The Business of Payments

Opportunities

Before we discuss this month’s news from the payment business, I’ve been approached by two trade buyers looking to make acquisitions in the UK and Europe. Get in touch if you’re looking to sell either:

• Payment gateway, ISO or small merchant acquirer with >€200m monthly volume up to €50m valuation; or
• Retail or restaurant POS software of any size

For a confidential introductory conversation, drop me an email: geoff@barracloughandco.com

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The Payment Business

Life only gets worse for Worldline. A coordinated investigation by several European newspapers accused the French group of dodging regulatory scrutiny by shifting high-risk merchants out of PayOne, its joint venture with Germany’s savings banks. These merchants were allegedly moved to Worldline affiliates in Belgium, then Sweden.

Der Speigel has the details (in English) including pornography, dating sites, and murky subscription services – often tied to individuals later jailed. A former Worldline employee, quoted in the so-called “dirty payments” exposé, recalled: “We handled transactions without even knowing where the money came from. We were just waiting for the Financial Supervisory Authority to show up.” Almost on cue, Brussels prosecutors have launched a money laundering investigation.

Although news to the general public, much of the story was already known within the industry. In 2023, Worldline’s CEO admitted the company had “terminated in an orderly manner some specific merchants’ relationships whose associated costs and potential risks did not match our revised requirements.” The company took a €1.15bn write-down on its PayOne stake and forecast a €130m annual revenue hit from exiting these clients.

I have some sympathy for Worldline’s leadership, who inherited the mess via its 2020 acquisition of Ingenico which had taken control of PayOne the previous year. Blame lies with Ingenico’s management for failing to vet the customer portfolio and with PayOne for not questioning why some merchants were happy to pay 10% transaction fees.

But Worldline deserves criticism for not being more transparent about its actions leading up to the moment it terminated the merchant portfolio in 2023/24. It’s always the cover-up that gets you.

In a stroke of luck, Worldline raised €550m in a new bond issue at 5.5% just a day before the “dirty payments” story broke. Good timing for the company; less so for bondholders who are already nursing losses. Shareholders are suffering too. The stock dropped 30% on the latest revelations, slashing Worldline’s market cap to just €868m, a bargain-basement price for for a business handling €500bn annually in merchant payments. The major shareholders, SIX and Crédit Agricole, may be eyeing a take-private deal.

Figure 1 Chart from Reuters

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Paddle is another business in trouble for not keeping a close eye on its customers. The merchant of record (MoR) vendor has agreed to pay a $5m fine to the US Federal Trade Commission for not stopping scammers selling fake tech-support services to elderly Americans. Unlike Worldline, Paddle didn’t process the payments itelf, but the London-based unicorn did sell the software used, highlighting the importance of ongoing sub-merchant monitoring. The FTC’s response may seem harsh, but US regulation is a reality nobody can ignore.

Turning to financial news, Amsterdam-based Mollie reported a 30% rise in gross profit to €115m in 2024, from 250,000 merchants across Benelux and Germany. Following significant cost-cutting in 2023, operating expenses stayed flat, enabling Mollie to post its first positive EBITDA since 2018. The company previously raised a remarkable $800m in 2021.

PayPoint reported weak results from its ISO business, likely the UK’s largest. For the six months to March 2025, payment volume fell 10% to £3.3bn. While PayPoint blamed soft consumer spending, rising competition from Dojo and others seems a bigger factor. Acquiring revenue, mainly commissions from payments processed by EVO Payments and Lloyds Cardnet, dropped 19% to £9.8m.

Haris Karonis founded founder of Viva.com has won his legal case in London against JP Morgan. The litigation relates to the American bank’s $800m investment in 2022 for a minority share of WRL, Viva’s holding company. Karonis, whose motto is “it’s hard to beat someone who never quits” wrote on LinkedIn “The bank’s ongoing lawfare is counterproductive, unnecessary, and has failed. It now remains for WRL to exercise its remaining call option to take full control of Viva.com and for JPM to exit.”

In a busy month for bank partnership news, Allied Irish Banks has sold its 49% stake in AIB Merchant Services to Fiserv, its joint-venture partner. While the price wasn’t disclosed, Dublin analysts suggest an enterprise value of around €300m, roughly 4x operating profit. It’s a modest outcome, but typical for minority stakes.

The deal suits both sides: AIB releases some regulatory capital while Fiserv gains full control, boosting its European eCommerce ambitions and adding a UK ISO channel for Clover. The acquisition will lift earnings immediately, though synergies are limited: AIBMS already relied on Fiserv for most technology and payment processing.

Santander UK has dropped Elavon as its merchant services partner, opting for a referral deal with Worldpay instead. Elavon won’t be too disappointed as lead flows from the bank are thought to be rather modest, but the move is a clear endorsement of Worldpay’s offering, which likely beat Fiserv and Global Payments in a competitive process. The deal also confirms that Santander no longer intends to bring Getnet, its in-house merchant services offer, to the UK.

In corporate news, Paris-based Lemonway, a specialist in marketplace payments, has acquired PayGreen, a French eco-focused eCommerce payment gateway. Lemoway processed €10bn in 2024 and this move expands its addressable market to include direct-to-consumer online retail. PayGreen, which serves 1,500 customers, had been struggling financially and downsized its staff from 41 to 15. Lemonway believes it has hired “a resilient team,” noting, “When you’re short of money, you become smart.”

Ryvyl, a San Diego based crypto-centered processor, has sold its small EU acquiring/issuing business HQ’d in Sofia for $15m. Ryvyl EU, formerly known as TIB Credit and then Transact Europe generated $6.3m net income in 2024 from $38m revenue on $3.7bn processing volume. The purchaser is a mysterious UK blank sheet company called Hampstead Holdings. If you know more, get in touch.

New money

It’s been a good month for payment fundraising in Europe.

• Dojo, the fast-growing London-based POS-focused SME acquirer, raised $190m to fuel its European expansion. Having gained significant UK market share, Dojo is rapidly growing in Spain, Italy, and Ireland. It reported a maiden operating profit in 2023, £32m on £409m revenue.
• Dublin-based Nomupay, formed from Wirecard’s SE Europe and Asia units, raised $40m from SoftBank just months after a $37m Series B round. Nomupay specializes in providing global digital merchants with local acquiring in markets overlooked by Stripe, Adyen, and Worldpay. The funds will support growth in Japan, Indonesia, Singapore, and Vietnam.
• Payment infrastructure remains hot. Berlin’s Payrails, founded by Delivery Hero’s payment team, secured $32m Series A funding. Large merchants with complex needs – international payments, tokens, subscriptions, marketplaces, multiple AP’s – are building their own stacks, relying on off-the-shelf components from Payrails and competitors like Primer.
• Aufinity, a payment acceptance provider for 80 of Germany’s top 100 car dealers, raised €23m to accelerate expansion into Spain and Italy. Known as bezahl.de in its home market, Aufinity processes €7bn annually, runs on Adyen’s platform and claims to save 20 minutes per transaction by automating 98% of the order-to-cash process, including CRM/ERP integration.

Something blossoms in the state of Denmark

In Copenhagen, politicians, business leaders, and Nets (Nexi) have agreed a future plan for Dankort, the domestic debit scheme. Dankort has seen its market share plummet from 80% to just 40%, widely regarded as both a threat to national security and an unwelcome cost increase for merchants. Increasingly, Danes choose to pay with Apple Pay which processes co-badged cards along the higher-priced Visa rails.

Figure 3 Photo: Ministry of Business and Industry, Denmark

Under the new deal announced at what looked like a wedding reception in the garden of the Business Ministry, Nets will make Dankort available in Apple Pay, launch cards for under-18s and businesses, and give up its acquiring monopoly. Nets can raise Dankort fees, but small acquirers are exempt. Flatpay, a fast-growing Danish payment facilitator which ignores Dankort acceptance today, will welcome this change.

Wero watch

Wero, the payment wallet hoped to provide a European alternative to Visa and Mastercard, is making good progress in bringing new banks on board. After launches in France, Belgium, Germany, and the Netherlands, Luxembourg is next. Five banks in the Grand Duchy will migrate merchants from Payconiq (acquired by EPI, Wero’s parent) by the end of 2025, with consumer migration by mid-2026.

The acceptance network is growing too. Unzer is the latest German PSP to become a wero acquirer, joining Payone (Worldline), Nexi, VR-Payment, and Computop. Amsterdam-based Buckaroo has also joined and will launch wero first in Germany, then Belgium and the Netherlands. Worldline plans to offer Wero as an e-commerce payment option for German merchants this summer, with Belgium going live in October and France in early 2026.

Wero continues high-profile marketing, including giant banners at Frankfurt station next to Apple Pay. Europa zahlt sich aus. Europe pays off.

Figure 4 Photo: Wolf Kunisch

If wero is to challenge Visa and Mastercard, it needs to work across borders. While wero has swallowed national schemes like France’s PayLib and the Netherlands’ iDEAL, many local wallets don’t want to give up their independence – preferring international collaboration over consolidation. After months of debate, the EPI announced it will work with the European Payment Alliance (Euro PA), representing Italy’s Bancomat, Spain’s Bizum, Portugal’s MB WAY, and Sweden’s Vipps, to “interconnect” with these solutions for cross-border P2P and merchant payments.

Software/payment convergence

Money is starting to flow into European vertical software. Tebi, a Dutch ERP/POS/payments startup for restaurants founded by ex-Adyen staff, has raised €30m, bringing total funding to €56m. Unsurprisingly, Adyen powers the payments. Merchant pricing is good value at IC + 0.25% + €0.05, with softPOS available at a €0.06 surcharge per transaction.

Tebi’s new funding will support European expansion, with the UK first on the list. Tebi will compete with the newly launched Worldpay360 which is based on Yabie’s software and whose rollout has been slick, backed by strong video testimonials.

With US players like Shift4, Toast, and Lightspeed Commerce expanding aggressively in Europe, the restaurant software/payment market is heating up. It’s a highly competitive space, as illustrated by some aggressive pricing Shift4 is promoting in the US.

Can software conquer global acquiring? Andrew Dresner has a sharp take on the economics, suggesting that in the US, at least, the low-hanging fruit may already be gone.

Meanwhile in Italy, eCommerce platform Flazio, which claims 1m merchants, is launching FlazioPay, supporting both eCommerce and POS. Founder Flavio Fazio says orchestration and UX were built in-house, and that transactions will cost less than 1%. FlazioPay is launching on an ISO model but may shift to payment facilitation as volumes grow.

Agentic Commerce

Everyone’s talking about agentic commerce. With more people using ChatGPT and its rivals for product search, it’s only a small step to having AI agents make purchases on our behalf. Analysts everywhere are weighing in, but I think this explainer from PSE Consulting is the clearest.

The payments industry will need to move fast to keep up with shifting consumer habits. But agentic commerce has real upside, such as enabling seamless, low-cost micro-charging. That could finally reverse a decision some call “the original sin” of the Internet, that content should be funded by ads rather than direct user payments.

Startups are buzzing. At the Techstars Money 20/20 party, the first three people I met introduced themselves as “founder of an AI agent business.”

Bubble or bandwagon, it’s early days and many start-ups don’t even have a product yet. But take a look at ZincAPI (which lets agents buy from Amazon), PayOS (embedding Visa and Mastercard credentials in agent wallets), and Nakuda, doing similar work. In Europe, Knip is “coming soon” and Paid.ai, based in London, focuses on helping agent builders charge users for services.

For now, these solutions generally involve an agent showing up at checkout with a virtual card. Liability questions such as who’s responsible if an agent books the wrong holiday, will soon need addressing through changes in card scheme rules.

