Barclays has entered a strategic partnership with Brookfield Asset Management that will work towards offloading the UK bank's payments acceptance business "over time".
Barclays said in February that it was exploring a sale or partnership for the payments acceptance business, which has struggled to remain competitive in the face of increasing competition from the likes of Stripe, Adyen and Dojo.
However, valuation has been a sticking point for Barclays, with potential investors baulking about paying good money after bad. In December, the bank wrote down its valuation of the business by £300 million.
The deal with Canadian outfit Brookfield will see Barclays invest around £400 million in the business, the majority of which will occur during the first three years.
For its part, Brookfield will provide expertise to support an effort to broaden the range of services that the business offers and "meaningfully" improve its financial performance in exchange for a financial incentive.
After year three, and up to its seventh anniversary, Brookfield will be able to acquire a 70% ownership interest in the business at a market value to be determined at the time, and subject to certain pre-agreed conditions. Upon the sale by Barclays, Brookfield’s initial financial incentive will convert into an additional 10% shareholding.
Matt Hammerstein, CEO, Barclays UK corporate bank, says: "Finding a partner to support us in transforming our payment acceptance business, in a way that will enable us both to serve our clients’ interests better and pursue a path to releasing value from the business, demonstrates clear execution of our three-year plan to become a simpler, better and more balanced bank."
Ron Kalifa, head, financial infrastructure, Brookfield, adds: "Payments systems need to adopt a digital-first and data-led approach to provide world-class solutions to clients.
"We’re excited to draw on our deep global payments expertise to partner with Barclays and together deliver the operational transformation required to create the market leader, well-positioned to drive the growth of the UK’s digital economy with innovative and integrated payment solutions."