Norwegian payments processor Banking and Business Solutions (BBS) and Danish payments body Payment Business Services (PBS) are merging their respective card processing operations to form a new company called Northern European Transaction Services (Nets).
Nets will offer card payment processing services in the North European markets and aims to increase annual volumes from three billion transactions to five billion transactions by the end of 2008.
BBS and PBS will each own a 50% stake in the venture and say Nets will also seek additional investors to fund further expansion in Europe. The new company will be headed by PBS EVP Klaus Frandsen.
Nets has already signed Nordea as a customer. The bank - which is the largest in the Nordic region - will consolidate its card acquiring transaction processing operations in Denmark, Norway and Sweden through Nets.
The establishment of Nets comes as payments market participants restructure and reposition businesses ahead of the introduction of a Single Euro Payments Area (Sepa) in 2008, which aims to dismantle cross-border barriers and drive down costs for non-cash euro payments to the level of domestic transfers.
Sepa is expected to intensify competition and consolidation in the euro zone so that ultimately just a few payment processors will remain. Research released by Accenture earlier this month predicted that folowing Sepa, debit and credit card schemes will be dominated by MasterCard and Visa, with only four domestic card schemes offering full Sepa payments services.
Flemming Jensen, CEO of PBS and vice chairman of the Nets board, says: "Within the next couple of years, Europe will have fewer and larger processing companies. Nets aims to be one of those."
Last year Dutch payments body Interpay and German processor Transaktionsinstitut merged operations to form a pan-European service provider called Equens which recently reported a five year deal to provide debit card processing services to ABN Amro.