Global payment solutions provider TSYS will buy prepaid debit card provider NetSpend in a cash transaction valued at approximately $1.4bn.

TSYS will offer NetSpend shareholders $16 in cash for each share of NetSpend common stock.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Philip Tomlinson, chairman of the board and chief executive of TSYS, said the acquisition would complement TSYS’s strong presence in prepaid processing.

He added: "By acquiring NetSpend, we gain a leadership team with deep prepaid experience, a company with scalable technology and a differentiated product offering customised for the partners and channels they serve.

"NetSpend’s mission is to empower consumers with the convenience, security and freedom to be self-banked, and this promise aligns with TSYS’ people-centered payments approach that is expected to add significant capabilities in terms of future revenue growth for our companies."

The transaction is expected to close in mid-2013.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In 2007, Cards International reported how Capital One’s $700m acquisition of NetSpend collapsed, with Capital One expecting credit losses of between $4.9bn and $5.5bn in 2008.

Now Dan Henry, chief executive of NetSpend, will join the TSYS executive team.

He said: "We will be able to offer our unique products and services to the unbanked consumer faster than ever before.

NetSpend currently serves over 2.4m accounts – 46% of which are direct deposit, and its consumers can purchase prepaid debit cards at more than 62,000 distributing merchant locations, including at convenience stores, insurance providers and tax preparers.

Along with Green Dot Corp., NetSpend was one of the pioneers of prepaid cards.

Related articles:

Credit crunch forces Capital One to abandon NetSpend acquisiton

The Debanked – watch out for them if you are into prepaid