The Payments Business
There’s been no shortage of commentary about what’s gone wrong at PayPal. Volume growth has stalled, the CEO has been fired and the stock price collapsed following the Q4 results. A weak performance in Germany, where PayPal is the leading eCommerce payment brand, is particularly bad news. Germans normally fund PayPal from a bank transfer not a credit card. This makes Germany a very profitable market for PayPal. The CFO explained: “Our German growth has moderated due to macroeconomic softness, normalization of our long-standing market leadership position and competition from alternative payment methods.”
Worldline’s new CEO indicated he was open to selling further assets. The struggling Paris-based processor will now focus on its European core businesses. The JV with ANZ Bank in Australia would likely be high on the list for sale. He ruled out a merger with Nexi saying “I don’t see for Worldline any priority for further complementary mergers.”
Global Payments completed its acquisition of Worldpay which creates the world’s largest merchant acquirer. The combined business will process a whopping $3.7 trillion from 6m merchant locations. I’m told this is very much a takeover. Global Payments executives are in charge and the Worldpay name will likely disappear.
PagoNxt, Santander’s payment business which operates in Spain, Portugal and Latin America, is now consistently profitable, generating a record €97m operating income in Q4 2025. Payment volume was up 8.5% to €64bn.
PayPoint plc has published its Q3 update including poor results from its UK ISO business. Net revenue fell 3% and volume was down 7%. Management blames “lower than anticipated consumer spending patterns” but “stronger than anticipated competition for SME merchants” might be more accurate.
MPE 2026
If you only make one payments conference this year, make it MPE 2026 in Berlin 17-19 March. I’ve been involved since 2015 and always learn something new. MPE attracts a strong mix of vendors, advisers and merchants and it’s friendlier than most, making it a great place to meet new people in the industry.
This year, I’ll be moderating a panel discussion on payment infrastructure – build vs buy – and hosting a roundtable on software/payment convergence.
Farewell Lyf Pay. The French QR code mobile payment/loyalty wallet looked beautiful but despite blue chip backers including BNP Paribas, Crédit Mutuel, Groupe Casino and Auchan Retail, Lyf Pay never gained much traction and burned through at least €180m. Conclusion: it’s easy to build a wonderful new payment product but much harder to get people to use it.
In corporate news, Corpay is selling PaybyPhone to Lightyear Capital for an undisclosed sum just two years after buying the business from Volkswagen for c.$300m. Paybyphone, a pay-for-parking service operating in UK, France, Switzerland, Germany and North America generates c.$100m annual revenues but its consumer-proposition was looking increasingly peripheral to Corpay’s B2B focus.
Euronet has bought the merchant acquiring business of CrediaBank, the fifth largest bank in Greece. Terms were not disclosed. The sale also includes 20,000 merchants, 2,500 ATMs, issuer processing and a long-term distribution agreement for merchant services through the bank’s branch network. This looks like a very good deal for Euronet. There are clear synergies in merging Credia Bank’s portfolio with ePay, Euronet’s existing Greek business which was based on the acquisition of 200,000 merchants from Piraeus Bank in 2022.
Guavapay latest. The failed London fintech is now in liquidation with an official receiver appointed to salvage what they can for the creditors. Mastercard is owed £17m but my sympathies are with the staff who weren’t paid for September or October. Guavapay’s founder resigned citing “fatigue and health related reasons” but the London-based management has many questions to answer about this mess. To her credit, Laura McCracken – former Chair and then CEO – has answered some of them in response to my post on LinkedIn
In fundraising news, APEXX Global, the London-based payment orchestrator, has raised an additional $10m. APEXX has been winning travel clients recently including et2, Iglu.com and Norse Atlantic. The company’s most recent results show revenue rising 21% in 2024 to £5.7m with an operating loss of £6.9m. Merchants will be interested to note that 38% of sales come from commission payments from acquirers.
Mews, Czech by origin but based in Amsterdam, has raised $300m to support its hotel software suite. Mews processes $20bn annually from 15,000 merchants and the business case is very much payment-powered. In 2024, Mews made 75% of its €209m revenue from transaction-related sales, mostly from commissions on payment processing. Mews is a payment facilitator – handling onboarding and risk – but transactions end up with Adyen and Stripe as acquirers.
Klearly, an Amsterdam-based restaurant payments vendor selling through partnerships with ISVs, has raised an additional €12m. Klearly has a stellar line of up backers including PayPal, and the new money will help fund expansion to Italy.
Payment sovereignty
There is growing political momentum behind the need for European payment sovereignty. As Aurore Lalucq, French MEP and Chair of the European Parliament’s Economic and Monetary Affairs Committee put it: “almost all of our payment systems are now American. Donald Trump can cut them off overnight.”
