Mastercard has agreed to take a major stake in Middle Eastern payments group Network International as part of its upcoming London initial public offering. The US card network will make a $300m cornerstone investment in the listing next month, buying up to 9.99 per cent of Network’s shares. The two companies will also form a “strategic partnership”, working together to encourage more adoption of digital payments in the Middle East and Africa. Network, which was initially formed as a subsidiary of Dubai-based bank Emirates NBD, is already the largest expert in enabling retailers to take card payments instore or online in the region. A structural shift away from cash in favour of cards and other digital payment methods has led to a boom in the payments sector in recent years. Tuesday’s deal, coming a little over a week after US groups FIS and Worldpay agreed a $43bn combination, further highlights the rising pressure on companies to keep up with the changing landscape through merger and acquisition activity. Earlier this month Mastercard lost out in a bidding war with its biggest rival Visa for British group Earthport, but agreed to buy Transfast, another international money transfer network. Mastercard will become Network’s fourth-largest shareholder behind its current owners General Atlantic, Warburg Pincus an Emirates NBD. Ron Kalifa, Network chairman, said the deal “demonstrates significant confidence in the strength of the business as we move forward to listing.” “ Network International sits at the heart of the Middle East and Africa’s payments ecosystem, the world’s most under-penetrated payments market, providing investors with the unique opportunity to benefit from the rapid structural shift from cash to digital payments,” he added.
US card network will become payments group’s fourth-largest shareholder