But the bigger shift may be in how merchants approach merchandising. As Simon Taylor puts it, the checkout page is dead. Humans using agents for search and purchase may never need to visit a website.

Stripe Tour

Stripe’s London event doubled as a slick brand showcase and a signal of expanding ambition. It was an exemplary piece of B2B marketing. Stripe talked about its customers and got its customers to talk about Stripe. Of course, it helps that Stripe powers pretty much all the cool start-ups, especially in AI. For example, ElevenLabs(the UK’s fastest growing unicorn) took to the stage to say Stripe was essential to its global expansion. This firmly associates the Stripe brand with business success. Any CEO in the audience would have thought “I’ll have what they’re having.”

And it’s certainly true that AI start-ups (see chart) are growing at an astonishing rate. Stripe says these are typically taking just 9 months to get to $5m annualised revenues. Many fail, of course, but are replaced by others also processing on Stripe.

Stripe’s big announcements were a push into treasury via stablecoins, the launch of orchestration and unveiling new POS integrations with Verifone and FreedomPay. The orchestration product is basic and seems more about shifting risk to 3^rd parties than trying to acquire new customers. Stripe’s risk tolerance is low.

With an increasingly large product suite, Stripe’s embrace of partners suggests it knows it can’t do everything alone. But any longer-established PSPs in the audience would have been despairing. Today, only Adyen and Checkout can keep up with the Stripe’s frantic pace.

Democratising contactless

The payments industry has been quick to seize on Apple’s forced opening of the iPhone’s secure element. App developers, including banks and PSPs, can now enable contactless payments outside of Apple Pay, avoiding its 5–15 bps fee. The trade-off? A slightly clunkier user experience: users must either open the app before paying or change phone settings to disable Apple Pay as default.

PayPal, Germany’s leading eCommerce payment method, has jumped in fast. It now supports in-store contactless payments with its app via a virtual Mastercard and boasts over 1 million activations. PayPal is pushing hard, offering rewards and special deals at over 2,000 merchant locations. German payment experts are upbeat and expect other app providers, from banks to loyalty and fuel brands, to follow suit.

Tipping pays off

Tipping, long a US tradition, is gaining ground in Europe, helped by pay-at-table tech. In the UK, Yetipay, an ISO reselling Adyen processing, has integrated Tipjar, an app that distributes tips directly to staff and handles admin for venues. Management says real-time tip visibility boosts performance. One operator reported a £4.30/hour lift in team pay and £5,000 in annual payroll tax savings.

Figure 6 Source: Yetipay

SoftPOS

SoftPOS is going mainstream in 2025, enabling new use cases and offering payment providers a low-risk entry into new markets.

eCommerce PSPs are using the tech to offer in-person payments without needing dedicated hardware. Shopify, the world’s largest eCommerce platform, now supports card acceptance via SoftPOS on iPhones, while Amsterdam-based Mollie has launched “Tap by Mollie” using software from Denmark’s Softpay.io which is fast becoming one of Europe’s leading vendors. Softpay now supports Girocard and has gone live in Germany with Lavego, a network operator owned by myPOS.

Germany’s savings banks have also entered the space: S-Payments has launched the S-POS Cube, a SumUp-style device powered by CCV’s SoftPOS application.

Figure 7: S-POS Cube. Photo from CCV

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Open banking

The UK open banking market continues to grow, though likely not at the pace investors had hoped for. Monthly transaction volumes have reached 25 million, with total usage growing at around 60% annually (see chart).

A key barrier to broader adoption is the lack of a unified scheme or acceptance mark. Consumers are confused by inconsistent branding and unclear refund rights. The industry has been very slow to recognise this, leaving space for Visa to plug the gap with its “Visa Pay by Bank” solution. This adds scheme rules and refund guarantees to open banking payments. The service has launched in the UK with support from Lloyds, Nationwide, and Checkout.com. Nordic markets are next.

Pricing also remains a challenge. UK per-transaction fees for open banking payments typically range from 6p to 20p depending on volume but often go lower. This is comparable to traditional payment gateways and rather lower than the margins enjoyed by card acquirers. It’s hard to see anyone getting rich by selling open banking payments alone.

New data from Boodil, an open banking payment vendor, shows the payment type competes most directly with Apple and Google Pay. With a sample of 20 Shopify merchants, open banking’s share was 9–17 points higher when these options were unavailable. Interestingly, when moved from the last to first option at checkout, open banking share jumped 6–14 points which looks like an easy win for merchants that want to steer customers to pay by bank.

The vendor landscape remains complex. Truelayer is arguably the largest player in Europe and claiming around 40% market share in the UK. In April, it processed $10bn across 15 million active users, though it’s unclear how much depends on Revolut, its biggest distribution partner. Beyond the UK, Truelayer sees its main growth opportunities in France, Germany, and Spain. It competes most closely with Trustly and Volt via a direct sales model.

By contrast, Token follows a white-label distribution model, selling through banks and PSPs. This keeps sales costs low but also compresses margins. Token recently secured investment from HSBC and became the first third party processor (TPP) to join Germany’s giroAPI scheme. This is an interesting initiative which offers premium API features such as SCA-exempt micro-payments, based on work from the Berlin Group.

Cash

Politicians have rediscovered a love for cash to promote economic resilience and financial inclusion although their policy prescriptions can sometimes seem old fashioned. Florida is making gold and silver legal tender. “It sounds good in theory,” said one precious metal dealer. “I just don’t know how they would implement it.”

At first sight, it seems obvious that maintaining some cash in the economy would help keep commerce moving in times of crisis, but the experience from Ukraine is very different. After the Russian invasion, the authorities moved quickly to promote digital money with offline capability. It’s worked well as Dave Birch explains.

As cash use declines, banks are finding it more expensive to run their own ATMs and national networks are consolidating. One exception is Revolut which has begun deploying a brand-led ATM at fifty locations in Spain. If successful, we can expect to see these machines in Germany, Italy and Portugal too.

Figure 8 Photo credit: Catalan News

Crypto corner

Stablecoins are one of the hottest topics in payments. Dave Birch has compared their potential to a monetary revolution on a par with William the Conqueror introducing tally sticks. It’s a more interesting analogy than you might think.

Most attention is focused on using stablecoins for cross-border transfers, especially into countries with limited access to the global banking system. But the CEO of Airwallex, one of the leaders in FX and remittances, isn’t convinced. He argues stablecoins don’t reduce costs, since compliance (AML/KYC) still drives most of the expense.

As Worldline can testify, PSP’s need to carefully monitor their customers and we already know that stablecoins are popular with criminals. A UN Development Programme report details how a Cambodian crime syndicate laundered billions via their own stablecoin, marketed with the slogan: “Stablecoins That Never Be Freezed.”

In the US, things are moving quickly. The Genius Act will introduce the country’s first stablecoin regulatory framework. Major retailers like Walmart, Amazon, and Sony are reportedly exploring issuing their own coins. “We’re hearing from merchants, ‘Hey, maybe this has got a lot less interchange,’” said the CEO of Fiserv which hopes to provide white label stablecoins to its clients.

Acceptance is getting easier too. Shopify now lets merchants accept USDC, one of the leading dollar stable coins, converting it to local currency with no FX or multi-currency fees. Coinbase and Stripe are behind the scenes. Standard Shopify Payments fees apply but a 0.5% cashback (likely funded by Coinbase) is available as a promo.

In other news

Sifted has issued a definitive list of European unicorns. The journalists include Viva Wallet, Satispay, Paddle, Teya, PPRO, Go Cardless, Rapyd and Checkout.com. Why no SumUp? Sifted tells me that its merger with Payleven in 2016 disqualifies the mPOS vendor as a unicorn although the same logic would surely rule Teya out of the running.

Consumers clearly prefer paying by phone, but the payment industry keeps churning out plastic. French TV news recently went behind the scenes at Thales to show card production in action.

One to watch: Romania may introduce a tax of 1 lei (€0.20) on all bank transactions, including card payments.

“We did it in Poland.” Cashfree.pl has released a TV commercial urging tourists to visit Poland and pay like a local.

If you read one piece on AI, make it Benedict Evans’ latest presentation, whose conclusion is, as ever, “nobody knows anything.” For more, Mary Meeker is publishing decks again.

Donald Trump has decided Jared Isaacman – Shift4 CEO and Musk ally – won’t be running NASA after all. Friendship with Elon seems no longer a political asset.

Is there an MCC for Madame Pipi? Bien sur. It’s 7299 – miscellaneous personal services/not elsewhere classified.

Figure 9 Photo Fabien Pesenti

And finally

A prototype of the world’s first card payment terminal went on sale at Paris auction house with an estimate of €300,000-€500,000. Weighing 45kg, this little beauty was built by Roland Moreno in 1974.

The Payments Business

Global Payments has outlined how it plans to deliver $600M in annual cost savingsfrom the Worldpay acquisition. The savings are split evenly across three areas: tech and vendor consolidation, operations and facilities; and organisational streamlining. Investors are sceptical. While the stock has recovered a bit since the deal was announced, it’s still 28% down on last year.

Management seems determined to unify both businesses under a single brand although it’s not yet clear what combination of “world”, “global” and “pay” will prevail. With the deal not closing until 2026, Global has introduced a new slogan. “We’re on it,” replaces “Payments made easy.” The rebrand also includes a new arc and a ping over the “g,” which apparently symbolise “forward momentum and precision” or possibly someone throwing a boomerang at a Wi-Fi signal.

Global has finally launched Genius, its new hero product that provides a bundle of payment acceptance combined with POS software. The retail version is “coming soon” to Germany, Austria, and Czechia. An enterprise version, targeting large restaurant chains, venues, and stadiums, is promised later this year.

Genius presents a dilemma in the UK, where Worldpay has just launched its own POS product, Worldpay 360, based on software from Stockholm-based Yabie. 

In a sensible move to simplify its structure in central Europe, Global has bought CaixaBank’s 45% stake in a joint venture with Erste Group covering Czechia, Slovakia and Romania for $108M. This gives Global Payments control of the JV and a good platform from which to distribute Genius. Extra sales will be welcome. In Europe, Global’s revenue grew just 4% in Q1.

Worldline also has growth challenges. Overall Q1 revenues fell 3%, and the stock hit an all-time low of €4.90, down from €80 in 2021. New CEO Pierre-Antoine Vacheron says results will improve later this year. 

Merchant services revenue fell 1% year on year, with “terminal and software availability” cited as a drag. Still, there are bright spots: notably, strong bank partnerships in Italy and the launch of a first product (basic eCommerce acceptance) through Cawl, Worldline’s high profile JV with Credit Agricole in France. Cawl = Credit Agricole Worldline in case you were wondering.

As you’d expect, Worldline remains bullish on bank distribution. Vacheron said he was “not that concerned about any drastic market shift from bank to ISVs. Banks still have significant appetite and significant growth in Europe.”

Management promises to execute on the basics: exiting non-core markets acquired in past deals and consolidatomg Worldline’s sprawling tech stack across four platforms: global acquiring, regional eCommerce (ex-Ogone), global eCommerce (ex-GlobalCollect) and POS acceptance (AXIS). Four platforms still seem a like a few too many; Adyen and Stripe are doing fine with just the one.

Nexi, Worldline’s biggest European rival, had a steadier quarter. Merchant solutions revenue rose 4.5%, with good performances in Italy, Poland, and Germany; the latter growing at 9% thanks to strong ISV sales gains via Orderbird (an in-house restaurant ISV) and increased referrals from its investment in Computop. Nexi also announced a potentially interesting partnership with Planet, starting in the Nordics and expanding into Italy and DACH, targeting hospitality and luxury retail. Advent, Planet’s owners, are reportedly looking for an exit and Nexi could be a possible purchaser.