This has put added pressure on both Wero (a mobile wallet linked to SEPA instant payments) and the digital euro as strategic programmes that will help reduce dependence on Visa, Mastercard and PayPal. The UK evidently doesn’t share these fears and has extended its contract with Mastercard to run Faster Payments, the domestic inter-bank payment network.
Werowatch
Wero, commercialised by the European Payment Initiative (EPI), is certainly making good progress. The helpful werotracker website shows 50 banks in France, Belgium and Germany now supporting live transactions. New banks and PSP announcements are coming thick and fast, most recently Deutsche Bank, Postbank and Mollie. And iDEAL, the ubiquitous Dutch online payment scheme, is already rebranding as wero as you can see in this glossy commercial.
How much has wero cost so far? The FZ blog estimates that EPI’s (a consortium of European banks plus Nexi and Worldline) have put up €670m of capital. EPI made an operating loss of €55m in 2024 and wrote down a further €41m, thought to be related to its investment in Payconiq. There is plenty of money left in the bank.
Wero has signed an agreement with four national schemes – Bancomat (Italy), Bizum (Spain), MB Way (Portugal) and Vipps (Nordics) – to accelerate inter-operability. If successful, this could give Europe a credible cross-border merchant payment capability for the first time. Plans are moving quickly. Co-operation will be based on the creation of an “interoperability hub” operated by a new entity established by this summer. P2P payments are schedule to be available by Christmas with merchant payments coming in 2027.
The digital euro is currently stuck in political ping-pong between the European Parliament and Council. Centre-right and centre-left MEPs can’t agree whether it should only work offline or whether there should be online functionality too. The European Central Bank is planning to pilot the digital euro in 2027 with a full launch in 2029. The ECB estimates it will cost €1.3bn to develop the new currency and will incur c.€320m in annual running costs. The first of its expected 100 staff are being recruited now.
Scheming
Combined Mastercard and Visa volume in Europe (measured in euros not in depreciating dollars) is growing at c.8% compared with a consistent low-teens rate over the last three years.
The slowdown is clear but why? Here’s what Business of Payments readers think.
After the UK left the EU, the card schemes took back control of Interchange paid by British merchants on eCommerce transactions to EU cardholders and increased it from 0.3% to 1.50%. This is now costing British merchants an extra £150-£200m annually. The regulator wants to reintroduce an Interchange cap and just won a court case brought by Mastercard, Visa and Revolut who were trying to keep Interchange high.
Across Europe, the newer, mobile-centric local schemes are certainly performing well as shown by Marcin Mazurek in this report. Poland’s Blik, in which Mastercard has invested, is the star.
Ireland has been lacking a domestic mobile payment scheme but now welcomes Zippay. Built byNexi and based on Pago Bancomat, Zippy will go live on St Patrick’s Day, 17 March. The local banks supporting Zippay hope it can help them fight off Revolut which is particularly strong in Ireland.
Flagship Consulting look at the opportunities for local schemes and alternative payment methods to make POS payments through the newly opened Apple NFC chip. PayPal is doing this in Germany, Blik in Poland and Vipps in Norway. Conclusion: the difficulty of breaking ingrained user habits means access to iOS NFC isn’t the game changer many had hoped. It’s really hard to get people to change the default wallet on their phone.
Payment/software convergence
Payments and software are now inextricably linked. Evidence of the shift is mounting. Tidemark’s 2025 Vertical and SMB SaaS Benchmark Report finds that 87% of vertical software-as-a-service (SaaS) vendors now offer payments, up from previous years, with 31% forcing merchants to take their preferred processor. The median attachment rate has jumped from 23% to 40%.
Software vendors are continually surprised by the benefits of providing integrated payments. One said “we thought we were building a company to help make sports happen in communities… and what we’ve built is a vertical SaaS payments-enabled platform – turns out that’s a good way to scale.”
Lightspeed, the Canadian restaurant software vendor moved quickly to incorporate payments in its standard product. Lightspeed Pay (Adyen behind the scenes) offers integrated payments to customers in UK, France and Germany. Total European revenue (software plus payments) was up 21% in Q4 following the recruitment of 150 sales reps “going city by city.” Lightspeed targets the more complex restaurants and says it consistently makes 40bps net revenue from payment processing.
One reason that Adyen wins software distribution partnerships is the depth of its financial services proposition. Fresha, an ISV serving salons and spas, has chosen Adyen to provide embedded lending to its 140,000 customers worldwide, including UK, Netherlands, Finland and Sweden. This is merchant cash advance. Repayments are taken from the daily card settlement.
There could be trouble ahead. Investors have started worrying that AI will kill the market for vertical software such as retail and restaurant point of sale. Why would merchants rent expensive packaged software from an ISV when AI can write them customised code that does exactly what they need?
