Barclays has reached an agreement with Brookfield Asset Management that will see the bank offload its payments business.

Under the terms of the deal, the pair will work to create a standalone entity “over time”, Barclays said.

Barclays plans to invest approximately £400m into the new business, the majority of which will be in the first three years, while Brookfield will provide expertise to support the transformation and would be entitled to a financial incentive, linked to performance.

Following the third year of the partnership, Brookfield may acquire a 70% ownership interest in the business, which would take its shareholding to 80%. Barclays said it “strongly believes” in the long-term prospects of the business and following the intended sale, would expect to retain an ownership interest of 20%.

The business will continue to use the “Barclaycard Payments” brand and will be the sole payment acceptance services provider to Barclays’ clients for a minimum of 10 years.

CEO of Barclays UK Corporate Bank, Matt Hammerstein, commented: “Finding a partner to support us in transforming our payment acceptance business, in a way that will enable us both to serve our clients’ interests better and pursue a path to releasing value from the business, demonstrates clear execution of our three-year plan to become a simpler, better and more balanced bank.

“We have a leading position in the UK, but we know that our payments clients are increasingly looking for integrated connectivity, an end-to-end service and tailored technological solutions from their payments providers. Our partnership with Brookfield recognises the opportunity within our business to go beyond the foundations we have built to date.”

The deal marks the first transaction for Brookfield Financial Infrastructure Partners, a dedicated strategy part of Brookfield’s private equity business, focused on investing in digital assets that enable the movement of money.

Vice chair and head of financial infrastructure at Brookfield, Sir Ron Kalifa, added: “Payments systems need to adopt a digital-first and data-led approach to provide world-class solutions to clients.

“We’re excited to draw on our deep global payments expertise to partner with Barclays and together deliver the operational transformation required to create the market leader, well-positioned to drive the growth of the UK’s digital economy with innovative and integrated payment solutions.”

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