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CVC Capital Partners have moved decisively to buy a majority stake in the UK online payments provider Skrill, paying Investcorp around €600m. This purchase comes at a key time as the pace of change in the payments world is accelerating.
Skrill has developed quickly to become one of Europe’s largest online payment systems and, with over 36 million account holders, among the world's biggest independent digital wallet providers. Skrill provides money transfer services worldwide and is used as the payment platform for several major on-line gambling sites. Skrill originally used the MoneyBookers brand in the UK and is also the new sponsor of the Football Conference.
This deal appears good news all round. Investcorp receives an 8-fold return on the initial investment and retains a minority stake. CVC now have an investment with a strong position in the rapidly-evolving payments industry and Skrill will have access to more expertise and capital as it develops the business.
The Payments world is set for a period of significant change. The catalysts for this change are the rapid rise in smartphone penetration and online transactions and the ready acceptance of mobile apps and digital wallets. The forces unleashed by the evolution of payments and the rise of mobile will also have significant implications for the larger banks. As new competitors emerge, they will now have to update their systems and customer interface more rapidly and more comprehensively than would have otherwise been the case.
The sea change in payments and banking will have major repercussions for the UK Software and IT Services industry and this will be a central theme for our forthcoming FinancialServicesViews research stream.
