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.

VIDEO
News
Plans to decriminalise non-payment of television licence fees would cost the BBC £500m according to estimates drawn up within the Corporation
people
News
people
Life & Style
The new low cost smartphone of Motorola, 'Motorola Moto G', is displayed in Sao Paulo, Brazil on November 13, 2013. The smartphone, with dimensions 65.9mm W x 129.9mm H x 6.0 - 11.6mm D is equipped with a Qualcomm Snapdragon 400 with quad-core 1,2 GHz CPU, a 4.5-inch display and Android Operating System 4.3 and a suggested price of $ 179 USD.
techData assessing smartphones has revealed tens of millions of phones are at risk of being harvested
Arts & Entertainment
Jessica Pare as Megan Draper and Jon Hamm as the troubled, melancholy Don Draper
tvAnd six other questions we hope Mad Men series seven will answer
Arts & Entertainment
Cody and Paul Walker pictured in 2003.
film
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Data Analyst - Financial services, Client data, LEI

£40000 - £50000 per annum + BONUS + BENEFITS: Harrington Starr: A leading, Cit...

Management Consultancy - Operational Research Analysts

£35000 - £50000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...

Corporate Actions Consultant - Market data, ISO15022, presales

£45000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: Corporate Acti...

Prudential Risk/Operational Risk Associate - London

£350 - £400 per day: Harrington Starr: An opportunity has arisen at a FCA regu...

Day In a Page

Homelessness: Why is the supported lodgings lifeline under threat?

Why is the supported lodgings lifeline under threat?

Zubairi Sentongo swapped poverty in Uganda for homelessness in Britain. But a YMCA scheme connected him with a couple offering warmth and shelter
A History of the First World War in 100 Moments: When the world’s biggest shed took over Regent’s Park

A History of the First World War in 100 Moments

When the world’s biggest shed took over Regent’s Park
The pain of IVF

The pain of IVF

As an Italian woman vows to keep the babies from someone else’s eggs, Julian Baggini ponders how the reality of childbirth is often messier than the natural ideal
Supersize art

Is big better? Britain's latest super-sized art

The Kelpies are the latest addition to a growing army of giant sculptures. But naysayers are asking what a pair of gigantic horse heads tells us about Falkirk?
James Dean: Back on the big screen

James Dean: Back on the big screen

As 'Rebel without a Cause' is re-released, Geoffrey Macnab reveals how its star perfected his moody act
Catch-22: How the cult classic was adapted for the stage

How a cult classic was adapted for the stage

More than half a century after it was published 'Catch-22' will make its British stage debut next week
10 best activity books for children

10 best activity books for children

Keep little ones busy this bank holiday with one of these creative, educational and fun books
Arsenal 3 West Ham United 1: Five things we learnt from the battle between the London sides

Five things we learnt from Arsenal's win over West Ham

Arsenal still in driving seat for Champions League spot and Carroll can make late charge into England’s World Cup squad
Copa del Rey final: Barcelona are paying for their complacency and not even victory over Real Madrid will put things right

Pete Jenson on the Copa del Rey final

Barcelona are paying for their complacency and not even victory over Real Madrid will put things right
Rafa to reign? Ten issues clay courts will serve up this season

Rafa to reign? Ten issues clay courts will serve up this season

With the tennis circus now rolling on to the slowest surface, Paul Newman highlights who'll be making the headlines – and why
Exclusive: NHS faces financial disaster in 2015 as politicians urged to find radical solution

NHS faces financial disaster in 2015

Politicians urged to find radical solution
Ukraine crisis: How spontaneous are the pro-Russian protests breaking out in Ukraine’s east?

Ukraine crisis

How spontaneous are the pro-Russian protests breaking out in Ukraine’s east?
A History of the First World War in 100 moments: The first execution at the Tower of London for 167 years

The first execution at the Tower of London for 167 years

A history of the First World War in 100 moments
Fires could turn Amazon rainforest into a desert as human activity and climate change threaten ‘lungs of the world’, says study

New threat to the Amazon rainforest:

Fires that scorch the ‘lungs of the Earth’
Liverpool, Chelsea and Manchester City: And the winner of this season’s Premier League title will be...

Who’s in box seat now? The winner of the title will be ...

Who is in best shape to take the Premier League prize?