Barclays has agreed a complex strategic transaction with Brookfield Asset Management that could see the Canadian private equity giant assume majority ownership of the British bank’s payments business over the next seven years.
Barclays strikes deal with Brookfield
The agreement marks the culmination of more than a year of deliberations by Barclays to offload a non-core unit and refocus on more profitable banking operations in the UK.
The deal outlines a multi-phase process in which Brookfield will initially acquire a 10% stake in the standalone payments entity, with the option to increase its holding to 70% after three years.
This option, exercisable at a future market valuation, may be further expanded to 80% if Brookfield converts a separate incentive structure.
Barclays, which will remain the sole shareholder for the initial three-year period, expects to retain a minority 20% interest in the business long term, contingent on recovering its full investment.
£400 Million Capital Injection
Underpinning this restructuring is a £400 million capital injection from Barclays, the majority of which will be deployed in the early stages to support the unit’s independence and growth trajectory.
The business, formerly Barclays’ merchant acquiring arm, will be transformed into a standalone entity offering a range of services including card payments, contactless and online processing, fraud protection, and retail system integration.
This move forms part of CEO CS Venkatakrishnan’s broader overhaul of the bank’s UK operations.
Barclays previously took a £350 million write down on its payments and German consumer finance divisions, with the latter sold to Austria’s Bawag Group.
Executives cited the increasing complexity and capital demands of the payments space as key reasons behind the strategic shift.
Interest in the Payments Sector
Brookfield’s interest in the payments sector reflects a growing appetite among infrastructure investors to diversify beyond traditional real estate and into digital financial assets.
The Barclays agreement is the first acquisition under Brookfield Financial Infrastructure Partners, a dedicated fund launched to pursue digital and payments investments.
The firm has also recruited Sir Ron Kalifa – former Worldpay CEO and author of the UK’s Kalifa Review into fintech – to lead its financial infrastructure strategy.
The deal arrives amid declining valuations across the European payments sector, driven by macroeconomic pressures and subdued revenue forecasts for incumbents such as Worldline, Nexi, and Adyen.
For Barclays, the transaction aligns with a broader industry trend in which large banks are scaling back payments exposure, recognising the advantage of scale and specialisation in an increasingly competitive landscape.
While the transaction will not materially impact Barclays’ financial outlook, it signifies a decisive strategic pivot – one that reshapes its position in the payments ecosystem while setting a new precedent for private equity involvement in UK financial infrastructure.
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