International payments giant Visa, has announced that it is acquiring Earthport for £198 million ($250.6 million). Earthport is a company that provides cross-border payment services to banks and businesses and has been partners with Ripple, the blockchain-based payment network, since 2015.
Visa’s interest in acquiring Earthport setms from its long established ambition of championing the cross-border payments business, which spiked 10% in the fiscal year 2018. Earthport, which counts Bank of America Merrill Lynch and Japan Post Bank among its clients, said Visa’s offer was a revised proposal that followed an indicative offer from the US company last month.
According to Reuters, the acquisition will be made for £198 million ($251 million), or 30 pence ($0.38) per each Earthport share, which exceeds the stock’s Monday closing price by over four times. Rothschild & Co. advised Earthport on the deal, while Goldman Sachs advised Visa.
Earthport, based in London, was founded in 1997. As said, it is a financial services firm that offers cross-border payments service to banks and financial institutions. In 2016, the company launched a single application programming interface (API) designed to connect banks to Ripple’s distributed ledger protocol when processing cross-border payments. This was reportedly set to enable banks to overcome budgetary, technology and compliance constraints.
Visa was reportedly working on its blockchain-based digital identity system “Visa B2B Connect” for cross-border payments for launch in the first quarter of 2019 but nothing is known so far. The Earthport acquisition comes at a time when cross-border payments represent a growing business. According to Visa, the volume of such payments rose about 10 percent in the 2018 fiscal year.