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Mastercard drops Earthport bid, agrees to buy Transfast

Mastercard has announced an agreement to buy Transfast, a cross-border money transfer network that moves funds between accounts.

The agreement comes soon after Mastercard dropped an effort to acquire U.K.-based payments firm Earthport, after a public bidding war erupted with Visa.

Transfast, which currently backs the Mastercard Send P2P and business-to-business payment service, will increase Mastercard’s presence in the account-to-account space. Additionally, it will enhance compliance capabilities and offer more robust foreign exchange tools.

"We believe Transfast gives us the strongest platform to immediately enhance our cross-border capabilities and further deliver on our strategy," Michael Miebach, chief product officer at Mastercard said in the announcement.

Mastercard said the transaction would help businesses deal with higher costs, compliance requirements and limited predictability of the completion time for transfers.

Samish Kumar, CEO of Transfast, said the two companies have a substantial number of synergies and said the new agreement will help them spark additional growth.

"Over the past 12 years we have grown our capabilities to connect, track and settle transactions with almost every bank around the world via our curated and extensive network," he said in the announcement.

Transfast is backed by private equity firm GCP Capital Partners, a $1.4 billion fund mainly focused on fintech, and Apis Partners. Terms of the deal were not disclosed.