Like Worldline, Nexi is built from a series of acquisitions, each bringing its own technical platforms. Unlike Worldline, Nexi has made good progress with platform consolidation and has now brought all DACH processing back from Fiserv. However, other cases are handled market by market. Nexi says success in Poland and Finland is due to local platforms run by local people and doesn’t plan changes.

The latest statistics from EHI, the German retail institute, show that PayPal remains the leader in eCommerce with 29% share of transactions. As Jochen Siegert notes, that figure jumps closer to 40% if you exclude Amazon, where PayPal isn’t accepted. 

Meanwhile, international debit usage for in-store purchases has jumped from 1% to 6% over the past three years; a small number, but a big shift, and one that’s likely to worry Girocard, Germany’s domestic debit scheme, which is used to being the only game in town.

In corporate news, Fiserv disclosed it paid $229M for CCV, a Dutch-based POS payment gateway earlier this year. At around $500 per merchant, this is good value and CCV has already helped Clover, its POS bundle of hardware and software, launch in Belgium.

Fiskaly, a provider of cloud-based fiscal receipts in Germany, Austria, and Spain, has acquired competitor Deutsche Fiskal from GK Software. Fiskaly says it is integrated with software at 600,000 POS and generates more than $10m annual revenues.

Finally, in Italy, banks are raising eyebrows over the government’s plan to sell PagoPA, the public sector payment gateway that processes €33B annually, to Poste Italiane for €500M.

Scheming

Visa and Mastercard delivered another strong quarter in Europe. Combined Q1 2025 volumes were up 14% in euros (11% in dollars), not bad for a region supposedly flirting with recession. Global cross-border growth has slowed slightly, possibly in response to the Trump tariff farrago, but not enough to cause alarm. Not yet anyway.

Despite the continued rise in scheme volumes, predictions of card-mageddon persist, driven by concerns surrounding protectionism, wallets, tokens, open banking, stablecoins, and agentic commerce.

What’s really happening? Jeremy Light offers a useful perspective: cards can be growing and dying at the same time. Use is up – there were 2.5 billion plastic payment cards shipped last year, according to the Smart Payment Association – but so is the list of challenges.

Pressure on cards is also mounting from regulators. A coalition of European retailers, including Amazon and Carrefour, has called on the EU to cap scheme fees. Their complaint: Visa and Mastercard have made their rules and pricing so opaque that even the giant merchants struggle to figure out what they’re paying for. The European Commission has reportedly opened an investigation, requesting evidence from PSPs and terminal vendors.

Meanwhile in the UK, Mastercard has settled a long-running £10 billion class actionlawsuit for just £200m after the litigation funder walked away. The payout to consumers, either £45 or £70, may be so small it discourages similar cases.

Reflecting the dominance of the American card brands, European officials continue to talk up the need for “strategic autonomy” in payments. But that requires building viable alternatives to Visa and Mastercard.

The digital euro is a long-term play, but in the short term the European Payments Initiative (EPI) has launched its commercial wallet. Called wero (from “we” and “euro”), the project got a boost with news that Revolut is joining although not as a shareholder. Revolut is the first neo-bank involved in the initiative and brings customers, credibility and fintech glamour to the project.

Wero currently covers Germany, France, Belgium, and the Netherlands. Wallets from other nations (like Bizum, Bancomat, and SIBS) have formed the EuroPA alliance which was bolstered this month as Vipps (Norway/Sweden) and Blik (Poland) have signed a letter of intent to join.

EuroPA advocates interoperability between schemes rather than their replacement with a single European product. Speaking at Web Summit, Blik’s CEO said: “Interoperability is not just a vision—it’s a necessity.”

Martina Weimar, wero’s CEO, initially dismissed the idea of interoperability with EuroPA members, saying it didn’t “create synergies.” But she’s since changed course, confirming that EPI is now exploring cooperation with Bizum, SIBS, and others.

Wero is live for P2P transactions (see below advert in Belgium) and the pilot eCommerce acceptance launches in May, with general availability in September. Nuveihas joined Computop (Nexi) and PPRO as a distribution partner.

Figure 1 Photo credit: wero

Over in the US, regulators celebrated Capital One’s acquisition of Discover by slapping Discover with a $1.2 billion fine for overcharging merchants. Discover had been misclassifying consumer transactions as commercial for 17 years. Capital One also inherits Discover’s large but struggling global acceptance network. Despite new partners like Bluecode and Airwallex, volumes have dropped sharply, largely due to the loss of AribaPay, its biggest client.

ISV

The highly fragmented European vertical software market is hotting up. US investors, excited by the returns in North America, are looking to replicate their success on this side of the Atlantic. For example, Shift4, says it is signing over 1,000 merchants a month in UK, Ireland and Germany on the back of its acquisition of Vectron, a hospitality focused ISV.

Vertical SaaS adoption in Europe is rather lower than in the US. Analysts put penetration at 5–20% compared to 60% across the Atlantic. Even taking into account the narrower processing margins here, there is great potential to sell new bundles of software and payments that deliver a virtuous circle of lower prices and greater merchant loyalty.

JP Morgan research, for example, shows software vendors can boost customer lifetime value by 3x using payments revenue to cut prices and reduce churn.

Small businesses are the primary target but, despite all the AI hype, new challengers are aggressively hiring good old-fashioned sales reps who show up in person.

Among payment-focused ISVs, Toast is aiming to replicate its US playbook in Europe, planning a stronger field sales push. And Canadian restaurant POS vendor Lightspeed plans to nearly double its European sales team from 55 to 100, focusing on a “hyper local,” city-by-city approach with plenty of boots on the ground.

Danish payment facilitator Flatpay expects to grow to 3,000 employees within two years and is hiring 125 people a month. Meanwhile, SumUp is on a hiring spree in Germany, with 120 vacancies, looking for sales reps to cover towns as small as 11,000 people. MyPOS prefers face-to-face too but is opening 22 showrooms across Europeinstead of hiring roaming reps.

Figure 2: On stage at the UniPaas event

How does the market look from the ISV perspective? At the UniPaas “Embedded Advantage” event in London, I moderated a lively discussion with CEOs of two vertical software firms that already offer integrated payments. They shared top tips for PSPs that want to partner with ISVs: be easy to work with, answer the phone when there’s a service issue, and stay flexible with your product roadmap. Kudos to UniPaas, a PF-as-a-service startup by ex-Safecharge execs, for hosting.

The increasingly easy integration of software and payments is inspiring new store technology formats. Here are two examples. Waitermate, based in the UK, offers an all-in-one device integrating payments, software, and customer ordering (like Deliveroo), priced from £30/month plus 0.8% per transaction on a PAX A920. 

In Poland, one of the biggest ISVs, Posnet, launched EVO, powered by a softPOS application from Planet Pay (not to be confused with Planet Payments). The TV commercial begins like a 70s porn film but remains safe for work throughout.

New shopping

Agentic commerce is the hottest trend in payments. Shoppers are already using AI to search for products so it’s a small step from “tell me about flights to Paris” to “book me the next available flight at less than €200.”

While AI capability is moving rapidly, payment rails are less agile so it was good to see Visa and Mastercard making big agentic commerce product announcements. Visa’s demo shows an AI agent booking a $1000/night hotel room with a tokenized credit card. Only a marketing team based in San Francisco would find this price normal.

PayPal launched new APIs to help agents integrate its checkout tools. The first partner is Perplexity, an AI tool that answers 150 million queries a week. Shopify is also reportedly adding AI-assisted shopping within ChatGPT, allowing users to search and buy without ever leaving the chat.

It’s all moving fast and but there are open questions. What if the AI buys the wrong thing? In case of fraud or errors, is the shopper, merchant, the AI or the card issuer liable? Inside the payment industry, nobody seems sure how agent-initiated payment flows would actually work as you can see from the well-informed comments on this LinkedIn post from Simon Taylor. It’s clear that Visa and Mastercard’s terms and conditions may need updating if agentic commerce is to flourish. 

As we shift from mobile-first to chatbot-first commerce, the traditional checkout page may become obsolete. Years of A/B testing on fonts and buttons won’t matter if customers never look at the page at all. AI agents won’t abandon carts because your billing address didn’t autofill.

The shift to chat-commerce favours brands with strong identities and unique products. But it’s tougher for those relying on old-fashioned retail skills such as curation or aggregation; the bots can do that just as well.

Startups offering to help merchants are mushrooming. Here are a few:

• Skyfire raised $8.5M to build autonomous payment networks (with 2–3% merchant fees on top of processing costs, I hope my bot can find a discount code).
• firmly.ai helps merchants show up in chatbot searches and plug into AI checkouts.
• In Europe, Berlin’s Nevermined calls itself the “PayPal of AI commerce.” 

SoftPOS

SoftPOS is a downloadable payment app that turns any consumer device – Android tablet or iPhone – into a payment terminal. Originally aimed at micro-merchants, it’s now catching on with established businesses.

In the UK, Sainsbury’s has added softPOS to its Zebra SmartShop devices. Shoppers use the device to scan products that they put into their shopping basket. Now, instead of docking the SmartShop device at the checkout and paying on a card payment terminal, they can pay directly on the SmartShop device itself. This should save time.

Icelandic payment facilitator StringIQ uses Ingenico’s softPOS for thousands of independent MoneyGram agents across Europe. The payment app is integrated with MoneyGram’s app. 

Kate Media, an ISV based in Vienna, provides tabletop kiosks for over 300 restaurants that take payments using Viva’s SmartPOS software. Kate says merchants save costs by reducing staff time spent taking orders. And that customers eat more and leave larger tips. It would never be economic to put traditional payment terminals on every table so this demonstrates the new business models facilitated by softPOS.

SoftPOS is a clearly long-term threat to payment terminals but, as PSE Consulting points out, traditional payment hardware is still needed to process offline PIN verifications (a big issue in the UK) and provide tactile key input for blind customers. And many merchants in Europe are still running on installed Windows software which limits the benefits of softPOS. The latter may explain why less than 20% of ISVs currently offer SoftPOS according to Flagship Consulting.

In vendor news, Munich-based softPOS vendor Rubean recently raised €1.5m to fuel international expansion.

A fresh twist on softPOS tech lets shoppers make eCommerce purchases by tapping their own card on their own phone. Cardiff startup Burbank, founded by ex-MyPinPad CEO Justin Pike, raised £5m for its Card Present over Internet (CPoI) solution, promising lower fees for merchants and fewer fraudulent transactions. This works fine if you’ve got a payment card to hand. For Apple Pay, you’d need two phones and this could get confusing.

Figure 3 A man tries using Apple Pay to pay with CPoI

The CPoI idea isn’t entirely new. Maxa Group and Visa (with a Brazil pilot last year) have tested similar products, though success remains elusive.

Open banking

The Financial Times recently highlighted the unexpectedly slow adoption of open banking payments in the UK although catastrophised this into the rather harsh headline “Why Britain’s fintech dream is fading.” 

Investors may be frustrated but the technology is far from a failure. One-off payments are growing at around 50% per year (see below) although it will still take a few years for open banking to make a meaningful impact on Europe’s largest payment market.

Figure 4 UK open banking payment transactions. Source: Open Banking Ltd

In vendor news, TrueLayer says it now processes $10bn monthly although it hasn’t released any information on revenue or margins. Meanwhile, new entrants continue to attract investment: London-based SSV SmartPay, offering a QR-code in-store payment solution built on Yapily’s APIs, raised £5m at a £30m valuation. SmartPay charges 0.5% per transaction. Nodapay launched a similar product priced at 20p per transaction.

