Date: 7th August 2019
MasterCard Inc. said in a statement on Tuesday that it would be buying a stake in payments company Nets worth $3.19 billion. This comes as the company moves to make its place in the Nordic markets.
The payments processor would acquire most of the corporate services of Nets, which includes its e-billing solutions, clear and instant payment services.
Many merger deals in other industries have failed as the trade tensions along with the economic downturn in the global economy prevail. However, the payments industry has experienced growth in this tough time which has allowed deals to be done.
MasterCard explained that corporate services of Nets that will be purchased are similar to MasterCard Send and Transfast technologies. It allows the company to make payments to bank accounts in foreign countries, cards and mobile wallets.
Nowadays, many consumers are switching to digital payment platforms instead of using cash for their transactions. McKinsey consulting firm claims that the overall revenue of the global payments industry will have a turnover of $3 trillion annually by the year 2023. This comes as the global economy faces a slowdown due to trade tensions between nations like China and the United States. Besides that, the Chinese economy has also reported lower economic growth and auto sales in India have fallen which are just a few examples of the downturn.
The deal between MasterCard and Nets is expected to be completed in the year 2020. The company said that the shareholder value will decline for up to 24 months after the formalities of the deal are completed.