MasterCard pays £333m for British online payments firm DataCash

Mastercard has agreed to pay £333m for DataCash, a British payment services provider, to compete in the burgeoning market for online payments.

The world's second-biggest payments network said it had scoured the world for a business to boost its position in the fast-growing e-commerce business.

MasterCard said Aim-listed DataCash had the right products, geographic reach and management team to secure more business from vendors using its systems.

The US giant will pay 360p a share in cash – a 53 per cent premium on DataCash's closing price before the deal was announced.

DataCash shares soared 52 per cent to 355.25p.

The deal follows Visa's $2bn (£1.3bn) purchase last month of CyberSource in the US, which also provides security measures for online merchants. The payments giants are responding to increased competition from businesses such as eBay's PayPal as more business is done online.

Mastercard's chief executive, Ajay Banga, said buying DataCash was not a response to Visa's move and that it was an expansion in a market that was still in its early stages.

"It's the opportunity we see in the e-commerce space for the next decade. The story of e-commerce is only being written now," he said.

DataCash was founded in 1996. It sells a single software system that allows companies to process secure payments online and offline anywhere in the world.

MasterCard said DataCash's top-notch anti-fraud measures – developed for the online gaming industry – would be a big plus for its existing online payments business in Asia.

DataCash also gives MasterCard access to customers in European markets where online commerce has barely got going, and could be part of its push to take on Visa in the US, MasterCard products president Gary Flood said.

MasterCard's finance director, Martina Hund-Mejean, defended the hefty premium paid for DataCash by saying that the price was not out of line with similar deals and took into account the potential benefits DataCash would bring MasterCard.

DataCash is based in London, employs 362 people, and processed more than 240 million transactions for over 1,400 merchants in 2009.

MasterCard said DataCash's chairman, Ashley Head, and his team would stay on to build the business.

Mr Head said the acquisition would be a big opportunity for DataCash to expand internationally. The deal will also make him a multimillionaire in exchange for his stake in the company.

Deal reaps £173m for founders

DataCash's founders will make about £173m from the MasterCard deal. Its chairman Ashley Head is due £143m for his 43 per cent stake and former business development director Gavin Breeze will get about £30m for his 8.9 per cent.

The deal that made it all possible was DataCash's takeover in 2006 of Proc Cyber, which Mr Head launched and owned. DataCash paid Mr Head in shares, giving him half the company.

The deal combined Proc Cyber's anti-fraud technology – sold mainly to the online gaming sector – with DataCash's customer base and the company grew quickly.

Mr Head, 59, was born in Fulham, west London, "before it was posh" and worked for Chase Manhattan for 20 years, as well as in the Middle East and for MasterCard.

The deal is "a very special dream", he said yesterday, adding: "It's been interesting meeting some of the MasterCard guys again and comparing how much hair we haven't got."

Mr Breeze left the board in March 2008 because the Government cut the number of days he could work in the UK while enjoying the tax benefits of living in Jersey, but he remained a consultant.

Start your day with The Independent, sign up for daily news emails
News
US comedian Bill Mahr
people
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Sport
football
News
Rob Lowe
peopleRob Lowe hits out at Obama's snub of Benjamin Netanyahu
PROMOTED VIDEO
News
Davies (let) says: 'Everybody thought we were having an affair. It was never true!'
people'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Arts and Entertainment
Over their 20 years, the band has built a community of dedicated followers the world over
music
News
Staff assemble outside the old City Road offices in London
mediaThe stories, the writers and the changes over the last quarter of a century at Britain's youngest paper
Life and Style
The Oliver twins, Philip and Andrew, at work creating the 'Dizzy' arcade-adventure games in 1988
techDocumentary looks back at origins of the computer-games industry
Arts and Entertainment
Krall says: 'My hero player-singer is Elton John I used to listen to him as a child, every single record
music
News
Friends for life … some professionals think loneliness is more worrying than obesity
scienceSocial contact is good for our sense of wellbeing - but it's a myth that loneliness kills, say researchers
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Wu-Tang Clan will sell only one copy of their album Once Upon A Time In Shaolin
musicWu-Tang Clan and The Sexual Objects offer fans a chance to own only copies of their latest albums
News
i100
Environment
Number so freshwater mussels in Cumbria have plummeted from up to three million in the 20th century to 500,000
environment
Life and Style
Models – and musicians – on the catwalk in Dior Homme for the men’s 2015/16 fashion show in Paris
fashionAt this season's Paris shows, various labels played with the city boys' favourite
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us