French hotels and services group Accor and MasterCard on Tuesday unveiled a joint venture to grab a slice of the burgeoning European market in flexible payment services. The groups aim to benefit from growing demand for so-called prepaid services which range from cash cards for welfare claimants and contract workers without bank accounts to gift cards for coffee shops and credit cards for companies to better manage employee expenses.
The PrePay Solutions venture plans to take some five percent of a sector expected to be worth 130 billion ($169 billion) within five years. "We think the growth is going to be very, very important," Javier Perez, president of the European division of Mastercard, the world's second-largest credit card network, told a press conference. The companies, which have been discussing co-operation for around two years, said Accor would take 67 percent of the venture with MasterCard owning 33 percent. Investments would total "several million euros, no more", Accor Chief Executive Gilles Pelisson said.
Shares in Accor were 1.1 percent lower at 34.135 euros by 1318 GMT, in line with the drop in the French benchmark CAC 40 index. Accor stock is down 1.7 percent this year, giving it a market value of 7.6 billion euros. MasterCard has risen 13 percent this year and has a market value twice that of its French partner.
Accor, whose mid- and upscale hotel business is feeling the impact of the financial crisis on demand, is looking to accelerate growth at its Accor Services business to 10-18 percent organically after 2010 from 8-16 percent currently.