October 2023 – Business of Payments newsletter

Following Adyen’s catastrophic H1 results, Worldline was next to shock the financial markets. Shares in the French processing giant fell 50% as management warned of lower profits due to “economic slowdown in some of our core countries,” notably Germany. Worldline also said it would terminate some German merchants generating €130m annual revenue. This move is believed to be linked to the German gambling regulator’s decision to clamp down on EU gamers which don’t have a local licence. In more bad news Bafin, the financial regulator, has restricted new customer onboarding at Payone, Worldine’s joint venture with German savings banks, citing money laundering and fraud concerns.

In a minor consolation for Worldine shareholders, the company bought the acquiring business of Banca del Fucina for €25m. The deal adds 5,500 POS generating €500m payment volume. The Rome-based bank will sell Worldline’s products through its 36 branches.

Nexi is another processor under pressure. The Italian group’s stock price has sunk 30% since its IPO in 2019 despite reporting good progress on integrating acquisitions of Nets (Nordics) and Concardis (Germany). Private equity groups, including CVC, are rumoured to be preparing bids although the Italian government still has a veto on any sale.

Meanwhile, Nexi still can’t find a buyer for Ratepay, the German BNPL business inherited from Concardis. Nexi had valued Ratepay at €1bn but is reportedly willing to accept a much reduced figure.

Lex Populi chart showing payment providers are not keeping up with card networks – share prices (rebased in $ terms)

The relative underperformance of payment processors reflects concerns that payment acceptance is becoming commoditised. Checkout.com disagrees. In a new report, the London based processor says acceptance is becoming more complex and that the additional complexity brings margin opportunity. Checkout highlights the rise in cross-border payments, additional friction generated by strong customer authentication (SCA) and disjointed application of network tokenisation by issuers as factors running in its favour. You can read the full report here or a good summary by Enemigo.

Bucking the trend Boku, a London-listed processor, reported revenue up 26% in H1 2023as it successfully manages the transformation from carrier billing to global APM provider. Boku has a stellar client list including Amazon and Facebook and says it is now competing successfully with Thunes, dLocal and PPRO.

In corporate news Shift4, a US processor with strong in-house vertical software products, finally got the regulatory green light to proceed with the $575m acquisition of Credorax Finaro, the Israeli HQ’d acquirer/processor. The enlarged group will have the strong capability on both sides of the Atlantic that Shift4 needs to support Starlink, its marquee customer.

Rock solid delivery is at the heart of payment processing. If you can’t guarantee this, you won’t get a hearing for those wonderful value added services the product team has invented. Square went down for over 24 hours worldwide due to a DNS issue caused by “an utter failure in system testing.” Shift4 saw a golden opportunity to poach Square customers.

A screenshot of a social media post

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Although the outage will make it harder for Square to sell to larger merchants, established enterprise acquirers can have similar issues. Worldine went down one recent Saturday, causing chaos in supermarkets across France.

BNP Paribas is launching a marketplace payments start up in H1 2024. Called Panto (oh yes it is), the new business will include acceptance, pay-outs and automated boarding and is aimed at BNP’s current customers. Panto will be built by 321founded who claim to have put together a beta version in just 6 months. 

Mollie, the Dutch payment unicorn which lost €121m in 2022, has announced further staff cutbacks. Following the departure of the CEO and CFO, 10% of employees will lose their jobs. Founder, Adrian Molle, “denied that the company board lacks vision and that there is a toxic work environment.”

New shopping

We’re keeping an eye on the development of autonomous stores as a possible accelerator of the switch in payment transaction from the POS to the shopper’s phone.

AiFi is a technology vendor with 100 stores operational worldwide including 50 Zabka Nano in Poland. AiFi solutions are also powering the Konzum Smart store, the first autonomous retail outlet in Croatia.

JUXTA, a US vendor, is commercialising portable autonomous stores which can be used at sports or music events. The company sees an opportunity to place them next to EV charging stations, so motorists can shop while waiting for their batteries to charge.

After closing one third of its outlets, Amazon has now resumed its autonomous store expansion in the US but is still tinkering with the 18 London shops. The goal is “alleviating some of the friction” associated with the supposedly frictionless Just Walk Out technology.

Amazon is already live with its palm payment product at Whole Foods in the US. Neil Saunders, a retail analyst, likes the integration of payments and loyalty – one scan does both. 

Some vendors are proposing facial recognition as an alternative to cards or Apple Pay. Payface, a Brazilian start-up which recently raised $2m, expects to have 2,000 stores live with its solution by the end of this year. The company just bought SmileGo, a competitor. But even facial recognition isn’t fool proof. Underaged delivery drivers in Brazil have been registering for work using photographs of their parents.


