Visa Brings Visa Europe Back into the Fold

Nov. 5, 2015

Visa Brings Visa Europe Back into the Fold This week, Visa Inc. announced it has agreed to acquire Visa Europe to mend a decade-old split that opened in 2008 when Visa went public in the U.S. At that time, Visa Europe remained an association owned by its issuing bank members, while operations in the U.S. and the rest of the world coalesced under the umbrella of Visa Inc. as a public company. Visa said it will acquire Visa Europe for a total value of $23 billion, though only $18 billion will be paid up front. The companies said creating a single entity will enable global clients to have a more seamless experience and give European clients access to Visa Inc.’s head start in innovative technology.

Visa Europe’s bank owners will benefit from "significant value for members both through the consideration paid and because the Board believes a combined Visa will be better positioned to serve the needs of customers going forward," according to Gary Hoffman, chairman of the Visa Europe Board.

Visa said the fact that 37 percent of expenditures by European consumers is still done through cash and checks, along with Europe’s status as an early adopter of mobile creates enormous opportunity to convert consumers there to electronic payments—especially in the area of card-not-present payments where company initiatives around tokenization, digital wallets, e-commerce and P2P payments will provide fertile ground for expansion in Europe.

The company expects to spend half a billion dollars integrating the two organizations and that the deal will negatively affect 2016 earnings.