A lot of hope is riding on Variable Recurring Payments (VRPs), the open banking answer to direct debits, which more than doubled transactions over the past 12 months. However, the commercial model (how the PSPs get paid) remains to be determined. Industry-commissioned economists estimate setup costs for VRP vendors at £1m–£3.5m, ongoing costs of £200k–400k, and suggest transaction fees may settle around 5–7p.

Open banking isn’t the only way to leverage bank transfers for merchant payments. While the UK payment industry debates cost of capital, Revolut is pushing ahead: Wizz Air now offers 10x Revolut points on flights paid via Revolut Pay. Though not strictly open banking, consumers don’t mind and the model shows how A2A payments can create value for all parties.

Elsewhere, Global Payments has integrated open banking payments into its Tom softPOS product, charging 0.79% per transaction in Czechia.

Power to the people

The recent power outage across Spain and Portugal has raised serious questions about the resilience of Europe’s payment infrastructure. Although Redsys, Spain’s largest card processor, reported that its platform remained stable and operational throughout the blackout, this offered little comfort to merchants whose terminals were blank or for consumers unable to withdraw cash from ATMs. Meanwhile, Bizum, the popular bank-backed mobile wallet, was down for ten hours.

Spain managed to cope with its day without power, but the incident underscores the urgent need for offline payment alternatives. Drawing on lessons from crises such as the tsunami and the war in Ukraine, Dave Birch argues that this situation calls for more technology, not less.

SoftPOS vendor Rubean highlighted that its customers continued trading on battery-powered devices that switched to cellular data. This makes sense. softPOS has been central to resilience of the digital payment system in Ukraine.

The Bank of Finland revealed that Nordic countries are planning to mandate offline card processing capabilities to provide backup during internet outages – not just to counter cyber threats from Russia but also the unpredictable pressures of social media-driven disruptions from America. As one board member put it: “We cannot rule out that one night someone on Truth Social comes up with using payments as a pressure tactic.”

Sweden’s central bank aims to establish a system enabling shoppers to make offline card payments for essential goods during disruptions lasting up to seven days.

The outage also highlights the importance of offline functionality for the digital euroand its sterling counterpart though implementation is complex. The Bank of England notes that while offline payments for a digital pound may be technically feasible, challenges around user experience and preventing double spending and counterfeiting make implementation difficult.

Authorities also see a role for cash. The Dutch central bank advises citizens to hold enough bank notes for a three-day blackout; around €70 per adult and €30 per child. But questions remain about cash’s usefulness in a blackout if tills won’t work and shops cannot open their electrically operated doors.

Crypto Corner

While crypto – stablecoins or otherwise – remains largely absent from everyday merchant payments in Europe, acceptance networks are slowly growing, particularly in France. Nepting, a POS gateway provider, will soon offer Lyzi, a crypto-to-fiat payment service, as an option on its terminals. Shoppers scan a QR code that directs them to a website where they can pay with crypto. This move could open the door for thousands of merchants to accept cryptocurrency, though the user experience still needs work. Lyzi has raised an additional €1.3 million to fuel its European expansion.

The Trumps aren’t helping the sector shake off its reputation for grift. The Financial Times reported that traders made $100 million from frontloading the $MELANIA coin, while diners were decidedly unimpressed by the catering (see below) at a $100,000-a-plate crypto-themed dinner hosted by the President. One guest told Wired, “It was the worst food I’ve ever had at a Trump golf course. The only good thing was bread and butter.”

Figure 5 Photo: Chris Skinner

In other news

JP Morgan has cancelled one of its two legal actions against the owners of Viva, the Greek mPOS vendor in which it invested $800 million in 2022. However, the bank’s second lawsuit remains active. “We haven’t withdrawn our damages claim for €917 million and we do not have any intention to,” a JPM spokesperson confirmed.

Pavel Sokolovals, founder of Kevin, the bankrupt Lithuanian open banking vendor, is publicly venting his frustrations. In a series of LinkedIn posts, he blamed former employees, journalists, and the insolvency administrator for his company’s collapse.

Worldline is pushing for staff to return to the office, but the union warns many buildings will run out of desks if more than 40% of employees show up—particularly at the newly opened office in Blois, France.

Simon Black, former CEO of Sage Pay and PPRO, is launching what he calls the “Davos of Payments.” The inaugural summit will take place in London next February, with BCG and Banking Circle buying the drinks. My invite appears to have been lost in the post.

PAX has launched a new terminal, the PAX A33. Taking a swipe at Worldline, PAX emailed European customers: “Imagine if the Yomani got a makeover, upgraded its brain, and finally discovered Android.” Ouch!

And finally

PSE Consulting celebrated Eurovision by ranking Europe’s mobile payment schemes. The Scandinavians win again.

The Payment Business

The major headline this month is Global Payments’ proposed acquisition of Worldpay, a deal that would create the world’s largest merchant acquirer. The combined company would handle approximately $3.5 trillion in annual merchant payments across six million clients.

This is the latest twist in Worldpay’s eventful journey. Spun out of Royal Bank of Scotland in 2010, it passed through the hands of Bain Capital and Advent International before going public in London. It was then acquired by US-based Vantiv, which later merged with banking technology firm FIS. The latter eventually admitted it had overreached and sold a majority stake to private equity group GTCR in 2023.

Both FIS and GTCR emerge well-positioned. FIS is set to exchange its remaining interest in Worldpay for Global’s issuer processing business—a relatively low-risk move that enhances its scale in a less competitive part of the payments ecosystem. GTCR, meanwhile, exits at a $24 billion valuation after entering at $18 billion. Nice work.

For Global Payments, the outlook is riskier. On the upside, it buys $2.5 trillion in payment volume, 500,000 enterprise clients, a strong e-commerce footprint, and a market-leading ISV platform, all at an attractive 8.5x EBITDA. Theoretically, there’s significant potential for cross-selling as you can see from this slide from Global’s investor deck.

But execution will be complex. Realising the promised $600 million in annual savings, equivalent to 18% of Worldpay’s cost base, will demand ruthless platform integration and the political skills of Machiavelli. The first steps may be the hardest as sources suggest Worldpay’s senior leadership resisted the deal.

Completion isn’t expected for another 12 months, reflecting multi-jurisdictional regulatory hurdles and competition concerns. With US antitrust policy becoming increasingly transactional, Global may regret not contributing to Trump’s inauguration committee (see below). And in the UK, a combined market share of well over 30% could well trigger a full CMA investigation.

Wall Street gave a snap verdict, and it wasn’t pretty. Global’s shares dropped 22%, touching their lowest level since 2016. Jefferies, an investment bank, wrote “It is clear that scale-driven deals in merchant acquiring are unlikely to work.” One former Worldpay exec posted on LinkedIn: “Global just gave itself epic generational indigestion in order to swallow a business still scarred from being eaten and then, well let’s just say, ‘ejected’ by FIS.”

Barclays has finalised its long-anticipated deal with Brookfield to overhaul Barclaycard Payments, the UK’s second-largest merchant acquirer, which processes approximately £300 billion annually. The business has struggled with legacy technology, outdated products, and sluggish decision-making, steadily losing share to challengers such as Adyen, Checkout.com and Stripe in the enterprise space, and to modern POS players like Dojo and SumUp in the SME market. Change was overdue but the structure of the Brookfield partnership is highly unconventional.

Initially, Barclays retains ownership and will inject £400 million into the business. Brookfield, a Canadian private equity group, will contribute “expertise” and earn a performance-based incentive. From year three onwards, Brookfield will have the option to acquire up to 70% of the business at market value, with its incentive potentially converting into a further 10% stake. Barclays plans to retain a 20% holding long-term, and the Barclaycard Payments brand will remain in use.

Brookfield’s efforts will be led by Sir Ron Kalifa, with several former colleagues from his days steering Worldpay’s separation from RBS expected to join. One of the partnership’s key tasks is a full-scale technology overhaul. Veterans of Worldpay will remember this as a complex, costly endeavour—close to £1 billion and nearly a decade in the making. 

Brookfield’s turnaround efforts won’t be helped by news that myPOS, the Advent-backed acquirer, has snapped up UTP Group, a key Barclaycard ISO partner. UTP’s latest accounts show a 15% drop in revenue to £10 million, with business impacted by new regulations banning excessively long rental contracts for payment devices. Nevertheless, UTP still boasts 68,000 terminals under management today.

This is the second major partner Barclaycard has lost to a competitor, after takepayments was acquired by Global Payments last year. For Brookfield, it underscores the urgency of stabilising the distribution network as it embarks on a sweeping technology and product overhaul.

myPOS, meanwhile, continues its European expansion, having recently acquired LAVEGO AG, a German network operator, and Toporder, a French retail software vendor. Integrating these disparate assets and turning scale into strategy will test the new myPOS leadership.

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In other corporate news, Nexi is set to acquire a majority stake in Banca Popolare di Sondrio’s merchant services business for €100 million. Pop Sondrio is seeking to bolster its financial position amid a potential hostile takeover, while Nexi aims to safeguard its existing partnership with the bank.

Rapyd’s acquisition of PayU’s Global Payment Operations (GPO) business now appears less transformative than originally anticipated. The deal will now focus solely on Latin America and Africa, with fast-growing markets in Turkey, India, and Poland remaining under PayU’s control. Separately, Israel-based Rapyd is reportedly raising $300 million at a $3.5 billion valuation, significantly lower than the $9 billion valuation claimed during its 2021 funding round.

Rapyd is a key player in Iceland and sponsors the country’s handball federation. However, the company’s involvement has become more contentious amid the ongoing Gaza conflict. After their recent victory over Israel in the World Cup qualifiers, the Icelandic women’s handball team protested by covering Rapyd’s logo with their hands during a publicity shot.

Figure 1 Photo credit: Visir

According to Finanz-Szene, DZ Bank, the umbrella organisation for Germany’s 700 co-operative banks, has bought out the minority investors in VR Payment, its merchant services arm. This move clears the path for further investment in VR Payment, which acquired Swiss payment gateway Wallee last year. In 2023, VR Payment, which focuses on POS solutions, reported €3 million in operating profit on €147 million revenue.

Fiserv has acquired CCV, the Netherlands-based POS gateway, for an undisclosed sum. A family business founded 65 years ago, CCV was one of the last independent gateways in Europe and holds a strong position in unattended payments, particularly in car parking, EV charging, and vending. Fiserv stated that CCV’s capabilities will help accelerate the distribution of its Clover platform across Europe. In addition, CCV brings a 30% stake in Rubean, the Munich-listed SoftPOS vendor.

With CCV now under the ownership of a major acquirer, merchants will need to look further for truly independent gateways, with options now limited to providers like Freedom Pay, AEVI, Bluecode, and Nepthing.

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The US payments sector played a notable role in Donald Trump’s record-breaking $240 million inaugural committee fundraising. Jared Isaacman, founder of Shift4 and the President’s pick to run NASA, contributed $2 million. The Electronic Payment Coalition, an industry group lobbying for high interchange rates, donated $1 million. PayPal gave $250,000, Mastercard $200,000, and Visa, whose heart clearly wasn’t in it, pledged a measly $50,000.

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2024 has been a tough year for payment hardware, with the three largest vendors all reporting declining sales, primarily due to weakness in North America.

PAX, a Bermuda-registered, Hong Kong-listed company based in China, saw global revenues fall 3% in H2 2024, with operating profit dropping 43% to $41 million. On a positive note, 60% of terminals sold are now running Android, with the A920 Pro performing particularly well. SaaS revenues from the 14 million devices connected to PAX Store grew 33% to $10 million. Every little helps. EMEA was the only region to show any growth, with sales edging up to $150 million. Management cited “volatile” demand in Germany and Spain, but reported strong sales in the UK, France, Italy, and southeastern Europe.

