Banking News

UK competition watchdog clears VISA acquisition of Ripple partner Earthport

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Today VISA announced that it has acquired control of Earthport, the company that has a payments network with banking relationships in 87 countries and is a Ripple partner. The UK listed company was the subject of a bidding war between VISA and Mastercard. The latter eventually withdrew and acquired another company Transfast.

The final price paid for Earthport of £247 million ($321.1 million) was almost five times the pre-bid price, an unusually high premium for an acquisition.

Apart from Ripple, the company has numerous high profile clients including Bank of America Merrill Lynch, TransferWise, BNP Paribas and Xoom. Earthport powered Santander’s first Ripple app. But the main appeal to VISA was the 87 foreign banking relationships.

VISA plans to use its network to create an alternative to SWIFT payments. The market size for money sent by wire transfer or bank accounts globally is $80 trillion. The company said: “Currently, Visa enables payments to be sent to or from Visa cards. The acquisition will make it possible for Visa clients to enable individuals, businesses and governments to utilize Visa to send and/or receive money through bank accounts around the world.”

The company highlighted use cases such as payroll, international person-to-person transfers as well as business-to-business payments. To that end, VISA is working on its B2B Connect blockchain network for high-value business payments.

“Visa is modernizing the way we move money by making it quicker, safer and easier to pay and be paid than ever before,” said Bill Sheley, head of global push payments, Visa. “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.”

Having won the battle with Mastercard for Earthport, at the start of April, the UK’s Competition and Market Authority (CMA) announced it was launching an inquiry into the merger. Today the CMA said the merger does not qualify for investigation.