Barclays has formed a strategic partnership with Brookfield Asset Management to gradually offload its payments acceptance business.
In February, Barclays announced it was considering a sale or partnership for this division, which has faced challenges in maintaining competitiveness against rivals like Stripe, Adyen, and Dojo. The bank has encountered difficulties with valuation, as potential investors have hesitated to invest after Barclays wrote down the business’s value by £300 million in December.
As part of the agreement with Brookfield, Barclays will invest approximately £400 million in the payments business over the first three years. Brookfield will contribute its expertise to enhance the range of services offered and aim to significantly improve financial performance in exchange for financial incentives.
From year three through to its seventh anniversary, Brookfield may acquire a 70% ownership stake in the business at a market-determined value, subject to pre-agreed conditions. Upon Barclays’ eventual sale, Brookfield’s initial financial incentive will convert into an additional 10% shareholding.
Matt Hammerstein, CEO of Barclays UK corporate bank, stated that finding a partner to transform the payments acceptance business aligns with their goal of becoming a simpler, better, and more balanced bank while delivering value to clients.
Ron Kalifa, head of financial infrastructure at Brookfield, emphasized the need for payments systems to adopt a digital-first and data-driven approach. He expressed enthusiasm about leveraging Brookfield’s global payments expertise to partner with Barclays in creating a leading market player capable of fostering the UK’s digital economy with innovative and integrated payment solutions.