The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has dipped slightly this morning after the banking giant announced a joint-venture agreement with Worldline.
Worldline is the largest European – and fourth largest in the world – provider of payment services. The company has more than 20,000 employees based in more than 50 countries, offering customers highly-secured transactions on an array of platforms.
The ANZ share price finished from yesterday's market close at $23.18 and is now trading at $23.15, down 0.13%.
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Joint-venture agreement
ANZ today advised it will partner up with Worldline to provide its small business, commercial and instructional customers in Australia with the latest point-of-sale and online payments technology. The new deal will see users be able to process payments that are fast, reliable and more secure than traditional services.
ANZ stated that the new joint venture arrangement will form a -new merchant acquiring group. Under the terms, the bank will hold a 49% interest in the group, with the remaining 51% going to Worldline. The agreed contract will last for an initial 10 years.
As part of the deal, ANZ will exclusively refer new merchants to the group. In return, the joint venture will refer merchants back to the bank's products including specific financing facilities.
ANZ believes once the transaction is finalised, its level 2 CET1 capital ratio will increase by around 5 basis points.
The formal arrangement is due to be completed sometime late next year, pending regulatory and other approvals.
What did management say?
ANZ group executive of Australia retail and commercial, Mark Hand, welcomed the collaboration, saying:
Receiving fast and secure payments is key to running a successful business, and this partnership will provide our customers with access to some of the most advanced payments technology currently available, as well as future innovations, to improve the speed and security of point-of-sale and online payments.
The partnership also responds to the fast-changing way that consumers want to pay for goods and services, particularly in a post-COVID environment.
Worldline chair and CEO Gilles Grapinet added:
The strategic alliance with ANZ is a landmark transaction for Worldline.
In a rapidly changing industry Worldline will be at ANZ's side to leverage focused technical capabilities to provide the best customer proposition and user experience across all segments. Our long-term and exclusive joint venture is based on our shared vision to deliver value added merchant acquiring products and services in Australia.
About the ANZ share price
The ANZ share price has been climbing since hitting a multi-decade low of $14.10 in the March coronavirus rout. Its shares are still down 7% since the start of the year.
The company has a market capitalisation of $65.2 billion and a price-to-earnings (P/E) ratio of 14.1.