Stripe has announced a slew of new features in its optimised checkout suite including automatic selection of the best set of payment methods, “no code” A/B testing to evaluate how different payment methods perform and a new express checkout button. River Island, the UK fashion brand, said it saw a 3%-point increase in card authorisation rates with the new features.

Increasingly, these tools are becoming available to merchants independently of their processor relationship. Primer, a payment orchestrator, claims 5% authorisation uplift for merchants using its “Uplift AI” product to route payments to the optimal processor.

Primer’s product strategy makes sense. Orchestrators need to move beyond simply routing transactions if they want to generate significant revenues. Gr4vy, another orchestrator, has launched “vault as a service” in which it stores customers’ card details, billing and shipping details, linked to a vaulted card token. There’s no vendor lock-in which is very welcome. Merchants can export their data and move to another supplier.

Of course, anything “as a service” is only as good as the vendor supplying the product. Where the service is regulated, risk is heightened if the supplier’s processes are not up to scratch. UK based Modulr, a payment infrastructure provider that raised £83m in 2022, has been ordered by FCA to stop onboarding new customers. This is the latest intervention by European regulators. Railsr had its e-money licence revoked by Lithuanian authorities and Bafin, the German regulator, has restricted Solarisbank and PayOne from onboarding new customers.  

Worldine has announced it will start selling Castles Android terminals. The partnership is a blow to Ingenico which was spun out of Worldine last year. Ingenico has been slow to commercialise its Android proposition, leaving the door open for Castles. Switzerland is the first market. The Saturn terminal is available on Worldline for €699 with most card transactions at 1.7% with a proposition supporting local cards and meal vouchers.

One reason to upgrade to an Android terminal is for digital receipts. France outlawed the automatic issuance of paper receipts in August and the Belgian region of Wallonia has also banned retailers giving paper receipts unless shoppers specifically ask for one. There are no penalties for non-compliance, but the move gives the retail trade a welcome environmental nudge.


Although Visa and Mastercard have pushed SoftPOS as a micro-merchant proposition to accelerate cash displacement, the business opportunity for the payment industry lies in enterprise. SoftPOS can revolutionise big company operations by bringing together multiple services on a single device and liberating staff from the till point.

NewStore, the well funded German/American retail software vendor, has incorporated Apple’s “tap to pay” within its ePOS/clientelling app. The product will be used by AllSaints, the British fashion retailer, in 200 stores globally and allows staff to assist customers, create a basket and take money from one mobile device. Adyen is NewStore’s primary payment partner. You can see where SoftPOS fits in the retail technology landscape in NewStore’s glossy corporate video.

Another example is Polcard, Fiserv’s Polish affiliate, which has equipped 2,000 couriers working for GLS with Polcard Go, its SoftPOS application. Previously, the couriers could only accept cash or Blik.

Poland is fast developing into one of Europe’s leading SoftPOS markets. ING, which has 7,000 SoftPOS SME merchants has added Blik, the popular domestic mobile payment standard, as a payment option.

The Polish government has decided not to mandate the integration of payment terminals and ECR software. The new law had already been postponed to January 2025 but was withdrawn following industry pressure; vendors argued the protocol chosen was incompatible with SoftPOS.

Polskie ePłatności, owned by Nexi and the second largest Polish acquirer, has launched PePpay a SoftPOS product in partnership with Danish start-up Softpay.io. Nexi has also announced SoftPOS in Italy to be distributed in conjunction with Banco Intesa Sanpaolo. There is no monthly fee and transactions under €10 are free of charge under the Government imposed micropayments initiative.

Elsewhere Tebi, a high profile Dutch start-up founded by Adyen alumni, is building its emerging payment business around SoftPOS. This is a fascinating move and offers the opportunity to see what happens when POS technology leaps a generation. Pricing is 5 cents per transaction + 2 cents for debit or interchange + 0.4% for credit.

Open banking

Many in the industry have been worried about the commercial viability of the emerging open banking sector. These concerns were underlined by 2022 financial results from Yapily and Truelayer, two well-funded start-ups. Truelayer, which claims market leadership in UK, Ireland, Spain and France and “significant share” in Germany and Netherlands, generated just £4m of sales in 2022. Together, Truelayer and Yapily lost £83m on combined turnover of just £7m. More details on the Business of Payments blog.

Very sensibly, Truelayer is using some of its cash for lobbying to help create a market for itself and has called on the EU to combine open banking with instant payments. This could create a domestic payment option for the EU that will “act as an alternative to the card duopoly” and create customers for open banking players.

Investors hoping for a quick turnaround in the industry’s fortunes will be heartened by Stripe’s announcement that it will be using Truelayer to offer open banking payments as an option for its merchants in 22 markets. The volume generated should be considerable, but Stripe will have driven a hard bargain and Truelayer may not see much margin.

