In what would seem to be Mastercard’s plan B in the recent tug of war with Visa over the acquisition of Earthport, the company announced that it will acquire Transfast, a New York based mature fintech that specializes in cross border remittances. The article is posted on Zachs and does not disclose a price. We are not deal valuation folks, but the last Visa bid for Earthport was GBP 247 million, so one might expect this transaction would be south of that number.
‘Mastercard Inc. has announced that it is acquiring Transfast, a global cross-border account-to-account money transfer network….The buyout will complement Mastercard’s exisiting suite of payment solutions. The deal is likely to expand the company’s connectivity worldwide in the account-to-account space, enhance compliance capabilities and enable it to offer superior foreign exchange tools….Mastercard’s Mastercard Send solution for business-to-business (B2B) and person-to-person (P2P) payment services is already supported by Transfast. Consequently, the deal will expand the company’s cross border business.’
The card network continues its strategic focus on B2B and expanding beyond card rails into account-based business payments. The other major card payment networks (including Union Pay) have also made it clear that B2B is a strategic imperative in their long range plans. Given that card networks have historically been relatively small players in global B2B value transfer and face general regulatory headwinds from traditional revenue models in various markets, the emphasis on broader approaches is quite logical.
‘The deal is also in sync with the company’s focus on growing its presence in the B2B space. Recently, the company launched Mastercard Track, which solves key challenges in the procure-to-pay process, including managing supply chain risk and creating more transparency in the B2B payments process. The company projects addressable payment flows in B2B globally at $120 trillion.’
As always we will keep you posted on the fast moving B2B payments space as we head into the new world of faster and more global.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
