Nets, a leading European PayTech company, and Mastercard, a leading technology company in the global payments industry, announced that Mastercard has entered into agreement to acquire Nets’ account-to-account based services including clearing and instant payment services, and e-billing solutions for €2.85 billion (approximately DKK 21.3 billion).
The operations sold to Mastercard represent the majority of Nets’ Corporate Services division and comprise the clearing and instant payment services and the e-billing solutions, including Betalingsservice in Denmark and AvtaleGiro/eFaktura in Norway. Nets’ e-ID and Digitisation services are not part of the transaction and will be retained by Nets as core capabilities.
„The addition of Nets technology and teams strengthens Mastercard’s existing account-to-account (A2A) capabilities.”, according to the press release.
Post-acquisition, the Mastercard’s best-in-class real-time payment assets will provide unrivaled capabilities across three principal areas:
. Infrastructure – complements Mastercard’s existing technologies, catering to a more expansive customer base, leveraging its sophisticated, highly scalable, flexible and easy-to-deploy assets
. Applications for end-user solutions – like bill payment and open banking solutions, now delivered with greater speed and scale
. Value-added services, like data analytics and fraud protection
“The global opportunity for real-time payments is accelerating,” said Michael Miebach, chief product & innovation officer, Mastercard. “This deal strengthens our unique position as the one-stop partner for any bank, merchant or government’s payment needs. The combination with existing Mastercard assets such as Vocalink, Transfast, and Transactis delivers real-time payment capabilities, innovation and expertise that are truly differentiated.”
„In recent years, Mastercard has developed and acquired a formidable set of capabilities to address the sizable B2B, P2M and P2P opportunities. When combined with the existing card rails, Mastercard provides its customers a unique and powerful offering, to support business, government and consumer payment needs across a variety of payment flows.”, the company said.
“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 even 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 U.K, 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 checks. 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 purposeful 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 and highly successful 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.
“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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