MASTERCARD PURCHASES A GLOBAL PAYMENT PLATFORM WORTH DH11BN ITS BIGGEST-EVER DEAL YET

  • With the acquiring of the worldwide payment technology platform Denmark’s Nets, global credit card giant gains the upper hand into electronic-billing service, clearing transactions, and instant-payment services.
  • MasterCard in its quest of expanding its services and base globally has announced that it has agreed to acquire a payments platform owned by Denmark’s Nets for €2.85 billion (Dh11.71bn), thus, utilizing its most significant acquisition spree yet ever in order to trigger a push for swifter clearance of transactions and payments at much quicker pace.
  • With the acquisition of this deal, MasterCard’s real motive is to amalgamate a perfect technological fused electronic digitalized billing platform that supports instant-payment services, swifter clearance and quickens the period for cross border transactions. The deal is expected to hurt profit for as long as two years after it’s completed, which is expected in the first half of 2020.

Michael Miebach, MasterCard’s chief product and innovation officer stated that “The worldwide opportunity for accelerating the real-time payments is on the rise, and with this particular deal success they predict that it would bolster their unique position and as well as an innovative transactional medium (One-stop) partner for any global banks, financial institutions, merchant or government’s payment needs.”

The Federal Reserve recently announced that it would start up building its own real-time gross settlement system for payments in the US which is also supported by global e-commerce giants and merchants like Amazon.com and Walmart that this would surely improve the instant card payments in the US.

This Fed’s based system will be competing directly with similar payments system built by the largest US banks through an association called The Clearing House, which utilized the MasterCard technology to develop its network.

According to Robert Napoli, an analyst at William Blair & Co., stated that the MasterCard has already spent $1.1bn (Dh40.39bn) this year on acquisitions and strategic equity investments with the firm’s intention to explore and push to newer boundaries (markets) as well in the development of more modern forms of the electronic payments.

In a move earlier this year, MasterCard announced its purchase of Ethoca, supporting the Merchants in the identification of the fraud, as well as Vyze, a point-of-sale payment provider. MasterCard, the firm as well acquired Transactis, for supporting the bill payments as well as Transfast, a cross-border payments network. MasterCard also admitted and warned the previous week that with all such acquisitions, the expenses would all shoot up more than what analysts expected during the third quarter.