HSBC forms UK card processing joint venture with Global Payments Inc.
HSBC Bank plc and Global Payments Inc., a leading electronic transaction processor, will establish a joint venture company to build the bank’s point-of-sale card payments business.
HSBC processes card payments for UK merchants across 135,000 stores and outlets. The two companies, which already have a joint venture for card payments processing in Asia, aim to grow this customer base and provide a wider range of card payments solutions for customers.
The new company, HSBC Merchant Services Limited, will be 51 per cent owned by Global Payments and 49 per cent owned by HSBC Bank plc and headquartered in Leicester. Under the agreement, HSBC will transfer its existing UK card processing business to Global Payments for a consideration of US$439 million and, pending regulatory approval, plans to complete the deal within two months. For the calendar year 2007, HSBC’s merchant acquiring business in the United Kingdom generated revenue of approximately US$229 million (£114 million).
HSBC’s 400 card processing staff will become employees of Global Payments. No redundancies are expected.
Alan Keir, HSBC’s Group General Manager, Commercial Banking, said: “The creation of HSBC Merchant Services builds on our partnerships with Global Payments in Asia and North America. Through the combination of HSBC’s extensive business customer franchise, and Global Payments’ experience in transaction handling, HSBC Merchant Services will offer a compelling proposition.”
HSBC and Global Payments also have sale-and-referral agreements in the US and Canada.
Global Payments is one of the world’s largest transaction processors and offers worldwide, world-class electronic transaction processing services.
Paul R. Garcia, Chairman, President and Chief Executive Officer of Global Payments, said: “We are thrilled that HSBC, one of the world’s most respected financial institutions, has agreed to expand its relationship with Global Payments into the United Kingdom. We expect to focus on growing the customer base by providing an expansive range of card payment solutions. Longer term, with the adoption of the Single Euro Payments Area initiatives, we expect to be in an excellent position to provide seamless acquiring services to merchants throughout Europe.”
HSBC and Global Payments have also agreed to a 10-year marketing alliance in which HSBC will refer customers to the joint venture for payment processing services in the UK.
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