It’s been another busy month in payments. Gloomy forecasts were balanced with interesting new fundraises, continued investment in European payment sovereignty, strong growth (but little revenue) in Open Banking and pretty much every PSP launching merchant cash advance (MCA).
The Payments business
Are the good times over? The consultants certainly think so. BCG’s latest predictions for the payment industry make sobering reading as we reach a critical inflection point. The consultants see payments revenue growth in Europe decelerating from 10% to 5% over the next five years.
The analysts do highlight some bright spots. Europe still benefits from faster growing markets such as Poland and Czechia, from ever increasing use of contactless to replace cash and the resilience of high-margin, cross border transactions. Set against this, cash-to-digital conversion is pretty much complete in some mature markets while intense competition is driving down margins and profitability, notably for enterprise clients and for software-led distribution.
What should the industry do? It’s clear that today’s successful acquirers and PSPs are technology companies with the ability to ship new products at speed on modern platforms and/or deepen client relationships through vertical business management software. Neither is an easy transformation for legacy players with a heritage in banking.
And many of these are too busy sorting out their platforms to match the speed to market of Stripe and the other new players. Fiserv’s new CEO told investors: “We have 14 gateways, 13 don’t need to exist but they are hard to unwind. We have 24 Visa and Mastercard routers/switches. There should only be one. The challenge is shutting down half is easy; the other half takes time.” (quoted by Cleveland Research)
With market growth slowing, there is evidence that general valuations are shrinking too. BCG observes that “a payments company can now grow at 20% annually, post 50% EBITDA margins, and still trade at only 12 times forward EV/EBITDA.”
Paradoxically, it’s been a busy month for fundraising. Europeans with good payment ideas are still very investable, especially when they can add some AI-spin to their story.
- Manchester-based Ryft raised £20m to expand into continental Europe. Ryft competes with Mangopay and Lemonway as an independent PSP for complex merchants such as marketplaces.
- Cellpoint Digital, a payment orchestrator founded in 2007, has raised $34m to fund its new “AI decisioning platform,” taking its total capital raised to $144m. London-HQ’d Cellpoint’s 2024 accounts show revenues of $5.1m and an operating loss of $19m. Cellpoint specialises in hotels and airlines.
- Zeal, also based in London, claims to be “the world’s #1 VAS solution on payment terminals” and announced a $10m fundraising round although it refused to name the investors. Zeal offers card-linking loyalty apps on Ingenico, Verifone and Sunmi Terminals. This is a notoriously difficult sector within which to establish a viable business.Share
Returning to the established winners. Stripe has profited from its strong position with the fast-growing AI sector. Its developer-focused APIs, global coverage and metered billing capability make it very attractive to start-ups in the sector. However, once merchants get to a certain size, they are still likely to dual-source.
Adyen announced last month that OpenAI is now a customer while Anthropic, makers of Claude, has started building its own payment infrastructure. This seems entirely reasonable for a business with $45bn of sales. Anthropic has hired 544 people from the payment industry, 335 of them from Stripe.
Source: Rohit Doshi
Dwayne Gefferie has a good analysis of what it takes for PSPs to win AI merchants from Stripe. It won’t be easy but there are opportunities for those with strong coverage in certain geographies or expertise in fighting trial and multi-account abuse.
Adyen looks to have displaced Shift4 as Flatpay’s strategic payments infrastructure partner. Shift4 has powered Flatpay’s acquiring since its early days, but the new agreement gives Adyen responsibility for acquiring and financial infrastructure across existing and new markets. This includes instant settlement, cash advances, business accounts and card issuing. Neither company has said what happens to the existing Shift4 portfolio of over 100,000 SMB merchants in seven markets.
Checkout.com has become a serious competitor to Stripe and Adyen for enterprise digital merchants. Checkout is privately held offshore and doesn’t publish its accounts. This has sometimes led to confusion when people have tried to read too much into official filings from its UK business. This year, Checkout helpfully published a selective list of group KPIs which fall well short of audited financial statements but give some insight into its performance.
Total payment volume is forecast at $480bn for 2026, up 60% on the previous year. Revenue is running at $750m annualised although we don’t know what that calculation is based upon. And the business expects to make $150m “adjusted EBITDA” in 2026. We don’t know what the adjustments are. The numbers look great, but it would be nice to get some consistency.
If any player can match the Stipe, Adyen and Checkout for product development, it’s probably Revolut. The London-based bank is making strides in merchant services, piloting face-based payments in three London cafes. You tap “pay with smile” on the terminal which compares your face with the image captured when you opened your Revolut account. If it matches, the transaction goes through as “on us” at no cost to the merchant.
