Merger of Rapyd and Valitor

• Get document
• Case number: 13/2022
• Date: 24/5/2022
• Company:
  • Valitor hf.
  • Rapyd
• Sectors:
  • Financial services
• Policy Area:
  • Mergers
• Summary

  The Icelandic Competition Authority ("ICA") has completed its investigation into the acquisition of Rapyd Financial Network (2016) Ltd. ("Rapyd") of all shares in Valitor hf. ("Valitor"). Rapyd's subsidiary is Rapyd Europe hf., formerly known as Korta hf. The company is engaged in payment services in Iceland like Valitor. Rapyd intends to merge the operations of Valitor and Rapyd Europe hf.

  The merger primarily affects the markets for merchant acquiring in Iceland, i.e., acquiring at point of sale (regardless of settlement currency) and E-commerce merchant acquiring with settlement in ISK.

  Negotiations to settle the case with conditions aimed at eliminating the merger's detrimental effects on competition have led to a settlement where Rapyd commits to specific countermeasures. The commitments include inter alia that Rapyd undertakes to sell a diversified set of merchant contracts to a qualified buyer that corresponds to a greater share of the relevant market than the market share of Rapyd Europe hf. The settlement contains detailed conditions that ensure that the set of merchant contracts is diverse, among other things, in terms of merchants' size and industry classification. At the same time, the conditions are intended to prevent inconvenience to customers (merchants), but their right to choose a provider of merchant acquiring services will not be infringed.

  The buyer of the merchant contracts is Kvika banki hf. ("Kvika"), which will enter the market for merchant acquiring with the acquisition of the merchant contracts. Given the services provided by the merged company to Kvika for a limited period, consisting primarily of technical implementation and settlement with the international card schemes, Rapyd has committed to establishing a certain separation within the merged company to prevent it can exploit business-sensitive information about Kvika's operations. Moreover, Rapyd may not repurchase the sold merchant contracts for ten years and may not compete for business with the merchants in the traded merchant contracts for a certain period after Kvika's temporary service purchases come to an end.

  To ensure that the settlement has the intended impact, the ICA also required Kvika to agree to certain commitments in a separate settlement with the ICA, where Kvika undertakes inter alia to transfer the aforementioned temporary service purchases before certain deadlines from the merged company to another service provider that is not a significant player in the market for merchant acquiring in Iceland. This is important to ensure Kvika's lasting competitive independence from the merged company.