The new entity will be known as Global Payments Asia-Pacific and will be headquartered in Hong Kong with a headcount of approximately 120 employees.
It will be 44% owned by HSBC, while Global Payments will hold a 56% interest for which it paid HSBC $67.2 million. The respective holdings of the two firms will also be reflected in the board composition, with three directors nonminated by Global Payments and two by HSBC.
The completion of the joint venture follows the September 2005 announcement that HSBC was planning to join forces to expand its credit card merchant acquiring business in the region. Under the agreement, HSBC will transfer its existing such businesses in 10 countries and territories to the new venture, which will be comprised of outlets in Brunei, China, Hong Kong, India, Macau, Malaysia, the Maldives, Singapore, Sri Lanka and Taiwan. The new company will provide services to an existing customer base of 45,000 merchant outlets in these countries.
The formation of the joint venture will also a create a marketing alliance wherein HSBC will exclusively refer new card merchant clients to the new company for payment processing in the 10 countries and territories where it will operate.
ôWe have seen substantial growth in the credit card business throughout Asia in recent years,ö says Michael Smith, president and chief executive officer of HSBC. ôWe expect this growth to persist as Asia continues to be supported by sturdy economic conditions and rising personal consumption. This joint venture will strengthen our capabilities in the card merchant acquiring business as Global Payments Asia Pacific will benefit from HSBCÆs strong presence in the region as well as Global PaymentÆs technological expertise.ö
Ian Courtnage will become managing director of the joint venture. Prior to taking on this new job with Global Payments Asia Pacific, Courtnage was a senior manager within HSBC's card merchant acquiring business.
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