technology and teams strengthens Mastercard’s existing account-to-account (A2A) capabilities. Post-acquisition, the company’s real-time payment assets will provide capabilities across three principal areas:
- Infrastructure - the acquisition complements Mastercard’s existing technologies, catering to a more expansive customer base and leveraging its assets.
- Applications for end-user solutions - like bill payment and open banking solutions, now delivered with greater speed and scale.
- Value-added services, such as data analytics and fraud protection.
In recent years, Mastercard has developed and acquired a set of capabilities to address the sizable B2B, P2M and P2P opportunities. When combined with the existing card rails, Mastercard provides its customers an offering to support business, government and consumer payment needs across a variety of payment flows. Mastercard says economies benefit through an increased velocity of money, while banks can offer businesses and consumers new, safe, simple and secure apps and services.
“We are a multi-rail company - this deal further demonstrates the strength of our strategy, staying ahead of the changing landscape, delivering essential choice to banks, businesses and consumers,” added Miebach.
The acquisition of the majority of Nets’ Corporate Services business provides more depth and scale to the Mastercard Send and Transfast technologies that deliver cross-border payments to bank accounts, mobile wallets and cards. Mastercard’s A2A capabilities and expertise now extend into continental Europe, to match its capabilities in the UK, Americas, Asia, Middle East and Africa. The deal also complements the unique technical assets and partners recently added to Mastercard’s bill payment capabilities through the acquisition of Transactis.
Real-time payments provide a smarter and faster alternative to traditional ACH, cash and cheques. They help banks improve the efficiency of their operations, providing a better user experience and customer service, while helping to reduce the cost of exception handling. The acquisition of the Nets services is another step in Mastercard’s strategy, building on the recent partnership with P27 to deliver real-time and batch payments to Nordic markets.
Nets’ Corporate Services business operates both managed services and software license models in several European markets. It also has an established bill pay service in Norway and Denmark, building on its regional innovation heritage, and a new Open Banking solution for banks, fintechs and third-party processors. The acquisition by Mastercard will support and strengthen the business and bring an increased focus on innovation to customers in the Nordic region.
“Over the past five years, Nets has built a strong account-to-account payments platform with a global growth opportunity. However, to fully unlock its international growth potential beyond Nets’ existing geographical footprint requires the capabilities and resources of an established global leader,” said Bo Nilsson, Group CEO of Nets. “With its resources and global reach, Mastercard is uniquely positioned to unlock the potential of Nets’ account-to-account business,” added Nilsson.
The transaction, which is anticipated to close in the first half of 2020, is subject to regulatory clearances and other customary closing conditions. Mastercard expects the transaction to be dilutive for up to 24 months after the deal closes, primarily related to purchase accounting and integration related costs.
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