Allied Irish Banks (AIB) has signed an agreement with US e-payments firm First Data to establish a Dublin-based merchant acquiring joint venture.
AIB says its card acquiring business in Ireland will form "the principal basis" of the JV, which will trade as AIB Merchant Services and provide card acquiring services in Ireland, the UK and elsewhere in Europe.
The new division will deliver additional products and services and enhanced functionality to its 30,000 merchant customers as well as new clients, says AIB.
Commenting on the development, Donal Forde, managing director of AIB Bank, Republic of Ireland division, says: "We are positioning ourselves for substantial future growth in this business, in Ireland, the UK and further afield.
"The combination of AIB's strong track record in this business and First Data's global payments and merchant acquiring expertise and world class systems will provide the ideal platform for business expansion and profitable growth in a Single European Payments Area (Sepa) environment."
The bank currently operates Irish and UK merchant acquiring units and says the total value of the gross assets of these is approximately EUR5.5 million. However as part of this agreement, First Data will have an option to enable the JV to acquire AIB's card acquiring business in the UK following the initial transaction.
The transaction is expected to have a neutral effect on AIB's earnings per share in 2008
Both AIB and First Data will be involved in the day-to-day operations of the new venture and will be represented on its board of directors.