This isn’t yet a serious proposition but underlines the potential of Revolut linking its consumer and SME customers with new business models.
In the UK, Lloyds Cardnet – the bank’s JV with Fiserv – returned to growth in 2025 after a difficult few years. Volume was up 10% at £57bn. Read more on the Business of Payments blog
In other bank news, BPCE, the second largest banking group in France, has brought its payment businesses together in a single unit, called (wait for it…) BPCE Merchant Services. This includes Payplug, an omni-channel PSP that processed €11bn in 2025. BPCE is aiming to grow its market share from 25% to 30% by 2030. Banks that buy Fintechs often kill them so BPCE deserves praise for supporting and growing Payplug. Indeed, Antoine Grimaud – founder of Payplug – will oversee the enlarged business. In the video, a happy customer explains why her business uses Payplug.
In corporate news, Nayax, the Israeli unattended payment specialist listed on NASDAQ, has spent $350m buying IPS, which supplies “smart parking technology” around the world. In Europe, IPS is active in UK and Ireland. There’s more money in parking than you might think. IPS will generate $90m revenues this year. The sale price is 17x EBITDA.
NMI also has a strong position in parking and other unattended payments. It was a delight to make a presentation to its customers and partners while spending an afternoon cruising down the River Thames
MPE, 9-11 March 2027
It’s that time again, folks. Merchant Payments Ecosystem is open for bookings for next year’s conference. It’s the best event in Europe and you can get a 30% discount for buying your tickets early.
Payment sovereignty
In the UK, a consortium of banks is raising money to form a new company, called DeliveryCo, which will deliver “the next generation of retail payments infrastructure.” The press described the initiative as creating a British alternative to Visa and Mastercard but DeliveryCo is actually tasked with modernising the existing inter-bank payment system. Mike Chambers explains how it will work.
A cynic would say that the new business will most likely start (and possibly finish) by buying Vocalink – the organisation that runs Faster Payments, BACS and CHAPS – from Mastercard, which is known to be looking to exit its £700m acquisition.
On the continent, work continues with wero, a wallet that sits on top of SEPA Instant Payments, and the digital euro. Wero will be available in France, Germany, Austria and the Benelux. In the rest of Europe, the national champions have recognised the need for cross-border interoperability and have formed a new organisation called the European Network for Payments to make this a reality. ENP (or ENfP, nobody knows yet) is based in Madrid and brings wero together with Bizum (Spain), SIBS (Portugal) and Bancomat (Italy). Blik, the Polish mobile standard, has its own international ambitions and remains outside for the moment.
The ECB is moving forward with the digital euro and looking for pilot merchants. If your customers include staff working for the ECB or national central banks (maybe you run the staff restaurant or the gym next door), just sign this 12-page end-user agreement and speak to one of the 36 PSPs selected for the pilot.
#Werowatch
EPI, parent company of wero, expects 2,000 merchants to be live by the end of October. We’re seeing a regular stream of announcements of some of Europe’s largest brands adding wero to their checkout pages, including Fnac Darty in France and dm drug stores in Germany.
One German retailer described his experience with wero on LinkedIn, saying the integration took about one day of coding and they were now receiving a steady flow of orders using wero.
One proven way to get people to try a new payment method is to bribe them. Wero ran a remarkable promotion in Germany, offering €15 to anyone making their first two transactions (or P2P payment of just 1 cent) with wero. Unsurprisingly, this proved very popular with one user posting: “€15 for 10 seconds of work and a 2-cent transfer to friends (1 cent each is enough).
Dutch retailers are not so happy. Wero will replace iDEAL, a very popular and cheap payment method for online purchases in the Netherlands. Wero includes more features, such as consumer protection, and many merchants will pay more.
Wero hasn’t been cheap to build. According to Finanz-Szene, the EPI has already received €754m investment from participating banks and issued a further €85m in shares in July. This coincided with the extension of wero to Austria with Erste Bank, Raiffeisen Bank International and three Raiffeisen Landesbanken joining EPI.
Despite the flurry of positive stories, we don’t have any concrete news about the number of wero transactions. For sovereignty and resilience, this may not much matter. Once wero is widely accepted, it becomes a viable alternative to international cards if or when needed.
Agentic Commerce
Agentic commerce is moving so fast that it’s hard for anyone to keep up.
So far, there seems little enthusiasm from consumers to trust AI to spend their money although trust in agents’ product recommendations seems to be growing. For the moment, we still need a “confirm” button pressed by a human although this could change quickly with the launch of the latest AI personal assistants.
Meta has released Muse while the cool kids in the Valley are raving about Instinct. Both personal assistants use Stripe’s Link product to make payments. See how it works.Link asks consumers to validate transactions, so this isn’t pure agentic commerce. But it’s really easy and is likely to grow rapidly into 2027.
