Visa Acquires the British FinTech Earthport

Visa buys out the London-based payment firm Earthport –which focuses on cross-border payment systems– for £198 million (roughly €219 million).

This British start-up proposes a more affordable alternative than typical payment systems as they do not rely on intermediaries when processing money transfers for banks and businesses. their list of clients includes: Hyperwallet, Payoneer, BoA Merrill Lynch, Ripple, TransferWise, WorldRemit, Japan Post Bank, Xoom, etc.

Through this operation, the US card scheme aims at improving their presence on the profitable market for cross-border payments. Visa deems that the volume for cross-border payments grew by 10% in 2018 fiscal year.
Visa also pays attention to Earthport’s in place partnerships, including their strategic agreement with Ripple since 2014 (by way of reminder, Ripple sees itself as a viable alternative to SWIFT). They integrated Ripple’s protocol in their existing payment network, enabling their customers to save on management costs.

Considering Earthport’s increasing losses and expenditures, their shares dropped by more than 28% in 2018. Just over a month ago, they also explained that they would need to upgrade their commercial strategy substantially.
In the wake of this agreement with Visa, Earthport’s shares surged by more than 20%, reaching p28.2 on the London Stock Exchange.
While their direct competitor proposes their own Blockchain-based service for cross-border payments via a set of APIs available on Mastercard Developers, Visa also keeps focusing on international payments. Two months ago, a partnership with IBM was announced on improving worldwide payments.

Category : Alertes quotidiennes