Wirecard buys Citi Prepaid Card Services to enter USA

German banking software company Wirecard AG has taken its first step to enter the North American market by agreeing to buy Citi Prepaid Card Services for undisclosed terms, the two companies said on Wednesday.

Wirecard estimated that the acquired firm would add more than $20 million to its earnings before interest, tax, depreciation and amortization (EBITDA) in the 2017 fiscal year. It will be taking on all the Citi unit's 120 employees.

The German company has been looking to expand into the U.S. market as part of a strategy to grow beyond Europe and become a global payments player, seeking to regain momentum after a battering from short-sellers early this year.

Wirecard, based near Munich, processes payments for 22,000 retailers and online merchants worldwide. It is the second largest payments processor in Europe behind WorldPay and has expanded through acquisitions in recent years into Southeast Asia, Middle East and Latin America.

The company said in a statement it expected the deal to close as early as the fourth quarter, subject to regulatory approval.

Wirecard said Citi Prepaid Card Services had launched over 2,500 schemes for top companies and brands, mostly in North America and with a focus on incentive and compensation cards targeted at employees.

It said the prepaid card business would be integrated with Wirecard's global payments platform. It cited a forecast from Global Industry Analytics that predicts that the volume of the global prepaid card market could grow to $3.1 trillion by 2022.