PAX’s main rivals, Verifone and Ingenico, are both owned by private equity and were late to the Android market. Analysts expect Verifone’s revenues to have fallen in 2024, though a rebound is anticipated in 2025. Verifone has raised $235 million from existing investors to reduce its leverage from a hefty 7.7x EBITDA to more sustainable levels. Ingenico’s owners also recently refinanced and took a $100 million dividend. Verifone generates 50% of its revenue from services, compared to Ingenico’s 23% and PAX’s just 6%.

MPE 2025

The MPE 25 conference and exhibition held last month at the Berlin Intercontinental showed the European payment industry in good form. Delegate numbers were buoyant, sponsorship strong and there was plenty of innovation on display. MPE remains my favourite conference. The organisers understand their audience and consistently delivery high quality, relevant content. It’s also a friendly event where people are happy to chat to strangers or take a meeting from a cold contact. The networking is unparalleled and vendors I spoke to were very happy with the volume of new sales leads.

Yet several elephants stalked the Berlin Intercontinental during last month’s Merchant Payments Ecosystem conference, notably Europe’s need for strategic autonomy, the relevance of stable coins for selling products to Europeans and the continent’s underperforming digital platforms. There was plenty of product focused discussion too – notably on payment infrastructure, open banking and smart payment terminals. Make a cup of tea and read my report.

Figure 2 Geoffrey Barraclough at MPE 2025

The new world

While Trump’s tariffs hog the headlines, the worsening geopolitical situation also has significant implications for the European payment industry. Visa and Mastercard dominate merchant payments, with 13 of the 20 eurozone markets relying on international cards at the point of sale. These two American schemes are also the primary means of cross-border consumer transactions. And in the UK, Mastercard even powers the domestic inter-bank system, adding further risk.

This poses a challenge if the US decides to use its influence over merchant payments. Could Visa and Mastercard be instructed to cut off entire countries or merchants that the US administration disapproves of?

As the unthinkable becomes thinkable, Europe is realizing the need for a domestic alternative. And fast. 

While the European Central Bank sees the digital euro as a potential solution, this Central Bank Digital Currency (CBDC) remains years away from launch. Europe’s best hope for a domestic rival to Visa and Mastercard lies in the European Payments Initiative (EPI) and its wero scheme. Wero, backed by northern European banks and supported by Nexi and Worldline, will first consolidate domestic products from Belgium, the Netherlands, and France. For example, iDEAL will be co-branded with wero in Q1 2026. By the end of 2026, wero aims to cover eCommerce, POS, and P2P transactions in these markets and in Germany too.

Sensibly, wero plans to cooperate with existing market players rather than compete against them. Acquirers like Nexi/Computop and PPRO will distribute the product to merchants, and consumers will be able to add domestic schemes to their wallets as an alternative funding source.

For wero to compete with cards, it must secure interoperability across European markets. The EPI has issued an open letter calling for European strategic autonomy in payments and inviting other domestic schemes and banks to join as shareholders.

While this move has strong political and consumer support, there are risks that competition will result in fragmentation, and confusion. For example, an alternative coalition of Italy’s Bancomat Pay, Spain’s Bizum, and Portugal’s MB Way plan to launch interoperability between their schemes by June. And Poland’s Blik, which has Mastercard on its share register, aims to expand independently and will only join others for P2P transactions, not merchant payments.

Scheming

Visa has shaken up the acceptance world with the launch of its Acquiring Monitoring Programme (VAMP), significantly increasing pressure on acquirers to reduce fraudulent transactions. VAMP is expected to lead to more stringent underwriting checks, particularly for merchants with high dispute volumes or those in high-risk industries like subscriptions. As a result, these merchants may face fewer acquirer options and higher costs. Solidgate, a PSP specializing in high-risk categories, has published a helpful paper explaining the background.

Mastercard, Visa and Revolut have challenged the UK Payment Systems Regulator’s decision to impose a price-cap on cross-border interchange applied to British cardholders buying from EU merchants. The ability to raise these fees from 0.3% to 1.6% was an unexpected Brexit bonus for UK issuers but one that the competition authorities have finally caught up with.

ISV

We’re seeing the convergence of software and payments, with PSPs either partnering with independent software vendors (ISVS) or commercialising their own software. Selling stand-alone payments to small businesses at scale is getting harder but Europe still lags behind North America in integrating payments and software. A new study from EY Parthenon reveals that 40% of ISVs serving merchants have never integrated payments into their offerings showing that there is plenty of the market left to attack.

Join me at “Embedded Advantage: Unlocking Growth with Payments and AI” hosted by Unipaas, a PF-as-a-service vendor, in London on the evening of 13 May. I’ll be moderating a panel discussion featuring two software vendors that have put payments at the heart of their strategy. If you’d like a ticket, please get in touch with the organisers.

Ryft, a London-based embedded payments vendor targeting eCommerce ISVs and marketplaces, has raised £5.7m. The company claims to serve 1,500 merchants via its partners and offers significant savings compared to Stripe, its key competitor. Ryft is also targeting banks and acquirers that lack their own ISV propositions. One such partner is Clearhaus, a Danish acquirer, using Ryft to reach UK marketplace customers.

Following Shift4’s launch of Skytab in the UK, Worldpay has started distributing Yabie, a Swedish retail and restaurant software product. The solution is branded “Worldpay 360” and looks cool. Given recent news, Worldpay’s sales team may soon also need training on Global Payments POS. Which looks less cool.

Lightspeed, a Canadian ISV earning 60% of its revenue from payment processing, is scaling its field sales and marketing teams across Germany, the UK, France, Switzerland, and Benelux (see chart below). The company sees a major opportunity to serve full-service restaurants with its integrated offering of software, hardware, and payments. In Europe, Lightspeed partners with Molle, Adyen, and Worldline.

Convergence in Italy will get a boost from a new law which mandates ECR/payment integration from January 2026, primarily to automate the transmission of tax information. This provides the perfect opportunity for ISVs and SmartPOS vendors to start customer conversations.

Finally, Paddle, the London-HQ’D merchant-of-record vendor for 5,000 software-as-a-service vendors worldwide, reported £44m losses in 2023 on revenues of £57m in its delayed accounts filed at UK Companies House.

New shopping

Consumers are quickly getting used to asking AI for help with product searches, and it’s only a small step to asking bots to act as your agent to confirm purchases and pay for goods and services. McKinsey has a useful paper explaining what AI agents are and how they might work, while Dave Birch explores the implications for payments. One key question remains: will bots prefer paying with stablecoins for efficiency or with American Express for the rewards?

So far, most innovation has focused on the buy-side. Several vendors have launched products or started companies to help agents become commerce agents, though it’s still unclear what problem we’re aiming to solve. After all, my printer has been automatically ordering and paying for ink on my behalf for years.

We’re waiting to see what innovation arrives on the merchant-side and much of this will need to be about revenue protection. As AI agents arrive at checkout pages with virtual cards or stablecoin wallets, they present both sales opportunities and increased fraud risks. How do you know that the agent represents who it says it does? How can you be sure the agent has authority to agree to your terms and conditions? I’m hoping the industry provides answers soon.

Product

In the UK, Hull-based thankyü offers a fresh approach to tipping. Customers tap a wristband worn by the server, with money flowing directly to the employee—no ePOS integration needed, and it avoids payroll taxes.

Merchant cash advance (MCA), is a fast-growing embedded finance product. Deeper integration with commerce platforms has made distribution easier, and merchants appreciate the flexible terms. Prague-based Flowpay has raised €30m in debt financingand claims to be on track to become the next Czech unicorn. Meanwhile, UK-based Liberis has partnered with Teya to lend to SMEs in the Czech Republic and Slovakia.

In the UK, regulators have been told to promote economic growth. The Financial Conduct Authority has responded with a proposal to remove the £100 cap on contactless transactions. I’d be surprised if this lifts GDP much, especially as PSPs may still set voluntary limits.

Open invoice, the original buy now, pay later approach used by Germans since the dawn of the internet, is under threat from new regulations.

Keep an eye on Revolut. The bank’s full-service SME merchant services, already available in the UK, Ireland, and Italy, have now launched in Spain. The company is highlighting the value of on-us transactions in which it processes transactions from Revolut cards itself. Revolut Pay users earn double loyalty points, while merchants enjoy low fees of 0.5% + 2c per transaction. If Revolut can successfully cross-sell to its large SME customer base, it could capture significant market share from incumbents. While the Revolut POS terminal is sleek, its new ATM is even cooler—though people standing 100 meters away may see your balance.

Figure 3 Photo from Marcel van Oost

Share Business of Payments

Openbanking

UK open banking payments grew 67% in March, reaching 27m transactions. While positive, this isn’t yet the exponential growth many vendors’ business plans were based on.

Figure 4 Source: Openbanking.org

The Financial Conduct Authority (FCA) has announced it will prioritise putting UK open banking on “a commercially sustainable footing.” While standard APIs will remain free, banks will be encouraged to offer premium services, such as providing merchants with address details.

Although this is a step in the right direction, it’s not enough. For open banking to rival card payments, there needs to be a scheme with a widely recognized brand and a clear set of rules for authorizations, refunds, and dispute management. And we need to accept that the 0.2% debit card interchange fee is a reasonable benchmark.

Instead of marketing themselves as cheaper than debit, open banking vendors should focus on delivering a better customer experience. Trustly, for instance, uses the technology to reduce onboarding times for new users on gambling websites to just 20 seconds. Whether or not you think this is a good for society, it’s no surprise that Trustly is one of the few consistently profitable A2A providers in Europe.

PSE consulting has looked whether Britain could spin-up a domestic scheme based on open banking. Their conclusion: more work is needed. For example, there’s no authorisation messaging, and we lack systems to provide real-time confirmation to merchants’ POS systems. Simply showing a confirmation screen on a banking app won’t be enough, scammers can already fake these.

The long-anticipated consolidation of loss-making open banking start-ups is underway. Banked has acquired VibePay, a London-based company that offers SMEs free open banking transactions, monetised with a rather complex loyalty program tied to conversational commerce. The combined entity is valued at “over $100m,” according to reports.

Banked should be one of the open banking winners. It has global reach and financial backing from bluechip investors such as Citi, NAB, and Bank of America. However, if the combined entity is valued at just $100m valuation, this may suggest that investor enthusiasm in the sector is cooling.

Lastly, Tink, the Stockholm-based provider owned by Visa, announced 10,000 merchants are using its Pay by Bank solution and reached a new peak of €100m processed in a single day.

Cash

Worldpay’s latest global payment survey shows that cash substitution is nearing its end in many markets, with cash use at point of sale declining just 2% per year. This suggests we may have reached the core group of people who either can’t or won’t use electronic payments.

There’s also strong resilience argument for keeping some level of cash payments in any country. Sweden’s central bank has urged it Government to mandate cash acceptance in key product categories.

Retailers, now accepting the persistence of cash, are updating their infrastructure. At this month’s Retail Technology Show in London, I was surprised to see so much cash handling technology on display. However, the same can’t be said for banknote printers. De La Rue, which supplies cash to half the world’s central banks, saw its revenues drop 18% to £207m in 2024.

Crypto Corner

Stablecoins are making an impact in international treasury and money remittances, but these fall outside the scope of this newsletter. Merchants remain largely indifferent, with crypto hardly mentioned at the MPE conference in Berlin. For now, neither Bitcoin nor stablecoins are expected to play a significant role in enabling mainstream European merchants to sell to other Europeans.

Of course, crypto is still useful for gambling, money laundering and crime. The FT reports that crypto casinos generated $80bn of gross gaming revenue last year. These operators, incorporated legally in the usual locations such as Gibraltar and Malta, are accessed through “VPN, mirror links or URL directions” by punters looking to evade local prohibitions.

