Visa is reported to be among the companies looking at the acquisition of Nordic payment firm Nets, according to people familiar with the discussions. If agreed, a deal for the payment processor would add to the boom in mergers and acquisitions seen in the digital payments sector in recent months.
The world’s second-largest card payment company is considering buying part of Nets operations, but probably not the entire company. Nets, which provides payment services to 400,000 merchants across Europe, was taken private for 33.1 billion Danish kroner ($4.9 billion) in 2017 by a consortium led by US private equity firm Hellman & Friedman. Other companies are also said to be in the mix to make a deal for Nets.
“We do not comment on market rumours and speculation,” comments Povl Rasmussen, a spokesperson for Nets. A spokesperson for Visa also said the company doesn’t comment on speculation.
Visa is focused on the parts of Nets’ business that handle things like bank-to-bank payments and automatic billing, which are seen as particularly profitable segments of its operations, the people said.
While Visa runs the dominant card payment network outside of China, bank-to-bank transactions represent a vulnerability, should those types of payments that take place outside the card network catch on widely – which they are expected to.
As more and more transactions take place digitally and online, payment company assets are in hot demand. Financial technology provider Fiserv said earlier this year that it was buying payment processor First Data for $22 billion. China’s Ant Financial agreed to buy UK-based WorldFirst in February for a reported $700 million, and the next month FIS said it was buying Worldpay for $35 billion.
Nets offers Visa a chance to match its main rival: MasterCard bought VocaLink—which enables direct payments between bank accounts—for about $920 million in 2016. Companies that handle these types of transactions are seen as harder to find, which could make Nets, a best-in-class operator, particularly valuable to some buyers.
At the same time, other parts of Nets’ business, particularly its card payment operations, may be facing more competition than expected when it was taken private, as FinTechs like Adyen gobble up market share.