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Mastercard Inc. has been active on the mergers-and-acquisitions front lately, and that’s going to continue, according to company president and chief executive Ajay Banga.
The acquisitions typically involve financial-technology firms in all corners of payments. Just two weeks ago, Mastercard announced that it had acquired Vyze Inc., the provider of a point-of-sale lending platform for merchants. That deal came on the heels of two other planned acquisitions Mastercard announced in March: payment-security services provider Ethoca Inc. and cross-border business-to-business payments provider Transfast. Mastercard struck the deal with Transfast after letting its bid for British cross-border specialist Earthport PLC lapse following a brief bidding war for that processor with Visa Inc.
Asked about all the activity by an analyst Tuesday morning during Mastercard’s first-quarter earnings call, Banga said “we have not changed our M&A strategy.”
“All of these are intertwined in the idea of building our new capabilities and new services,” he said. Mastercard plans to be present “across all rails of payment, not just card, but also non-card rails.”
Mastercard has a pipeline of 20 to 30 potential deals on which it is doing due diligence, according to new chief financial officer Sachin Mehra. But besides outright acquisitions, they can include minority investments and early-stage funding for startups.
Mastercard’s largest recent acquisition was its $920 million buyout of Vocalink Holdings Ltd., the London-based provider of the United Kingdom’s faster-payments system. Vocalink’s technology has found its way into faster-payment systems in the U.S. and other countries.
Asked about two pending massive payments-industry deals—the acquisition of First Data Corp. by Fiserv Inc. and the buyout of Worldpay Inc. by Fidelity National Information Services Inc. (FIS), Banga said “I fully expect to continue to partner with these folks.”
Meanwhile, Mastercard reported U.S. purchase volume of $392 billion in the first quarter, up 9% from a year earlier. Credit card purchase volume jumped 10% to $203 billion while debit volume rose 8% to $189 billion. Worldwide purchase volume rose nearly 12% on a currency-neutral basis to $1.09 trillion. Switched transactions increased 17% to 19.2 billion.
Mastercard posted net income of $1.86 billion, a 25% increase from $1.49 billion in 2018’s first quarter, on net revenues of $3.89 billion, up 13% on a currency-neutral basis from the year ago period’s $3.58 billion.
