HSBC Bank plc and Global Payments Inc., a electronic transactionprocessor, will establish a joint venture company to build the bank’spoint-of-sale card payments business.
HSBC processes card payments for UK merchants across 135,000 stores andoutlets. The two companies, which already have a joint venture for cardpayments processing in Asia, aim to grow this customer base and providea wider range of card payments solutions for customers.
The new company, HSBC Merchant Services Limited, will be 51% owned by Global Payments and 49% 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.
HSBC’s merchant acquiring business in the United Kingdom generatedrevenue of approximately US$229 million (114 million).
HSBC’s 400 card processing staff will become employees of GlobalPayments. No redundancies are expected.
“The creation of HSBC Merchant Services builds on our partnerships withGlobal Payments in Asia and North America. Through the combination ofHSBC’s extensive business customer franchise, and global payments’experience in transaction handling, HSBC merchant services will offer acompelling proposition,” says Alan Keir, general manager of commercial banking, HSBC.
HSBC and Global Payments also have sale-and-referral agreements in theUS and Canada. Global payments is one of the world’s largest transactionprocessors and offers worldwide, world-class electronic transactionprocessing services.
“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,” says Paul R. Garcia, chairman, president and CEO, Global Payments.
HSBC and Global Payments have also agreed to a 10-year marketingalliance in which HSBC will refer customers to the joint venture forpayment processing services in the UK.