(Bloomberg) — Dubai-based Mashreqbank PSC has carved out its payments arm into a new unit, NeoPay, focused mainly on helping businesses handle credit and debit card payments amid a pandemic-fueled e-commerce boom.
Mashreq’s new unit will fold in payment services with the lender’s existing merchant acquiring business, which helps process card-based payments. It will be led by Vibhor Mundhada, previously vice president and head of merchant acquiring.
The merchant acquirer business is among the top three in the United Arab Emirates, Mashreq said. It processes about $22 billion across sectors on an annualized basis and handled over 300 million transactions last year.
The lender’s decision to consolidate and grow its payments business comes at a time when banks globally are seeking to offload payment operations as they struggle to compete with specialist providers.
Larger rival First Abu Dhabi Bank PJSC carved out its own payments business last year, and subsequently sold 60% of the unit to Brookfield Business Partners LP.
Bloomberg reported in February that Mashreq was also exploring a sale of its payments business, though the lender has said it’s not currently in negotiation with potential buyers.
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