Undeterred, Swedish open banking start-up Brite Payments has raised $60m to expand into 25 countries. Unlike many of its competitors Brite, which receives funds and settles with merchants, claims to be profitable already.

To succeed, open banking needs “scheme” rules, a well-publicised brand and an acceptance that all actors in the value chain will need paying. In the free enterprise model, where there is no profit, there will be no products.

Two new product announcements move the UK market in the right direction. NatWest’s Payit now offers single use open banking pay-by-links. The bank claims to have processed 100,000 payments to the value of £5m. Small but a positive start. Paypoint, which offers consumers the ability to pay utility bills in high street shops, now accepts open banking payments for pre-pay gas and electricity. The service is provided by OB Connect, in which Paypoint invested £3m last year. 

Central Bank Digital Currencies

The European Central Bank is making good progress with the Digital Euro and it’s hard to argue with the ECB’s statement that “The growing trend towards digital payments has also entailed increased European dependency on foreign service providers. A digital euro would also address risks stemming from geopolitical tensions. [COVID and Russian war] has painfully demonstrated the risks of relying exclusively on external suppliers for basic needs.

The ECB is adamant that the digital euro is not “programmable money” and will safeguard “cash like levels of privacy”. There’s no rush. Central bankers now begin a two year “preparation phase” which involves finalising the rule book and selecting vendors for the platform and infrastructure.

Mastercard sense a business opportunity despite being one American vendors from which the ECB wants to reduce its dependence on. The network has launched its “CBDC Partner Programme featuring 7 vendors including Giesecke + Devrient, the German banknote printer.

In contrast, the digital dollar seems dead. It’s been killed by a combination of vested interests wanting to keep the current fabulously expensive US payment system going and conspiracy theorists convinced that digital currencies “undermine the American way of life.” Rich Turrin has a good summary of the evolving mess and Steve Forbes summarises the rather unhinged case against. 

Crypto corner

We’re witnessing the prolonged death throes of the crypto bubble. Binance, the largest exchange, had its credit cards terminated by Visa and by Mastercard. Paradoxically, we’ve also learned that crypto/fiat volumes have been quite low. Visa has processed just $3bn from cards issued by 75 crypto exchanges since 2021. This makes sense: if you like crypto, why would you spend it?

Stable coins, which are pegged to traditional currencies, are said to offer the efficiency benefits of crypto but without having to worry about criminals and speculators. Yet Paypal’s stable coin dollars have not been wildly successful. Less than $10,000 daily volume is reported but it’s early days. Dave Birch says that PayPal’s stable coin might be the killer app for P2P cross-border payments. Others argue that there are now two kinds of PayPal dollars and that the stable coins, backed 1:1 by US Treasuries, are much the safer choice and will prove most popular.

In other news

The Cashless Poland Foundation, a Government initiative to subsidise payment acceptance, has now supported over 600,000 payment terminals for small merchants including 5,000 SoftPOS.

The European Payment Initiative has chosen a brand. The new digital wallet facilitating account to account payment will be called “wero”, combining “we”, “euro” and “vero”. “The short and snappy sound resonates with the fast-paced nature of digital transactions,” said the CEO with a straight face. Wero will launch in Belgium, France and Germany by mid 2024 with the Netherlands next on this list.

Kristo Kaarmann, founder of Wise, discovered Singapore Airlines marking up an eDCC transaction by 5%. He wasn’t happy.

ASOS, the online fashion brand, has limited use of BNPL including Klarna and Clearpayto improve the behaviour of our least profitable customers.”

Adyen has issued over 2bn network tokens, boosting authorisation rates by an average 3% points.

PCI-PAL, a London listed supplier of secure payment products for contact centres, won a resounding victory in its longstanding patent battle with US rival, Sycurio.

It’s been a good month in the world of global payment reports with densely argued new research arriving from McKinsey and Cap Gemini. McKinsey calculates that global payments revenue grew 11% in 2022 with cash usage declining 4% points. The consultants say that India is now one of the world’s top 5 markets. Cap Gemini forecasts non-cash payment volume to grow 15% CAGR over the next five years, driven by the expansion of instant payment schemes. 

Fraudsters don’t always need crypto. Any Pilley, the colourful owner of CardSaver, a UK ISO, has been jailed for 13 years for mis-selling energy contracts to small businesses.

The metaverse didn’t last long. Banks are retreating from this short-lived hype cyclewith one vendor commenting “the urgency of these initiatives has been superseded by more pressing requirements.”

Where to find me?

I’ll be at the PSE Merchant Acquiring Conference in London on 5 December and then at MPE 2024 in Berlin on 12-14 March.

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