These assistants are expensive to provide so it’s no surprise that Meta says it would like to monetise the service by charging merchants a fee. The problem is that any attempt to limit Muse to only shop at participating merchants would compromise its independence and make Muse less interesting to shoppers.
It’s likely that agents will use cards rather than anything more novel (although GoCardless has demonstrated an agentic A2A payment) but there are a number of outstanding questions. Notably, who is liable in the event of an agent making a mistake. Clue: it’s not Stripe. The latest terms and conditions make this very clear.
Embedded payments and finance
Europe lags behind the US in adopting embedded payments – a software vendor including payment processing in a tightly integrated bundle with its core product. Flagship Consulting estimates 20-40% of European payments are software-led, compared to over 60% in North America. One reason for the slower adoption in Europe is the fragmented nature of our software industry; ISVs are often too small to absorb the capital cost of setting up a payment business. This may leave the door open to well-funded American giants to dominate Europe in the next few years.
Certainly, it’s the large PSPs that are making most progress in this sector. Stripe and Adyen dominate the embedded payments market in Europe according to new research from APIdeck.
Beyond payments, ISVs are increasingly interested in offering loans to their merchants and are widely distributing merchant cash advance (MCA) products. This month Dojo announced it had passed £2bn total capital advanced by YouLend and was adding Liberis as a second supplier. The first billion took four years; the second less than two. In the video, a happy shopkeeper explains how he’s taken eight loans from Dojo/YouLend.
Stripe uses YouLend in Europe but has just bought Parafin, a US embedded finance vendor which has lent $3bn to over 60,000 small businesses. I would expect Stripe to bring this capability to Europe.
William Jalloul, founder of Flowpay, an MCA vendor based in Prague, has given an interview to Sifted. Flowpay will launch in Germany and the UK but struggles with VCs back home. “We always raise 10x less than companies in western Europe,” he says. “If you compare us with the US, it’s 20x less on average. That’s pretty hard starting out.”
Tipping
One consequence of the explosion of American POS software in Europe is the export of its aggressive tipping culture to countries with very different habits. In Belgium, Adyen says 39% of people now leave a tip when prompted. This would have been unthinkable a few years ago.
What could go wrong? Shake Shack got into trouble after sharp-eyed customers revealed that self-service ordering kiosks raised prices for people that didn’t leave a tip. You might ask why a self-service kiosk needs tipping. This is America. Even robots won’t work without a cash incentive.
Fraud
The schemes are busy bulking their anti-fraud capabilities. Visa has bought BioCatch, which provides behavioural biometrics for $2.4bn. BioCatch analyses how you swipe and hold your phone to decide if you are really you. This feels slightly creepy but gives merchants fraud detection before shoppers have even hit the “buy” button.
This summer’s World Cup has taught Americans a lesson in cross-border commerce. Many legitimate transactions were blocked by systems set up to refuse the last minute, high-value purchases with unusual behavioural patterns typical of football supporters.
VAMP, the new Visa fraud-reduction programme, is beginning to bite. One US retailer has been hit with an $8 surcharge for each dispute raised until they reduce fraud and chargeback ratios.
In legal news, Nuvei has paid $4.9m to settle an FTC lawsuit alleging that it processed payments for merchants engaged in scams. One customer “was impersonating Microsoft with fake virus alerts and luring consumers to offshore call centers under the guise of offering remote tech support services.” This underlines, yet again, the importance of knowing what your merchants are doing.
Can love blossom when he’s all anxious about …. Card fraud? Watch this new “mini drama” from Mastercard in Korea.
Open banking
Despite the adoption of open banking earlier this year by high-profile eCommerce merchants such as eBay and Amazon, UK transaction growth hasn’t accelerated. It’s stuck at c.30%. There’s a long way to go before A2A will be challenging debit cards.
What’s holding back open banking? The industry has acknowledged the need for a business model and for consumer protection. That’s why banks and PSPs have founded the UK Payments Initiative with the aim of helping commercial variable recurring payments replace direct debits. This could be a tough ask. Direct debits are reliable, cheap and with remarkably high levels of customer satisfaction.
For open banking or any A2A payment method to succeed, we also need a relentless focus on customer experience – including transaction speed. Betclic Group, a French gaming business, targets 10 seconds from customer clicking to add to their account and the money arriving. Apple Pay can do 5 seconds. Bank transfers, often involving the user clicking through successive screens in a mobile banking app, can be much slower. Cards may be more expensive but higher conversion rates could make the cost still worthwhile.
