Barclays has announced a strategic partnership with Brookfield Asset Management to transform its payments business, previously known as its merchant acquiring unit. This collaboration aims to create a standalone entity, with Barclays investing approximately £400 million over the next three years to enhance the business’s capabilities and market position.
Key takeaways
- Barclays will invest £400 million in its payments business over three years.
- Brookfield may acquire up to 80% of the payments unit within seven years.
- The partnership aims to create a standalone entity focused on payment processing and related services.
- Barclays will retain a 20% stake in the business post-sale.
Details of the partnership
The deal, announced on April 17, 2025, marks a significant shift for Barclays as it seeks to refocus its operations and improve performance. The payments business, which processes transactions for retailers, has been under review for over a year, with Barclays’ CEO CS Venkatakrishnan indicating that the bank was no longer the best owner for the unit.
Under the terms of the agreement, Barclays will maintain full ownership of the payments business for the first three years. After this period, Brookfield will have the option to acquire a 70% stake at a market valuation, contingent on Barclays recovering its initial investment. If the sale proceeds, Brookfield’s financial incentive will convert into an additional 10% stake, bringing its total ownership to approximately 80%.
Investment and transformation plans
Barclays plans to deploy the £400 million investment primarily in the first three years to enhance the payments business’s infrastructure and service offerings. This investment is expected to support the development of innovative payment solutions that cater to the evolving needs of clients in the digital economy.
The payments business will continue to operate under the "Barclaycard Payments" brand and will remain the exclusive provider of payment acceptance services to Barclays’ clients for at least the next decade. This strategic move is part of Barclays’ broader plan to simplify its operations and focus on core areas of strength.
Market context and implications
The partnership comes at a time when the payments processing sector is undergoing significant changes, with increasing competition and a shift towards digital solutions. Barclays’ decision to partner with Brookfield reflects a growing trend among banks to divest from certain operations and seek partnerships that can drive growth and innovation.
Brookfield, which has been expanding its footprint in the financial infrastructure space, sees this partnership as an opportunity to leverage its expertise in payments to create a market leader in the UK. The firm has previously invested over $5 billion in financial infrastructure, indicating its commitment to this sector.
Conclusion
The strategic partnership between Barclays and Brookfield represents a pivotal moment for Barclays’ payments business, aiming to enhance its market position and service offerings. With a clear investment plan and a pathway to potential ownership transfer, both parties are poised to benefit from this collaboration as they navigate the evolving landscape of payment processing.
Sources used in this article
- Yahoo is part of the Yahoo family of brands, Yahoo Finance.
- Brookfield strikes deal for Barclays’ payments business, Financial Times.
- Barclays and Brookfield enter into strategic partnership, Barclays Group.
- Barclays to sell stake in British payments business to Brookfield, Reuters.