In the UK, a man received four years in prison for facilitating money launderingthrough the operation of 12 crypto ATMs. Officials said he was marking up transactions 30%-60%.

In other news

The secret of Flatpay’s phenomenal growth is at the top of the sales funnel, according to its management. The marketing team use an AI solution from Kernel that filters hundreds of thousands of merchants into a manageable target list for its sales team.

The German payment industry has set up a new initiative called “Deutschland bezhalt digital inspired by the successful Cashfree Poland project. It offers a free terminal and free processing of €50,000 of transactions to merchants that don’t yet accept electronic money. This lines up with speculation that the new German government will make digital payment acceptance mandatory.

Worldline’s new management has ordered staff back to the office. According to its trade union, the CEO explained “It’s very important for all of us to be much more present in the offices, to fill the purse of the company…. And that’s something we can’t do when we are working from home.”

Adyen suffered a major denial of service attack that “generated millions of requests per minute, originating from a globally distributed and constantly shifting set of IP addresses.”

An unexpected bonus of the increasingly cash free economy is fewer kids hospitalised after swallowing coins. “Historically, coins accounted for over 75% of objects swallowed by children under six years old,” explained a doctor.

And finally

A reminder to product teams to always make it clear where customers should tap their cards.

Figure 5 Photo: Simon Kemp

The Payments Business

Full year results from the leading payments processors showed very mixed fortunes: newer players with modern platforms prospered, established businesses struggled.

Stripe led the way with a 40% increase in volume during 2024 to $1.4 trillion and a secondary share sale at a whopping $90bn valuation. Stripe’s management says the company is profitable although released no figures. There are are still no plans to IPO.

One reason for Stripe’s good performance is its success in recruiting AI start-ups as customers. Subscription-based AI services are growing even faster than software-as-a-service vendors did a few years ago. 

Figure 1 Source: Stripe Shareholder Letter 2024

Adyen also reported an excellent 2024. Net revenue was up 23% to €2bn and EBITDA margins remain impressively close to 50%. Adyen’s customer metrics are also strongly positive, with continued growth in the number of merchants processing across channels and in multiple geographies. This healthy performance contrasts with stagnation at Worldline and Nexi. The two traditional European payment champions are struggling with competition from Adyen in enterprise, Stripe in digital and Flatpay, myPOS, SumUp and others in the small business sector.

With shares in both Worldline and Nexi near record lows, investment bankers have been pitching ideas for a merger. Combining the businesses could certainly deliver cost savings although the ensuing disruption would make fixing the product gaps even harder. The Italian government is not keen on the idea and reportedly favours a private equity solution for Nexi.

Despite revenue falling 1% in H2 2024, Worldline reassured investors with news that its JV with ANZ in Australia is growing again and that the JV with Credit Agricole in France will go live in Q2 of this year.

Shift4 is fast becoming a major player in Europe and made a bold move into retail with the $2.5bn acquisition of Global Blue, number one in tax-free shopping. I travelled to Las Vegas for the Shift4 investor day and came away very impressed with both Shift4’s strategy and its people. The equity analysts were less excited. Worried about 2025 guidance and the transition to a new CEO, they marked the shares down 25%. Read my full report on the Business of Payments blog.

In corporate news, Paysafe revealed it had received more than one takeover offerfollowing results showing revenue up just 1% in Q4 2024. It’s easy to see why private equity might be interested as the share a very cheap. Paysafe went public in 2020 at a value of $9b but its current market capitalisation is just $1.4bn. That’s very low for $130bn of payment volume.

Arif Babayev & Nurlan Zhagiparov, co-founders of London-based DNA Payments Group, have made a big move into Austria. The two former bankers have bought 75% of Card Complete and promise to bring much needed modernisation to the business. Card Complete has 1m cardholders, 30,000 merchant customers and processes c.€10bn, roughly 20% of the Austrian acquiring market. It’s a daring move. Card Complete is losing money and badly needs investment.

Barclays is reportedly close to offloading its merchant services division (the second largest acquirer in the UK) into a joint-venture with Brookfield, the giant Canadian asset manager. Barclaycard Payments has been struggling for some time with antiquated products, slow decision making and a decaying distribution strategy. Barclays has been trying to sell the division but failed to find a buyer. Instead, the bank will inject £650m into Barclaycard before selling 10% to Brookfield. The Canadians, who also own Network International, would have an option to buy a further 80% of Barclaycard after three years.

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The first rule of JV’s is to always be the majority shareholder as JP Morgan’s unhappy relationship with Viva demonstrates. The Information reports that the giant US bank has been looking for an exit. JPM reportedly offered to sell its half its minority 48.5% stake for just $175m, a 50% discount on its original investment. Meanwhile Viva’s CEO has filed an injunction against JP Morgan to block any further lawsuits.

Whatever its future ownership, Viva is not slowing down. Modestly describing itself as “Europe’s first acquirer,” Viva has bought fiskaltrust, a business generating fiscal and/or VAT receipts at over 100,000 points of sale in Austria, Germany, France, Italy, Spain, Portugal and Greece. The companies demonstrated a joint solution at the EUROCISwhich uses QR codes. Slicker solutions are available.

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Market Pay, the acquirer spun out of Carrefour, has expanded into Denmark with the acquisition of AltaPay, a Copenhagen based PSP. Altapay is an ISO for Elavon Europeand manages >€3bn volume from 400 merchants trading in-store and online. Although Altapay has struggled in recent years (recording just €0.3m EBITDA in 2023) blaming macroeconomic conditions and a “cleanse” of its merchant, this is a good move from Market Pay. The French group gains a springboard into Denmark including a partnership with Danske Bank as well as integrations to Microsoft’s in-store software.

MyPOS is making a move into Germany with the acquisition of Lavego, a Munich-based network operator specialising in unattended applications such as vending and petrol. The merger will give myPOS a very useful direct connection to Giro, the German debit scheme. Lavego, which generated sales of €7m in 2023, tried to sell itself to Unzer in 2020 but the deal was blocked by the German regulator.

Capital growth

We’re seeing a steady flow of small fundraises that highlight what’s hot in European payments.

• Hands In, based in London, has raised £1m. The business helps shoppers spread payments for high ticket items such as holidays between friends and family members. Hands In won the innovation contest at MPE in 2023 and has Air Europa, the Spanish airline, as a marquee customer. Air Europa says it has generated over €3.8m in incremental revenue through the service.
• Receipts, an Oslo-based business that sends digital receipts from POS systems to banking apps through card linking, has raised €1.7m. It’s a tough proposition to get right. Flux, a UK start-up that did much the same thing raised £9m but entered liquidation last year owing its creditors £8m.
• Orain Technologies, a Barcelona HQ’d vending payments hardware and loyalty vendor, has raised €6m. The investment will fund expansion into new markets in Europe and Latin America. Competition is fierce in vending with Nayax, NMI and others. Orain, which claims over 1,000 merchant customers, will now use Visa Acceptance Solutions (Cybersource) as its payment gateway.
• Urban Fox, based in Dublin and one of Techstars 2019 cohort, has raised €8m for its anti-fraud product that protects against complex synthetic attacks.

Scheming

A new report from Denmark’s central bank brought yet more bad news for Dankort, the local debit scheme which is owned by Nexi. With high fixed costs and declining volumes (see chart below), is Dankort entering a doom spiral? The Danish network’s average cost per transaction is now higher than international cards at DKR2.9 (€0.39) vs €2.3 (€0.31).

Figure 2 Source: Denmark Central Bank

Germany’s Giro scheme is in much better shape but disappointed with 2024 payment volumes growing just 1% to €307bn.

Blik is in fine form. Poland’s mobile payment standard reported a storming performance in 2024 with total volume growing 37% to €83bn. Contactless payments at POS, where Blik works by generating a virtual Mastercard, more than doubled to €2.8bn. Blik has expanded to Slovakia and launching in Romania soon.

Turning to Italy, Bancomat’s new private equity owners backed their growth strategy with the acquisition of Flowpay, an open banking specialist. Flowpay, based in Florence, should not be confused with the Czech Flowpay which provides merchant cash advance.

Elsewhere in Italy, Satispay, a payment and meal voucher app, has raised a further €60m at a self-declared unicorn valuation. Total capital now exceeds a remarkable €500m. Local commentators are not impressed with 2024 financials of €45m losses on just €45m revenue. Impatient investors may have demanded an early move to profitability. Satispay has shocked its merchants by introducing transaction fees for the first time. These are 1% for POS and 1.5% + 20c for eCommerce transactions.

Two into one

The UK’s Payment Systems Regulator has documented how the schemes took advantage of the Interchange cuts mandated by the EU in 2016 to increase their own fees. Between 2017 and 2023, Visa and Mastercard raised their dues and assessments by 25% ahead of inflation. The PSR says having only two schemes is anti-competitive and costs UK business £170m extra each year.

The schemes won’t be unduly worried about the PSR’s proposed light touch remedies: new obligations on Mastercard and Visa to explain, consult on and/or document the reasons for price changes and to provide more detailed financial information to the PSR going forward. Dues and assessment will keep going up.

While the PSR has concluded that having two payment schemes is too few, the British government has concluded that having two regulators is one too many. 

Farewell then, Payment Systems Regulator which is to be merged in with the, much larger, Financial Conduct Authority. As one official observed “No other major economy has a standalone payments regulator like this, and it is hard to make the case for it continuing to exist.” It seems that the PSR paid the price for its clumsy handling of account push-payment fraud which left the regulator few friends in the industry.

ISV

As businesses increasingly favour buying payment acceptance as an integral part of their point of sale software, payment companies need to make themselves more attractive to ISVs, now often referred to as “platforms.”

Yanvin, based in Paris, is the latest PSP to offer a platforms proposition with the hope of expanding its distribution. As an alternative strategy, some processors are looking to lock-down distribution through acquiring software companies instead. For example, Sipay, based in Madrid, has bought Pikotea, a restaurant specialist based in Cadiz.

ISVs are moving in the other direction. They are increasingly likely to build payments into a vertically integrated stack such as this one from POSbistro, a Polish vendor. The proposition includes restaurant software, payment acceptance via PeP (Nexi) and fiscal printing all running on one, portable, Sunmi device.

While payment bundling is commonplace for small business-focused vendors, it’s a more difficult proposition for enterprise software vendors to get right. Their customers often like to buy components separately to get the best possible deal.

So it’s interesting to see NCR Voyix, whose software powers the largest retailers and restaurant chains around the world, hire a new management team from the payment world. NCR has recruited Jim Kelly (ex EVO and Global Payments) as CEO, Benny Tadele (ex ACI) as EVP Restaurants and Darren Wilson (ex EVO and Gobal Payments) as EVP Retail. Jeffrey Sloan, the former Global Payments CEO, has joined the board. The team’s first move is a deal with Worldpay to sell a combined cloud-based payment/software proposition to retailers and restaurants. New revenue streams are much needed. NCR’s sales to retailers fell 10% in 2024 .

New shopping

Large retailers have a mixed views on autonomous stores. Sainsburys has ditched Amazon’s Just Walk Out technology after a lengthy four year pilot in London. Customers were confused and typically preferred to use more conventional checkout options.

Autonomous technology may be more appropriate for unmanned locations where it can transform empty spaces into walk-in vending machines. In Germany, Reckon is powering a series of small-format Rewe convenience stores at railway stations and EV charging points, locations where conventional stores wouldn’t be viable.

One of the problems with self-checkout is that shoppers regularly steal the merchandise. Tesco has had enough and introduced scales to check that trolleys with self-scanned shopping are the correct weight. Customers are not impressed. “Am I at border control or Tesco?’ one asked.

