The EC approval is subject to the transfer of a license for Nets' Realtime 24/7 technology, along with the associated personnel and other assets


Flags in front of the European Commission building in Brussels. (Credit: Sébastien Bertrand/commons.wikimedia.)

The European Commission (EC) has approved the Mastercard’s proposal for acquisition of Nets, a Denmark-based payment solution provider’s account-to-account payment business.

The approval is subject to the transfer of a license for Nets’ Realtime 24/7 technology for account-to-account core infrastructure services, along with the associated personnel and other assets.

ED Executive Vice-President Margrethe Vestager said: “Companies and citizens seek competitive and innovative payment solutions for their banking transactions.

“This merger, as originally notified, would have significantly reduced competition in the market for account-to-account core infrastructure services and undermined the development of new real-time payment solutions, which are becoming increasingly important.

“Today’s decision ensures that effective competition is preserved and facilitates the emergence of a new provider of real-time payment infrastructure services in the European Economic Area.”

The EC has investigated focusing on the provision of account-to-account core infrastructure services (A2A CIS), and account-to-account payment services (A2A payment services), where the activities of the Mastercard would primarily overlap with the business to be acquired in the European Economic Area (EEA).

A2A CIS is said to facilitate process payments, including real-time payments, directly from one bank account to another, without the requiring a card, and can be provided either as a software-only solution or as a managed solution.

The managed solutions include software, hardware and the telecommunication networks and processes along with the management and operation of the infrastructure.

The EC investigation found that the transaction would have led to competition concerns in the EEA market for A2A CIS offering, regarding its managed solutions. Both companies hold strong footprint in the EEA market, where the transaction would strengthen the leading player, Mastercard.

The commission concluded that the parties face a limited number of credible competitors in providing A2A CIS managed services, where the market for the A2A CIS software-only solutions is usually more competitive.

The proposed transaction may potentially affect the competition and may pave way for increased prices and reduced choice in the provision of A2A CIS as managed services in the market.

Mastercard and Nets will license Nets’ Realtime 24/7 technology and other services

To address the concerns raised by the commission, Mastercard and Nets have agreed to transfer a global license to distribute, supply, sell, develop, modify, upgrade or otherwise use Nets’ Realtime 24/7 technology to a purchaser.

The transferred licence would provide the purchaser with access to the licensed technology on an exclusive basis in the EEA and, on a non-exclusive basis, outside of the EEA.

The transfer also includes all necessary personnel and services, including consultancy services and transitional support services to provide managed services based on Nets’ Realtime 24/7 technology.