US credit card processor Vantiv has agreed to buy Britain's Worldpay for £7.7 billion in a move expected to trigger further deals.
Payments companies have become targets for credit card companies and banks seeking to capitalise on a switch from cash transactions to paying by smartphone or other mobile device.
Danish payment services firm Nets has also revealed that it had been approached by potential buyers.
Shares in Worldpay rose by nearly 28% on Tuesday when Britain's largest payments firm said it had received approaches from both Vantiv and JPMorgan, which is Worldpay's corporate broker.
The US bank said that while it had shown a preliminary interest, it does not plan to make a rival bid.
Under the terms revealed, Vantiv will pay 55 pence in cash, 0.0672 of a new Vantiv share and a 5 pence cash dividend per Worldpay share, totalling 385 pence per share.
Although this is an 18.9% premium to Worldpay's closing share price on Monday, it is below the 409.5 pence hit on Wednesday before the announcement.
The announcement came only 20 months after Worldpay listed in London with a £4.8 billion price tag.
Shareholders in the UK firm will own about 41% of the new company, which will be run by Vantiv Chief Charles Drucker and Worldpay CEO Philip Jansen.
Set up in 1989, London-based Worldpay was spun out of Royal Bank of Scotland to private equity firms Bain Capital and Advent International in 2010.
The firm employs 4,500 people, and says it processes around 31 million mobile, online and in-store transactions every day.
While banks have been trying to develop and buy more sophisticated technology, companies like PayPal and Worldpay have gained a large market share as consumers have adopted online shopping and cashless transactions.
Analysts say the most likely target is Worldpay's e-commerce business, especially outside the US where Vantiv is largely focused.
Worldpay says it supports 400,000 merchants in 126 currencies across 146 countries.
Worldpay's e-commerce payments revenue, which accounts for more than a third of its total, rose by 21.7% to £386.6m in 2016, driven by new business wins and strength in its global retail and digital content units.
