Mastercard buys payment platform for Dh11bn in biggest deal yet

With the purchase of technology from Denmark's Nets, credit card giant gains electronic-billing service and clearing and instant-payment services

This July 22, 2019, shows a Mastercard in North Andover, Mass. Mastercard Inc. reports financial results on Tuesday, July 30. (AP Photo/Elise Amendola)
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Mastercard said it agreed to buy a payments platform owned by Denmark's Nets for €2.85 billion (Dh11.71bn), using its biggest acquisition yet to help extend a push into faster payments.

With the deal, Mastercard is getting an electronic-billing platform and clearing and instant-payment services. 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.

“The global opportunity for real-time payments is accelerating,” said Michael Miebach, Mastercard’s chief product and innovation officer. “This deal strengthens our unique position as the one-stop partner for any bank, merchant or government’s payment needs.”

On Monday, 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 a system 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 $1.1bn (Dh40.39bn) this year on acquisitions and strategic equity investments as the firm has sought to push into new markets and develop new forms of electronic payments, Robert Napoli, an analyst at William Blair & Co., said in a note to clients on Monday.

Earlier this year, Mastercard announced its purchase of Ethoca, which helps merchants identify fraud, and Vyze, a point-of-sale payment provider. The company also acquired Transactis, which helps with bill payments, and Transfast, a cross-border payments network. Mastercard warned last week that expenses will rise more than analysts expected in the third quarter.