FILE PHOTO - A Visa credit card is seen on a computer keyboard in this picture illustration taken September 6, 2017. REUTERS/Philippe Wojazer/Illustration

(Reuters) - Visa Inc on Friday sweetened its offer for payment company Earthport Plc to about 247 million pounds ($319.84 million), pushing past rival Mastercard Inc’s earlier bid and setting up a showdown for the assets.

A unit of Visa offered 37 pence in cash for each Earthport share, a 23 percent premium to its initial bid and 12 percent higher than Mastercard’s offer last month.

Earthport shares have risen more than five-fold to 38.80 pence since Visa first offered to buy the company.

Earthport, which had backed the Mastercard bid, said it was now recommending that shareholders accept the increased Visa offer.

Mastercard said it was considering its options and urged Earthport shareholders to take no action in response to Visa’s announcement on Friday.

Both Visa and Mastercard have cited the same reason for their interest in Earthport - the deal would allow it to expand its cross-border network service.

Payment processing has become one of the hottest areas for deal making in the last two years, driven by technological changes in the way consumers pay for products.

Earthport, whose shares fell 28 percent last year until the first bid, offers a lower-cost option to traditional payments systems by allowing banks and money transfer firms to have a single relationship instead of multiple ties with various payments channels around the world.

($1 = 0.7723 pounds)