Visa Inc is paying 250 million USD to buy Earthport Plc, a British firm that facilitates international transactions for banks and businesses, the U.S.-based payments group said on Thursday.
Earthport shares surged in early trading on Thursday and matched the offer price.
The London-headquartered firm said Visa’s proposal was “fair and reasonable” and that it would recommend its shareholders take up the all-cash offer.
Earthport’s shares, listed on the London Stock Exchange’s secondary market, have fallen more than 28 percent this year amid growing losses and expenses, forcing the firm to say last month that “fundamental” change was required in its strategy.
Earthport says it offers a lower-cost alternative to traditional payments systems by allowing money transfer firms and banks to have a single connection instead of multiple payments channels.
The firm is a partner of Ripple and announced an API that could help in making banks connection with Ripple’s cross-border payments network easier for small institutions.
Cross-border payments are an important part of Visa’s businesses, facilitating transactions between two or more countries is a growing market.
The volumes of these payments increased by 10% in the fiscal year of 2018 alone, according to an October statement by Visa.
The British firm has top banks as partners across the globe, including Japan Post Bank and the Bank of America Merrill Lynch.
As for Visa, it was recently reported that the payments giant is planning its own blockchain-based digital identity system. The system is called “Visa B2B Connect”, and it will focus on improving international payments. According to their announcement, it is scheduled to go live in early 2019. It will make essential business data tokenized, and it will grant the company a cryptographic identifier to be used for various platform-based transactions.
Earlier this year, in June, Visa experienced significant disruptions in their card payments, most of which were reported in Europe and the UK. The company did not report what was causing the disturbance, only that they are investigating it and working on resolving the issue.