Smartcarts may be a good compromise between full autonomy and the pain of self-scanning. In France, Intermarche is testing devices from Shopic equipped with sensors that automatically scan products into the trolly. Shoppers pay on standard payment terminals at the end of their visit.

In biometric news, three of South Korea’s largest convenience store chains are implementing a face-based payment system called Toss Face Pay. The branding may need some work if it comes to English speaking markets.

Special agents

AI search is becoming increasingly common. A British politician was ridiculed for revealing he had asked ChatGPT “What would be the best podcasts for me to appear on to reach a wide audience that’s appropriate for my ministerial responsibilities?”

Joking aside, this is a serious issue for payments. As people get used to asking AI to research and select products, it’s a small step to asking AI to act on your behalf to confirm transactions and buy stuff for you. And as merchants start employing AI agents to sell their products, shoppers will want autonomous wallets to negotiate their side of the deal.

Agent commerce is likely to be one of the next hot topics. Here are some good examples such as ordering ingredients for dinner from a photo and recipe. It’s like that such agent to agent commerce will need a new set of tools and, according to Simon Taylor, could spell the death of the checkout page as we know it.

SoftPOS

SoftPOS volumes are growing quickly although from a very low base. Visa got plenty of press coverage for saying the value of SoftPOS transaction had tripled in 2024 although didn’t release any numbers. Worldline told investors that it is processing just €13m per month through its “tap on mobile” product although volumes are “growing fast.” Nobody is going to get rich yet.

Poland has been a successful market for SoftPOS with over 50,000 terminals live already. Cashless.pl has found nine solutions on the market and published a helpful summary of the features offered by each one. 

Initially, SoftPOS was viewed as a largely micro-merchant proposition but we’re seeing plenty of enterprise deployments. 

Shoe shops have been among the early adopters in retail. Rubean has deployed its SoftPOS at Deichmann, the German footwear retailer where it runs on Zebra handhelds integrated with Gebit POS software. Deichmann has even built a special mobile checkout trolley which includes a security tag deactivator and additional items to sell such as shoe polish.

Viva has implemented its SoftPOS solution at Cosmos Sport, in Greece.

Openbanking

What happens if Trump 2.0 instructs Visa and Mastercard to turn off a particular merchant or country that the new administration does not approve of? At a time of geopolitical instability, open banking offers a platform to build consumer payment rails that are independent from American influence or pressure. PSE Consulting look at what needs to be done. Interoperability between wero and similar national schemes would be a good start.

A new survey found that about half of British adults are not familiar with the terms “Pay by Bank” or “account to account payments.” In fairness, a similar proportion hasn’t heard of Faster Payments either and that doesn’t stop people using the service. It’s all about the customer experience.

Klarna’s CEO has blasted open banking as a “failure.” His beef is that the APIs provided by the European retail banks “continue to be broken, lack functionality, and banks add as much friction as they can.”

Whatever the quality of the underlying messaging, the market remains well supplied. The latest Konsentus tracker records 372 third party processors (TPP) in the EEA and 196 in the UK. TPPS’s are organisations with approval from one or more national regulators to provide open banking services.

Airlines are likely to be early adopters of open banking payments because they have a strong commercial interest in moving transactions away from cards. Edgar Dunn estimates that airlines pay $22bn each year in merchant service fees, 2.2% of total revenue. Those consumer credit guarantees are expensive! Consumers will need incentives to switch so it’s a smart move from Qatar Airways to offer 2.5 Avois per £ when paying by bank transfer. If you don’t mind transferring the money instantly and losing your consumer rights, this could be a good deal explains a points guru.

In vendor news, Volt, the self-styled “first global real-time payment network” recorded sales growing strongly in 2023 to £13m. Losses have narrowed. More details on the Business of Payments blog. Volt reports £1.46 revenue per transaction. This is higher than most competitors and indicates that Volt is focusing on high-margin sectors where pay by bank delivers significant value, such as gaming and crypto. In contrast, vendors trying to make a profitable business selling bank transfers to general retailers will likely struggle for some time yet.

Meanwhile, Banked, another London-based open banking vendor, reported an operating loss of £24m in 2023. Banked is active in Europe, USA and Australia. With a stellar investor list including NAB, Citibank and Raypd, Banked shouldn’t want for additional capital if needed.

Cash

As consumers shift to digital money, access to cash for those left behind is a growing political problem.

Only 3% of Norwegians use cash to pay for their shopping but the Government is introducing a new right to pay in cash for items up to 20,000Kr (€1,700). Retailers must give change “unless there is a clear discrepancy between the banknote offered as payment and the amount to be paid.” Iceland’s central bank is considering a similar measure and the Dutch parliament is deliberating an amendment to its anti-money laundering bill that would create an obligation to accept cash up to €3,000.

In Poland, the Commissioner for Human Rights has been asked to rule whether cashless parking meters discriminate against drivers without payment cards or mobile phones.

Cash has also entered into the German culture wars. According to Payment and Banking, the CDU party which won the recent elections is committed to the preservation of bank notes “because cash is lived freedom.” The opposition AfD agrees and wants to keep cash as a safeguard against “expropriation of [bank] account holders.”The SPD and FDP are in favour of an obligation to accept electronic money. The Greens are against “due to the high fees for traders.”

Crypto

The crypto industry is heading in two opposite directions. In one corner, Trump 2.0 is putting rocket boosters under the memecoin casino. In the other, stablecoins are ready to provide legitimate actors and criminals alike with tools to drive down the cost of remittances and facilitate new and (sometimes) useful products.

Stablecoins offer the technical benefits of crypto without the wild volatility. Fintech commentators are writing of little else. I’d recommend Matt Brown explaining how stablecoins work and Simon Taylor on the business case. His view is that stablecoins are not necessarily cheaper than cards or SWIFT messaging but could be better.

Stripe’s management is certainly very bullish about its acquisition of Bridge, a stable coin platform, although mainly for treasury management and payouts rather than consumer payments. But we’re also beginning to see stable coins in the wild popping up on the checkout pages of legitimate merchants although it’s not clear whether there’s yet much volume. 

Criminals also like stable coins which accounted for 63% of illicit transactions in 2024, up from just 20% in 2020. Bitcoin, volatile and subject to high fees, is now only used for ransomware and darknet market sales, according to the FT. 

Meanwhile, El Salvador has dealt a blow to the fiction that Bitcoin would ever be used as money, having ended its experiment with using this cryptocurrency as legal tender. Despite incentives and coercion, the public weren’t much interested. Crypto enthusiasts don’t spend their coins, they keep them in expectation of investment gains. Crypto sceptics avoid them. Nobody uses them to buy stuff.

In other news

Can you make a business case from payment data? Probably not. Payments data is no goldmine explains Andrew Dresner. I agree. If there was a pot of money to be found, someone would have discovered it by now.

Redsys is a beast. The Spanish bank-owned processor and gateway reported 2024 numbers showing €505bn payment volume from 1.5m connected POS terminals. With these economies of scale, you can see why it’s hard to beat Redsys on price.

Hat tip to Euronet for getting this ATM to the top of a mountain.

Klarna’s CEO says AI has allowed his business to stop hiring entirely. He expects the workforce to fall from a high of 5,000 to just 2,000. If every large business does this, the global economy will certainly be in trouble.

Wirecard latest. The trial of Markus Braun, the former CEO, still hasn’t finished and prosecutors are looking at ways of shortening what is becoming a very expensive process. Meanwhile, Jan Marsalek, Wirecard’s former COO, ran a Bulgarian spy-ring in the UK. The spies have gone to gaol, but Marsalek is still at large in Russia.

And finally

Nothing moves quickly in payments. Britain went decimal in 1971 having been thinking about the move since 1828. This newsreel explains how the government managed the changeover.

Where to find me

I’ll be at MPE 24 in Berlin this week, at the Retail Technology Show in London on 2/3 April and Money 20/20 in Amsterdam on 3/5 June.

The Payments Business

Rapyd, the global acquirer/fintech is reported to be raising $300m at an unexpectedly low valuation of just $3.5bn. The additional capital will go towards an unspecified acquisition and comes soon after its $610m purchase of the least interesting parts of PayU. The new valuation is well below the $9bn set in 2021 and will make its slated IPO in 2026 harder to achieve. 

IPOs aren’t always a positive, especially if private equity funds are selling stock. Paysafe, the high-risk acquirer and pre-pay wallet provider, was originally listed on the London market but taken private by Blackstone/CVC for $4bn in 2017. These giants floated Paysafe in New York in 2020 at a market capitalisation of $8bn. Since then, the shares are down 80% (see chart) and management is now looking at divestments and/or selling the whole business to to another private equity fund. This sort of corporate ping pong enriches lawyer and bankers but does nothing for customers.

Checkout.com generated the wrong sort of headlines as fintech journalists focused on the poor financial results of one of its UK trading entities. Checkout comprises several businesses in different countries which often trade with each other and are ultimately wrapped up in an offshore holding company. There’s no way of telling how well it’s doing from the regulatory filings of one entity. 

Fighting back, Checkout put out a release claiming worldwide revenue grew 40% in 2024. And the business is profitable on “an adjusted EBITDA” basis which I was told means cashflow positive. Following the termination of its relationship with Binance and OnlyFans, crypto/adult traffic now represents less than 5% of Checkout’s sales.

Checkout claims 40 merchants processing over $1bn, well behind Stripe’s 100, but impressive nonetheless. These numbers are not audited but are consistent with feedback I’ve had from the market. Checkout is certainly winning business from the incumbents and competing head-to-head with Stripe and Adyen.

It’s good to see Worldpay spending money again after its wilderness years entombed within FIS. The deal to buy Ravelin Technology, the London-HQ’d fraud specialist, will give Worldpay something new to sell to its enterprise clients. 

Ravelin has top quality management and good technology but there really isn’t much money in fraud screening. Despite a stellar client list that includes Spotify and Deliveroo, Ravelin had only managed to achieve £15m annual revenues and may have needed refinancing soon. Merchants increasingly expect the service free of charge with their payment processing bundle. Meanwhile, Elavon (which recently signed with Ravelin) will likely need to find a new fraud vendor or risk Worldpay being able to view its customer list.

DNA Payments Group has made good progress with building a UK SME proposition from a series of acquisitions, notably from fast-growing revenue streams from acquiring and additional payment volume from new ISV partnerships. But 2023 accounts show significant losses continuing. Read more on the Business of Payments blog.

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The JP. Morgan vs Haris Karounis litigation, centring on a $2bn difference of opinion about the valuation of Viva, continues but has moved from London to Athens. The US banking giant is now claiming €916m damages from Viva’s founder following the creation of this troubled mPOS joint-venture. Both parties accuse the other of bad faith but it’s the lawyers that will likely win this one. For those interested in Regulation K of the Edge Act, 1919, the full UK judgement is now available.

In other banking news, Unicaja, the sixth largest in Spain with over 900 branches, has chosen Fiserv as its merchant payment partner. This is a good win for Fiserv and gives the American giant a bank partner in Spain for the first time.

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It’s been a busy month for fundraising news. Here are the highlights:

Flatpay, the fast growing Danish POS-focused payment facilitator, has raised a further €58m to support market expansion, taking total fundraising to €120m. Investors claim Flatpay is “the fastest growing Danish startup ever.” And there’s a new TV commercial in which Danes say “Flatpay” and “no brainer” to each other. 

Flatpay already has 150 people in its Berlin office with 50 more to be recruited this month and is actively hiring staff in Italy. The proposition is based on a PAX A920. There’s a simple price plan although the flat rate of 1.49% in Italy isn’t particularly competitive. Shift4 is the acquirer/processor.