A collapse in packaged vertical software would close off this distribution channel for payments. What would replace ISVs? Maybe there’s space for an AI friendly marketplace of payment integrations.
New shopping
Amazon has confused just about everyone by closing its Amazon Go and Amazon Fresh stores while opening a new, large format supermarket in Chicago. Although Amazon’s autonomous convenience stores failed to make money, this is thought to be more about its lack of retailing skills than a fundamental flaw in the technology. European retailers, notably Żabka Nanos in Poland and Lekkerland in Germany, seem more enthusiastic about cashier-free shopping. Retail Optimiser has good summary of the current position and vendor landscape.
Most people think that new shopping is about speed. Maybe’s it’s the opposite. A Dutch supermarket is having success with “chat lanes” at which shoppers are encouraged to slow down and talk with staff and each other.
Amazon has also given up on palm payments in “response to limited customer adoption.”This isn’t suprising. There are a few use cases for biometric payments – saunas, swimming pools etc – but only where people don’t have their phones with them. Palm payments will never be a mass-market thing.
Agentic Commerce
Agentic commerce is moving faster than a monthly newsletter can cover. The pace of adoption of this new technology has been stunning.
Nick Lansley, formerly Tesco’s innovation chief, has a video showing how he uses Perplexity to shop on the store’s Irish website. The site’s structure, optimised for the visually impaired, is great for AI agents too.
Before Christmas, the industry was focused on agentic commerce protocol (ACP) as the standard to manage agent-initiated payments. In the New Year, focus turned to universal commerce protocol (UCP) which Google has included in the latest Chrome release. Some think UCP could be a game-changer for banks and PSPs as it would allow them to understand and monetise shopper intent for the first time. Nekuda explains the UCP/ACP standards war.
Merchants are faced with some difficult questions. Agentic commerce could drive profitable new business as Adobe shows in its very helpful quarterly AI traffic report. AI initiated shopping converts at higher rates and delivers 30% larger basket size.
But in agentic commerce, retailers no longer compete on who has the best brand and website; they compete on who is most legible, trusted, and valuable to AI agents. This requires them to expose their product catalogue, pricing file and promotions logic which could mean giving away all competitive differentiation and advantage.
This is why Amazon won’t allow agents to access its data. Nor will eBay, which has updated its user agreement to ban “buy-for-me agents, LLM-driven bots, or any end-to-end flow that attempts to place orders without human review”.
The AI companies and their platform partners understand the value they bring and smaller merchants may not be allowed a choice. For example, Shopify has begun asking 4% extra commission on sales made via OpenAI powered checkouts. It’s not yet clear how this would be shared between Shopify and OpenAI.
Product round-up
Stripe has won payments processing at Currys, a British electrical chain with 300 stores, marking its first major omni-channel retail client in Europe. Freedom Pay is providing terminals and transaction routing. The Stripe/Freedom Pay partnership could be the first credible challenger to Adyen’s multi-market omni-channel dominance in Europe.
In other contract news, Shift4 has won contactless payments for inter-city buses in Greece.
If you pay for a taxi in Stockholm with an Airplus corporate credit card, the digital receipt is automatically sent to your phone and your company’s accounting system.Tab is behind the scenes.
Polcard (Fiserv’s Polish unit) has equipped 400 reverse vending machines. Tap your card and get instant payment for recycling.
Age verification is always a challenge for self-checkout. Voltox, a Swiss-German start-up, has a slick integration with Android terminals that proves you are old enough to buy alcohol. Here you can see it working on a Castles device.
Worldpay has launched a product that allows merchants to show the carbon footprint of a shopping basket at checkout and prompt the shopper to pay a carbon offset. Ekko, a London-based start-up is behind the scenes. This would have been very exciting in 2022 but probably less in tune with consumer trends in 2026.
Card-linked loyalty
The European landscape is littered with failed card-linked loyalty vendors such as Bink (UK) and Izicap (France). It’s a business model that promises easy collaboration between merchants and potential customers but has proven almost impossible to make money from.
London-based Krowd may be the first card-linking vendor to reach a sustainable business model. Krowd, which came through the Techstars accelerator, has a restaurant-focused loyalty proposition and powers rewards platforms for American Express and Revolut. Krowd uses the payment account reference (PAR) as the unique identifier that recognises consumers across channels.
SoftPOS
SoftPOS is the technology that allows any Android or iOS device to take card payments. Originally conceived as a way of enabling a long tail of micro-merchants, SoftPOS is proving more exciting for large enterprises. Here are two examples:
- Viva has secured a good win with a SoftPOS deployment at Decathlon, the French sporting-goods retailer, including acceptance of Carte Bancaire. Orisha Commerce supplies the in-store POS software.
