Business Impact

MasterCard acquires DataCash for $520M in cash

PURCHASE, New York (AP) – MasterCard Inc. is looking to tap into the growth of online payments worldwide.

The company said Thursday that it will pay $520 million in cash for DataCash Group, which provides merchants with electronic payment and fraud prevention services.

The move is expected to help MasterCard bolster online use of cards that bear its name, particularly in Europe and Asia.

DataCash, based in London, has 362 workers and posted $58 million in revenue last year. It currently provides services primarily to European businesses.

MasterCard says the buyout will cut fourth-quarter net income by 5 cents per share. For the fiscal year 2011, the transaction is expected to break even, and to add to net income in 2012.

MasterCard’s much larger rival, Visa Inc., made a similar purchase earlier this year. Visa’s $2 billion acquisition of CyberSource Corp. in April was also intended to boost use of its branded cards, in part by providing fraud fighting technology.

The respective acquisitions by MasterCard and Visa address “the security holes” that come with e-commerce, said Conrad Sheehan, CEO of mPayy, an alternative payment company.

MasterCard and Visa make money by processing transactions made on branded cards issued by member banks such as Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc.

Shares of MasterCard were down $2.87 to $209.99 in afternoon trading.

Copyright 2010 The Associated Press.

Uh oh–you've read all of your free articles for this month.

Insider Premium
$179.95/yr US PRICE

More from Business Impact

How technology advances are changing the economy and providing new opportunities in many industries.

Want more award-winning journalism? Subscribe to Insider Plus.
  • Insider Plus {! insider.prices.plus !}*

    {! insider.display.menuOptionsLabel !}

    Everything included in Insider Basic, plus ad-free web experience, select discounts to partner offerings and MIT Technology Review events

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

/
You've read all of your free articles this month. This is your last free article this month. You've read of free articles this month. or  for unlimited online access.