In vendor news, TrueLayer, which claims to be Europe’s largest open banking player, reported operating losses of £36m on sales of just £28m in 2025, despite payment volume up 52% at £65bn. TrueLayer is a great business, but this brings further confirmation that there’s little money in A2A payments. Read more on the Business of Payments blog.
Truelayer sells direct to merchants. This is expensive. In contrast, Yapily, an open banking vendor which has followed a low-cost business model of indirect sales via Fintech’s reported its first year of profitability. Yapily may never be a unicorn but it’s now a viable business and that deserves congratulations.
In Sweden, Trustly raised a further $40m to “turn payments into intelligence that helps businesses win new customers.” Trustly says the cash will accelerate its AI-powered growth strategy, but the timing (and 200 layoffs) suggests the money will also provide some welcome balance-sheet support.
Trustly’s underlying economics show the pressure the sector is under. Q2 payment volume rose 26% but revenue increased just 6%, gross profit fell 13% and adjusted EBITDA halved. Trustly has been consistently one of the best performing A2A vendors in Europe but it’s a tough sector in which to make money.
In a rare legal victory for PSPs, a Madrid court found against ING Bank for misusing open banking APIs. The bank had accepted transactions and then later rejected them for insufficient funds. Which is the anonymous PSP that continued the case to conclusion over five years? My money is on Lyra, whose CEO published a blog complaining about ING’s APIs back in 2022.
Crypto corner
Stablecoins have dominated industry conferences for several years yet there’s little sign yet of mass-market adoption by merchants. Christoper Uriarte from Glenbrook attended Checkout’s client conference and reported that “everyone is talking about stablecoins but don’t always know what to do with them.”
I questioned the consumer need for stablecoins in a LinkedIn post. Cue a lively debate and 85.000 impressions. I was backed up by a new study by the Bank of Italy which shows that stablecoins are no cheaper for moving money than traditional channels.
Stablecoins need to overcome the reputational damage of their association with crypto. And it’s true that Tether (known as USDT) remains the coin of choice for criminals, terrorists and fraudsters. According to a US Senate report, Tether “became a primary cryptocurrency for Iran, Hamas, Hizballah, and the Houthis beginning in 2023 and has expanded in scale since.” The reasons are obvious. As Jason Mikula explains “the ability to create near limitless, anonymous wallets and to move funds effectively instantaneously and irreversibly have made crypto a favoured financial mechanism for bad actors
This is one of the problems OpenUSD hopes to solve. This is a fee-free stablecoin issued by a consortium of well-known names including Stripe, Visa and Mastercard who, we hope, would build AML and KYC into their product from day one. Simon Taylor is very excited.
In other news
A legal definition written in 2009 could accidentally dismantle Europe’s gift-card market. A major lobbying effort is underway to stop merchants being obliged to become EMIs to accept pre-paid Visa or Mastercards. Expect a solution involving changing scheme rules.
Flatpay has released a fun new commercial. It features Kevin Magnusson, a Danish racing driver who holds the Formula One record for the most career starts without leading a lap.
Prosus, the South African eCommerce conglomerate and owner of PayU, has published a detailed review of the use of AI agents by its operating companies. It makes fascinating reading.
Despite its leadership in many fields of technology, the US still uses magnetic stripes on cards issued to benefit claimants. Romanian gangs have noticed and have stolen millions of dollars from poor people.
A LinkedIn influencer asks why Mollie’s CEO never posts. Mollie’s founder (who does post quite a lot on LinkedIn) says his CEO doesn’t have time.
In a bizarre “pro-growth” measure, the UK scrapped the £100 legal limit for contactless transactions. No issuers have taken advantage of this largely pointless freedom.
Russian aggression hit a new low when a drone hit an Ingenico warehouse in Ukraine. Fortunately, nobody was hurt but just look at those terminals.
And finally
For those following developments in the English Premier League….
Spotted on LinkedIn via James Hill
My investments
I’ve made small investments in three exciting payment start-ups. I’ve included these for full disclosure but let me know if you’d like an introduction.
· 1-CP – based in Frankfurt, 1-CP is the “Corporate PayPal” that brings B2B functions into merchants’ B2C checkouts.
· Equali – reconciliation and accounting automation for payments
· Inqyre – AI orchestration for merchant onboarding in payments
Where to find me
I’ll be at Open Banking Expo, London, 13 October; EPSM, Athens, 22 October; Mastercard Acquirer Innovation Forum, London, 3 December; MPE, Berlin, 9-11 March 2027; and Merchant Transact, London, 12 April 2027.
Get in touch
If you’re looking for a board advisor, non-executive director or speaker/moderator at a company event or conference, get in touch.
Book an online meeting or reach me the old-fashioned way: geoff@barracloughandco.com, +44 7808 142102.
