Barclays puts its payment business in Brookfield's hands

The British Bank Barclays Just announced its rapprochement with Brookfield, a global investment giant of Canadian origin. The two new partners agreed to a gradual divestment of the Bank's payment activities to Brookfield. Barclays does not completely leave the payments market but thus transforms its payment acceptance business into an independent entity.

FACTS

• Barclays therefore approached Brookfield to agree on an agreement to phase out its market payment activities.

• Barclays will first invest around £400 million in the payment unit to support its growth and transformation into an independent entity.

• After three years, Brookfield will have the opportunity to acquire approximately 70% of the company, potentially reaching 80% participation through a financial incentive in the form of an additional stake.

• Barclays will therefore retain a 20% minority interest in the new company after this period.

ISSUES

• Consolidate Strategy : For Brookfield, the progressive session of Barclays' payment activities to its advantage represents a realization of its long-standing ambitions in the payment market. In recent years, the company has accelerated its positioning in the financial services and technology market. In particular, it indicated its particular interest in the payment of buying in 2023 a reference based in the Middle East, Network International.

• Fight against competition Although Barclays has partnered with Brookfield Asset Management to restructure its market payments business in the UK, it has in particular been able to position itself in the face of growing competition and growing technological challenges. Brookfield's new payment company, which is largely owned by Brookfield, will benefit from the group's expertise in this area and should ensure the modernization of its infrastructure.

• Focusing its activities Barclays is now looking to improve its performance by focusing on its traditional banking activities.

PERSPECTIVE

• This partnership reflects a broader trend marked by the commitment made by the major European banks to adapt their payment activities in the face of declining valuations and increased competition from FinTechs such as Stripe or Adyen For example.

• He stressed the growing importance of strategic alliances to strengthen competitiveness in a rapidly changing environment, as was the case with the project. Estreem for example by BNP Paribas and BPCE.

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