Mergers: Commission approves acquisition of Nets’ account-to-account payment business by Mastercard, subject to conditions

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This article is brought to you in association with the European Commission.


The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Nets’ account-to-account payment business by Mastercard. The decision is conditional on the transfer of a license for Nets’ “Realtime 24/7” technology for account-to-account core infrastructure services as well as of the relevant personnel and other assets.

Executive Vice-President Margrethe Vestager, responsible for competition policy, said: “Companies and citizens seek competitive and innovative payment solutions for their banking transactions. This merger, as originally notified, would have significantly reduced competition in the market for account-to-account core infrastructure services and undermined the development of new real-time payment solutions, which are becoming increasingly important. Today’s decision ensures that effective competition is preserved and facilitates the emergence of a new provider of real-time payment infrastructure services in the European Economic Area“.

The Commission’s investigation

The Commission’s investigation focused on the markets for the provision of account-to-account core infrastructure services “A2A CIS” and account-to-account payment services “A2A payment services”, where the activities of the Mastercard and the target business mainly overlap in the European Economic Area (EEA).

A2A CIS allow to process payments, including real-time payments, directly from one bank account to another, without the need for a card. They can be provided either as a software-only solution or as a managed solution consisting of the provision of the A2A core infrastructure (including the software, together with the hardware and the telecommunication networks and processes), as well as the management and operation of the infrastructure.

The Commission found that the transaction, as originally notified, would have raised competition concerns in the EEA market for A2A CIS in relation to managed solutions. In this market, both companies have strong positions and the transaction would have led to the strengthening of the leading player, Mastercard. The Commission also found that the parties closely compete with each other, having been shortlisted by customers in a higher number of EEA tenders compared to other players. Finally, the Commission’s investigation revealed that the parties face a limited number of credible competitors in the provision of A2A CIS managed services, whereas the market for the provision of A2A CIS software-only solutions is generally more competitive. The Commission was therefore concerned that the proposed acquisition would harm competition and lead to higher prices and less choice in the market for the provision of A2A CIS as managed services.

The Commission’s investigation did not identify competition concerns in the various national markets for A2A payment services, which are end-user services/applications to transfer money from one bank account to another, within the EEA. In particular, the Commission found that the companies’ activities only overlap in the Nordic region, where Nets’ A2A payment business’ existing solutions are expected to lose relevance irrespective of the transaction, as they will soon be replaced by cheaper and more innovative solutions.

The proposed remedies

To address the Commission’s concerns, Mastercard and Nets offered to transfer to a suitable purchaser a global license to distribute, supply, sell, develop, modify, upgrade or otherwise use Nets’ Realtime 24/7 technology, with which the target business currently competes in A2A CIS tenders. In particular, the purchaser will have access to the licensed technology on an exclusive basis in the EEA and, on a non-exclusive basis, outside of the EEA. The transfer also includes all necessary personnel and services, such as consultancy services and transitional support services, including access to all necessary components and capabilities  to provide managed services based on Nets’ Realtime 24/7 technology.

The proposed commitments fully address the Commission’s competition concerns, as they will increase competition in the market for the provision of A2A CIS as managed services in the EEA, by allowing a new player to effectively and credibly compete in this space.

The Commission therefore concluded that the proposed transaction, as modified by the commitments, no longer raises competition concerns in the EEA. The decision is conditional upon full compliance with the commitments.

Companies and products

Mastercard is a US-based technology company operating in the global payments industry. Mastercard’s main activities include the ownership and operation of payment card schemes and provision of switching services for card transactions. Mastercard is also active in alternative payment solutions.

Nets A/S’ account-to-account payment business is a business unit within Nets A/S, a payment solution provider headquartered in Denmark. It provides payment services and technology solutions, mainly in the Nordic region, as well as in the Single Euro Payments Area.

Merger control rules and procedures

The Transaction was notified to the Commission on 26 June 2020.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EU Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval or to start an in-depth investigation. This deadline is extended to 35 working days in cases where remedies are submitted by the parties, such as in this case.

More information will be available on the Commission’s competition website, in the Commission’s public case register under the case number M.9744.

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