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Mastercard acquires Nets account-to-account payments business

Mastercard acquires Nets account-to-account payments business

Mastercard has acquired the account-to-account payment business of Nordic platform Nets for €2.85 billion.

The acquisition comprises the clearing and instant payment services, and e-billing software of Nets’ Corporate Services business.

The deal positions Mastercard at the forefront of the move to real-time payments and acts as bulwark against the incursion of account-to-account payments into the credit card business, complementing last year's acquisition of Vocalink.

It follows a recent agreement struck between Mastercard and the Nordic bank-backed P27 coalition to provide the underlying infrastructure for its real-time, cross-border payment project.

“The global opportunity for real-time payments is accelerating,” says 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.”

The acquisition provides more depth to the Mastercard Send and Transfast technologies that deliver cross-border payments to bank accounts, mobile wallets and cards. The deal also complements the technical assets and partners recently added to Mastercard’s bill payment capabilities through the acquisition of Transactis.

The operations sold to Mastercard represent the majority of Nets' Corporate Services division and comprise the clearing and instant payment services and e-billing businesses, 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 as it focuses on its merchant services operations.

Bo Nilsson, Group CEO of Nets, comments: “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. With its resources and global reach, Mastercard is uniquely positioned to unlock the potential of Nets’ account-to-account business."

The transaction is anticipated to close in the first half of 2020.

Comments: (4)

Paul Davidson
Paul Davidson - Expense Reduction Analysts - London 07 August, 2019, 08:301 like 1 like

Does MasterCard's further growth of "real-time payment capabilities, innovation and expertise" reflect the stated objective of PSD2 to open banking markets to new players?

Bob Lyddon
Bob Lyddon - Lyddon Consulting Services - Thames Ditton 07 August, 2019, 12:56Be the first to give this comment the thumbs up 0 likes

This is too coincidental with the deadline for the responses to Pay.UK's RFI for New Payments Architecture. Visa were proposing to bid with Nets, and using the asset that Mastercard have now bought. The transaction kicks a main rival for NPA into touch, and increases the bid chances of Vocalink, a Mastercard company. The RFI should be pulled by Pay.UK and this deal referred to competition authorities.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 07 August, 2019, 13:10Be the first to give this comment the thumbs up 0 likes

I don't remember how much MasterCard paid to acquire VocaLink but €2.85 billion seems excessive for a company that operates exclusively in the Nordic region, which, I'm guessing, has a smaller market than UK. 

Bob Lyddon
Bob Lyddon - Lyddon Consulting Services - Thames Ditton 07 August, 2019, 13:221 like 1 like

Nets has a quasi-monopoly in the Nordics but at the same time Mastercard has not bought all of it. Then you have the P27 project which recently selected Mastercard as Nordic payment infrastructure partner, so there are a few moving parts...but it is disturbing to see a deal that effectively knocks out Mastercard/Vocalink's main rival for the UK NPA contract. NPA is worth the combination of FPS, BACS and cheque/bank giro credit flows for many years, as all of it will clear through the NPA central architecture, plus you will have the Request to Pay and Confirmation of Payee messaging, and probably more.