American payment services giant Visa Inc. is acquiring Ripple partner Earthport Plc, a payment network for cross-border transactions, Reuters U.K. reported Dec. 27.
Founded in 1997, London-based Earthport is a financial services firm that offers cross-border payments service to banks and financial institutions. Earthport is a partner of tech company Ripple, where the partnership is aimed at integrating the Ripple protocol into the firm’s existing payment network to improve international transactions.
Per Reuters, the acquisition will be made for £198 million ($251 million), or 30 pence ($0.38) per each Earthport share, which exceeds the stock’s Monday closing price of 7.45 pence by over four times.
Earthport’s shares, which are listed on the London Stock Exchange’s secondary market, have reportedly slumped over 28 percent this year following growing losses and expenses. This reportedly made the company consider “fundamental” changes in its strategy.
In 2016, Earthport launched a single application programming interface (API) designed to connect banks to Ripple’s distributed ledger protocol when processing cross-border payments, according to financial and business news outlet Finextra. The development was reportedly set to enable banks to overcome budgetary, technology and compliance constraints.
In October, Cointelegraph reported that Visa was readying its blockchain-based digital identity system “Visa B2B Connect” for cross-border payments for launch in the first quarter of 2019. The system reportedly tokenizes sensitive business data – such as banking details and account numbers – granting them a unique cryptographic identifier that will be used for transactions on the platform.
In June, Visa said that their card payments were experiencing disruptions across the United Kingdom and Europe, while the Payment Systems Regulator asserted that the problem was isolated solely to Visa card payments. Without naming the reason, Visa tweeted that they were “investigating the cause and working as quickly as possible to resolve the situation.”