The UK’s Competition and Markets Authority (CMA) has announced that the anticipated acquisition of fintech company Earthport by Visa, does not qualify for investigation under the merger provisions of the Enterprise Act 2002.
Image: Visa’s old headquarters in Foster City, California. Photo: Courtesy of Coolcaesar/Wikipedia.org.
In April, the UK watchdog has initiated phase 1 merger inquiry into the £247m ($325m) acquisition of Earthport by Visa, whether the deal will have any impact on the competition in the UK markets.
Earthport, based in London, is a provider of cross-border payment services to banks, money transfer service providers and businesses through Automated Clearing House (ACH) network.
The British fintech company, which has regional offices in New York, Miami, Dubai and Singapore, offers services to Bank of America Merrill Lynch, Japan Post Bank, TransferWise, HSBC, and Xoom – the international money transfer service of PayPal, and Western Union.
Presently, Visa offers payments to be sent to or from its cards. It believes that that acquisition will allow its customers to enable individuals, businesses and governments to use its services to send and/or receive money through bank accounts across the globe.
Furthermore, the deal will help the payments company to resolve many use cases such as payroll and international person-to-person and business-to-business remittances.
Leveraging Earthport’s technology, Visa can expand and scale Visa Direct’s portfolio of use cases, including funds disbursements, peer-to-peer payments, cross border payments, marketplace payouts, and bill payments.
Visa global push payments head Bill Sheley said: “Visa is modernizing the way we move money by making it quicker, safer and easier to pay and be paid than ever before.
“The acquisition of Earthport unleashes the power of Visa by taking us ‘beyond the card,’ empowering us to enable our clients to make payments through bank accounts around the world.”
In February, the payments company offered to acquire the UK company for 37p per share in an all-cash deal. Prior to that, the payments technology giant proposed a bid of about £198m, or 30p per share, to Earthport in January.
Visa raised the bid after its rival Mastercard entered the race in late January by offering around £233m to acquire the payments firm.
In April, Mastercard dropped its bid to acquire Earthport after it agreed to acquire cross-border payments network provider Transfast.