- Worldline is supplying SoftPOS to Poland’s intercity rail network. The train guards will no longer need to carry a separate payment terminal and can take payments on their existing Zebra handheld computers instead. 1,367 integrated devices are already in use, making 315,000 transactions in the first month of operation.
California-HQ’d Magic Cube, a SoftPOS vendor, has raised $10m for its continued expansion. Verifone is one of the investors. Magic Cube powers Dojo’s SoftPOS product which is claimed to be one of Europe’s largest SoftPOS implementations.
Open banking
UK residents typically make 2.3bn card transactions and 400m direct debits each month. In December 2025, they made just 35m open banking payments. Open banking has a long way to go.
Industry players are pinning their hopes on commercial variable recurring payments(cVRPs) which could replace card-on-file and direct debits. If they did, this would deliver significant volumes. But today, banks cannot charge for open banking payments and so have no incentive to promote them. UK Finance, a trade body, has published its proposals for a pricing structure which, it says, should be ad valorem and include consumer protection.
The report is careful not to recommend an actual number. That would be a red flag for the competition authorities. But reading between the lines, here’s my take:
It appears that the industry wants the regulator to land on a fee of around 20bps for cVRPs. This would be cheaper than debit which has a base cost of c.30 bps including scheme fees. I’d also expect a cap of £1 or £2 per transaction and the ability for large merchants to negotiate bilateral deals with banks. The question now passes to a series of backroom discussion between the UK’s overly complex landscape of regulators and industry bodies.
Despite the bumpy road, UK open banking still seems to be leading Europe. Finanz-szene reports that usage in Germany is declining from an already low base. The blame is put on retail banks jealously guarding their API interfaces.
Finally, while not strictly open banking, keep an eye on Revolut in 2026. The fast-growing neobank is rolling out Revolut Pay. The experience falls short of Apple Pay – shoppers must scan a QR code on the merchant checkout page – but Revolut’s loyal fan base will love the chance to spend and earn Revolut Points. Booking.com is the latest merchant to accept Revolut Pay.
Crypto corner
There’s no indication yet of stablecoins becoming mainstream for merchant payments, either for consumers to make eCommerce purchases or for merchants to be settled transactions.
Visa, which has invested heavily in stablecoin acceptance and settlement, sees applications for treasury management in developing markets but “we don’t see a lot of product market fit in developed digital payment markets like the United States or like the U.K. or Europe for stablecoin payments.” This is backed up by news that Shopify has processed just $600K in USDC (the leading stable coin) since launching in June 2025.
Similarly, total spend on all Visa branded crypto cards looks to be growing quickly but amounted to just $673m in 2025 according to Dune.
Stablecoin advocates throw out some very big numbers but it’s worth remembering that most of the activity supports trading in and out of crypto currencies. Jeremy Light calculates that just 7% of reported stablecoin volume is used to facilitate transactions. In December 2025, there were 376m transactions at an ATV of $751.
Crypto – stable and unstable – can’t shake off its association with crime, money laundering and tax evasion.
A crypto-exchange based in Caracas called Kontigo has been helping locals evade sanctions. I know. You’re shocked such as thing could happen. You’ll be more shocked at the US fintech establishment folks – Y Combinator, JP Morgan and Stripe – who were up to their eyeballs in this mess. Great reporting from Jason Mikula and Fintech Business Weekly.
Meanwhile, in Australia, a 77 year old widow fed $AUD 433.000 into a crypto ATM as part of a romance scam.
In other news
Sweden is mandating that all payment terminals selling food, medicines or fuel must work in offline mode. This is sensible move to promote economic resilience which other countries will likely follow.
President Trump has scrapped the one-cent coin while Democrats are attempting to block plans to put Trump’s face on a dollar coin.
The Atlanta Fed tries to understand why American businesses still write cheques.
SCA has been very effective. The latest research from the ECB shows card payment fraud in the EEA remaining steady at c.3bps.
Trump’s move to downgrade marijuana to a Class 3 controlled substance is not likely to be sufficient to reverse Visa and Mastercard’s ban on processing payments from people buying weed, even where it is legally sold. Expect vendors to continue mis-classifying drug purchases as cash withdrawals.
The Polish Police collected €73m in fines during 2025 with card terminals provided by eService (Global Payments).
Checkout.com has written a song to celebrate winning Spotify’s processing businessand it’s not anything like as bad as you’d expect. Don’t let the party end/when it comes to the payments we got you/make them smooth for you/working round the clock/keeping things moving.
And finally
In Poland, the authorities have refused to allow a baby to be named Blik. Its parents wanted to name their child after a King Blikosław, a character created by the wildly successful mobile payment scheme.
Where to find me
I’ll be in Berlin 17-19 March for MPE and in London 26 March for Pay360.
