MasterCard Inc. on Thursday said it agreed to buy London payments technology developer DataCash Group PLC for $520 million in a move aimed at growing its e-commerce presence.
DataCash, which processed more than 240 million transactions for more than 1,400 merchants in 2009, provides fraud and payment gateway services. The acquisition should put MasterCard in a "pretty good position as we move forward" in the e-commerce space, Gary Flood, the Purchase, N.Y., card payment network's president of global products and solutions, said during a conference call.
MasterCard's announcement comes a month after rival payments network Visa Inc. completed its $2 billion acquisition of CyberSource Corp., also a developer of e-commerce services.
Both MasterCard and Visa have been fighting to fend off eBay Inc. subsidiary PayPal, which allows customers to pay for online purchases without using a payment card.
Ajay Banga, MasterCard's president and chief executive, said the DataCash acquisition was not a response to Visa's CyberSource deal but rather a way to seize on untapped opportunities it sees in the e-commerce market.
"This is an open gateway and agnostic" to payment brands, Banga said during the call, adding he is sure PayPal will be a payment method used to make purchases over it.
"The story of e-commerce is only being written now," he said.
MasterCard expects to complete the purchase by the end of October pending closing requirements.
