Payment processor Nets acquired for $5.3 billion

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US private equity firm Hellman & Friedman acquired Denmark-based payment processor Nets for $5.3 billion, according to The Wall Street Journal.

Nets enables merchants, corporations, and banks to accept and process credit and debit card transactions, as well as online payments, across the Nordic region. The offer — which marks one of the largest private equity buyouts in Europe in recent years — comes after several buyers approached the payment company.

Firms are becoming increasingly interested in payment companies, as consumers move away from cash and toward mobile payments. 

• This acquisition is part of a growing trend. Over the last few months, there have been several announcements of similar processor buyouts. Worldpay, the UK’s largest payment processing firm, was recently acquired by Vantiv for £8 billion (USD $10.4 billion). And two private equity firms, Blackstone and CVC Capital Partners, acquired UK-based processor Paysafe for £2.9 billion (USD $3.7 billion). These deals are indicative of massive processor consolidation as firms attempt to capitalize on a shift from cash transactions to electronic payments and e-commerce.
• Acquisitions are beneficial to firms, and allow them to adapt to the shift in consumer behavior. Contactless payments are on the rise in Europe — there were 3 billion contactless transactions in Europe over the last 12 months, which is nearly triple that of the previous year, according to a Visa Europe study released in May — and acquiring payment companies will allow firms to adapt to the technology and remain competitive. Acquiring payment companies with digital capabilities could enable private equity firms to enter a lucrative industry by capitalizing on this shift in consumer habits. 

Digital disruption is rocking the payments industry. But merchants, consumers, and the companies that help move money between them are all feeling its effects differently.

For banks, card networks, and processors, the digital revolution is bringing new opportunities — and new challenges. With new ways to pay emerging, incumbent firms can take advantage of solid brand recognition and large customer bases to woo new customers and keep those they already have.

And for consumers, the digital revolution is providing more choice and making their lives easier. Digital wallets are simplifying purchases, allowing users to pay online with only a username and password and in-store with just a swipe of their thumb. 

Dan Van Dyke, senior research analyst for BI Intelligence, Business Insider's premium research service has written a detailed report that explores the digital payments ecosystem today, its growth drivers, and where the industry is headed. The report also: 

• Traces the path of an in-store card payment from processing to settlement across the key stakeholders.  
• Forecasts growth and defines drivers for key digital payment types through 2021.
• Highlights five trends that are changing payments, looking at how disparate factors, such as surprise elections and fraud surges, are sparking change across the ecosystem.

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