Mastercard has once again been the more aggressive as it muscled in front of Visa to buy the Nordic payments platform Nets for €2.85 billion ($3.19 billion), using its biggest-ever acquisition to help extend its push into faster payments.
With the purchase, Mastercard is getting an electronic-billing platform and clearing and instant-payment services, according to a statement. The company said the purchase will hurt profit for as long as two years after it’s completed, which is expected in H1 2020.
Companies and governments around the world have been launching real-time payment systems to speed up the movement of money between consumers and businesses, kicking off a race among banks and payment networks to capture those flows. Recently, the Federal Reserve announced it will build its own real-time gross settlement system for payments in the US after merchants including Amazon.com and Walmart said such a move would help improve card payments in the US. The Fed’s system will compete directly with one built by the largest US banks through an association called the Clearing House, which used Mastercard technology to build its network.
Mastercard has already spent $1.1 billion this year on acquisitions and strategic equity investments as the firm sought to push into new markets and develop additional forms of electronic payments. Mastercard plans to expand the Nets businesses beyond their primary markets in the Nordics. The company will continue to look for acquisition opportunities in the real-time payments space, as well as in fraud detection and data analytics, he said.
“Real time is real, it’s here and it keeps growing,” comments Michael Miebach, Mastercard’s chief product and innovation officer. “What we found in Nets is it’s a business that’s deeply ingrained in some of the most innovative and vibrant payments markets in the world.”
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