Flatpay isn’t the only new entrant to Italy. Dojo has opened an office and Qomodo, based in Milan, has raised €13.5m (€48m in total) to build out its POS payments solution for high ticket SMEs such as dentists and vets. Qomodo claims 2.500 merchants are using its PAX A920 Pro, of which 20% take an in-house BNPL product. Transactions are keenly priced at 0.95% for international cards and 0.49% for Bancomat.

Dublin-based Nomupay which was formed out of the ashes of Wirecard’s SE Europe and Asia businesses, has raised $37m at $200m valuation bringing the total capital received to $90m. Management says Nomupay will be profitable this year on $20m recurring revenue from 1,600 merchants. The new money will go on M&A.

Zurich-based Tiun.io, has raised €2.5m for a clever pre-pay micropayment solution for online publishers. 50 titles are already on board. Consumers link Apple Pay, PayPal etc to the wallet and set maximum monthly spend limits per publication. Tiun solves a genuine problem for the media industry and should do well.

Berlin-based Nevermined has raised $4m to develop payment products for AI agents to pay other AI agents. If the future of business is going for lunch while our bots sort out the details, I can’t wait.

In regulatory news, BAFIN, the German regulator, has turned up the pressure on PayOne. Worldline’s joint venture with the local savings banks has previously been accused of lax money laundering controls and will now host a “special representative” sent by the regulator to oversee improvements in its onboarding processes.

Scheming

2024 ended with yet another storming quarter for the American schemes in Europe. Combined Visa and Mastercard payment volume rose 15% to €1.325bn with Mastercard (benefiting from winning the Unicredit portfolio) again marginally outperforming its arch-rival.

Both Visa and Mastercard have finally begun promoting Click to Pay, a digital wallet viewed as their competitor to PayPal and Apple Pay. So far, Click to Pay has failed to excite the industry but Mastercard has launched a clever marketing campaign. It’s based on problems faced by people living in towns with long names when shopping online. No prizes for guessing which Welsh village features prominently.

It would be wrong to write off Click to Pay too soon. JustEat’s product manager posted on LinkedIn that 10% of its manual card entry traffic in the UK opted for Click to Pay, delivering 3ppt increase in conversion.

Away from the major schemes, Discover’s global network, built at considerable expense, is going nowhere. Worldwide transaction payment volume from its 25 alliance partners, such as RuPay and SIBS, was down 30% in Q4. It’s time for a rethink. Capital One, which is in the process of acquiring Discover, has the chance to make something of this underused gem which offers acceptance at millions of stores and websites around the world.

MPE Conference

We’re rapidly approaching the MPE Conference, Europe’s leading event for merchant payments which is held in Berlin on 18-20 March. There’s a comprehensive conference programme, exhibition and lots of networking. MPE is a place to do deals. It’s a friendly event and delegates are more likely to take a meeting than at many conferences. Readers of Business of Payments get a 10% discount by using the code mpe-10off at the checkout. Book here.

ISV

Small businesses are increasingly buying payment processing as a bundle with their software. Acquirers/PSPs need to either partner with the software vendors (ISVs) or start commercialising their own business software. I discussed the latest trends with Charlotte Al-Usta from Flagship Consulting on this MPE podcast. Click on the picture for the video version or listen to the podcast here.

Shift4 sells its own software called Skytab, counts one third of US restaurants as customers and has just launched in the UK, bundled with a payment terminal and processing contract. The UK is a crowded market for hospitality software, but Shift4 will be hoping its supersized American-style sales commissions will turbocharge growth. Its network of self-employed agents can expect to earn up to twice what competitors such as Dojo and Global Payments are paying. The Shift4 team tell me that Germany is next on their list.

MyPOS is also moving into proprietary software, having bought Toporder. This Lyon-based ePOS vendor serves 700 small speciality food outlets such as bakeries with its iPad application. This is the first significant move by MyPOS since it was acquired by Advent, a giant private equity group, last year.

Less ambitiously, Worldline will be reselling WIX webshops to its SME customers in Europe and Australia. WIX already claims over 200m merchants and over $1.5bn annual revenues so it’s not clear what Worldline will add to the proposition.

ISVs can be demanding partners for payment processors. They need their merchants onboarded swiftly with no hidden surprises, flawless customer service and transparent pricing. A growing band of start-ups are looking to supply the specialist payment infrastructure that helps ISVs and PSPs to work together.

For example, Unipaas, founded by the former Safecharge management team and based in London, offers payment facilitation as a service to eCommerce ISVs. Management claims 20 ISVs connecting to 75,000 merchants. Nuvei and JPM are the acquirers.

Investors are alive to the need for ISVs to have a strong payment offer. Nelly, a Berlin based software business focused on management of healthcare practices, just raised €50m. It offers integrated payment processing via Adyen. Terminals are free and POS transactions are charged at just 0.99%.

New shopping

The latest generation of autonomous stores no longer require shoppers to use apps or online payments. This is good news for vendors of conventional payment terminals and monoline card processing.

The world’s largest autonomous store, covering 1,200 square metres and 10,000 products, has opened in Portugal. With technology from Lisbon-based Sensi, customers of the Continente Bom Dia supermarket in Leira don’t need to check in or download an app. They simply fill their baskets, confirm their purchase total and pay on a standard card terminal at the exit. It’s a remarkable technical achievement which brings together 1,676 cameras and 2,000 scales. The promotional video is cool. This really could be the future of grocery.

Portugal is a hotbed of new shopping technology. Rekon.ai, based in Porto, has announced a partnership with IKEA for an autonomous microstore in London. In these implementations, shoppers scan their credit or debit card at the entrance and are automatically billed when they exit the shop.

Analysts suggest that 2025 could be the year of the smartcart, an interesting compromise between self-checkout machines and fully autonomous stores.

A2Z, based in Israel and one of the leading vendors, has secured orders for 30,000 carts from Casino, the French supermarket and has high hopes for a massive deal from Carrefour. Analysts estimate the monthly subscription cost of a smart cart at $150which they say is “peanuts” compared to the potential revenue from selling advertising on the smartcart’s integral screen. This may be true, but supermarkets are ferocious negotiators and unlikely to let a tech vendor see much of this upside.

Turning to biometrics, PayEye, a Polish start-up, is using iris scanning to combine automatic payments with age verification. The first customer is a five star hotel. PayEye, which is working on the project alongside Mastercard, reports 60% of triallistswould use the service if offered elsewhere.

JP Morgan showcased two new biometric payment devices at the NRF Show in New York. The Paypad and PINpad both include face and palm recognition. You can see more in the video.

SoftPOS

SoftPOS is going mainstream. Volumes are growing rapidly and enterprise implementations coming thick and fast.

DPD Poland has completed an 11.000 device roll-out of SoftPOS. The payment application sits on the courier’s Zebra handheld terminals and is used to take cash-on-delivery. There’s no need for a separate payment terminal. Planet Pay (no relation of Planet Payment) is behind the solution.

Worldline has announced a similar project in France with GPX Logistics while claims the Spanish postal service has 20,000 devices using its SoftPOS application today.

Despite almost doubling sales in 2024 to €1.9m, Munich-based Rubean is not growing as quickly as investors had hoped and the stock price is down 31% over the last 12 months. However, Rubean is steadily winning new customers such as Deichmann, the German shoe retailer and management has raised an extra €0.9m for expansion into Latin America and the US.

A small group of vendors has begun providing in-store payment acceptance to ISVs using SoftPOS to combine ECR and payment terminal in a single device.

• SoftPay, the Copenhagen based SoftPOS vendor, is running its app on an iMin Swift 2 Android tablet integrated to Winsolution software at this Oslo barber. The device looks and feels like a conventional payment terminal but is much cheaper and more flexible.
• StringIQ offers SoftPOS based payment acceptance as a service to ISVs. It claims 6,300 merchant sites live across Europe. StringIQ works as an ISO for Rapyd and Cashflows.
• Amsterdam-based Klearly is focused on providing hospitality ISVs what they need to offer payment acceptance to their merchant customers. Klearly, which says 4,000 merchants use its SoftPOS application just raised €6m to expand to new European markets.

Mastercard is testing a further use case of SoftPOS that would enable shoppers to make eCommerce transactions by tapping a payment card on their own phone. This idea has been around for a while but, so far, has been viewed as a solution looking for a problem. Mastercard’s pilot will allow diners to pay at table by tapping their payment card on bills generated via a Hong Kong restaurant booking app.

Finally, it’s farewell to Phos. One of the SoftPOS pioneers, the London-based vendor was bought by Ingenico in 2023 and is now renamed Ingenico SoftPOS. Ingenico says the new identity “embodies our commitment to innovation and our vision for the future of payments.” 

Openbanking

Let’s start with the good news.

A total of 224m open banking payments were made in 2024, 74% higher than the previous year. This includes 3.6m British people paying His Majesty’s Revenue and Customs a total of £12bn to settle their tax bills, up 36%. 

Despite the robust growth, open banking accounts for a tiny fraction of the 48bn consumer payments made annually so there’s plenty of upside here. The problem facing the payment industry is that there’s no prospect of volumes rising quickly enough to cover their fixed costs. Jeremy Light has done the maths and believes open banking offers “slim pickings today” with transaction fees typically just £0.2/€0.25. 

If that weren’t enough, Martin “money saving expert” Lewis, who regularly tops polls as Britain’s most trusted man, has warned against using open banking for “big important transactions.”

Lack of consumer protection is the problem, not just from bankrupt airlines but also from scammers. As bank transfers move from considered purchase to reflex action, there’s more opportunity to trick people into sending money to criminals. For example, days after beginning to accept Venmo (a US A2A standard), fraudsters began to “deceive and defraud” Jet Blue customers.

Banks, already worried about their increased liability for fraudulent A2A transactions, risk setting open banking fraud controls so high that they reject many good transactions. The CMO of VibePay, an open banking vendor, shared his frustration at Lloyds Bank continually blocking A2A as suspected fraud. If an individual’s first open banking payment doesn’t go through, it’s going to be hard to persuade them to try again.

In vendor news, Tarabut, a leading Saudi open banking vendor, acquired London-based Vyne for its technology platform and is already closing down Vyne’s UK operations. The business did have some decent customers, including Marks Electrical, but revenues were likely to be less than £1m and Vyne had lost a total of £13m by March 2024. 

Saudi Arabia is fast becoming a very interesting market for open banking as you can read in this excellent analysis by Jas Shah. He concludes that Jeddah has imported the UK regulations and made them better.

Cash

The UK Government has rightly decided not to oblige businesses to accept cash. The decision is most appropriately left to business owners who are best placed to weigh the costs of cash acceptance against the extra trade it may bring. Meanwhile, cash usage does seem to have grown a little, mainly due to worries about the high cost of living.

With politicians across Europe worrying about how to maintain access to cash, here’s a great idea from Switzerland. Sonect provides consumers with an app that turns store checkouts into a virtual ATM. It’s helpful for people who need cash and gives retailers some extra footfall. 2,300 sites are live in its home market and Sonect has expanded into Italy.

Crypto corner

Trump 2.0 has given full backing to crypto and is planning to roll back what limited regulations the Biden administration had imposed on the sector. There’s loads to worry about. Even established crypto tycoons are concerned that a return to the “wild west” will cause blow-ups that harm the legitimate parts of the industry. As Benedict Evans put it “combining borderless decentralised software with money” will only result in a further explosion of scams and bubbles.

Paul Krugman may be harsh in saying that crypto is for crime but it’s certainly best for gambling, not investing. Football fans are easy marks and could easily confuse trading crypto with sports betting in this commercial from Bitpanda, the new sponsor of Paris St Germain. What could possibly go wrong?

Readers of Business of Payments will be most interested in whether consumers will want to use crypto currencies to buy stuff in shops or from websites. I’m sceptical. If the price of Bitcoin only goes up, why spend it?

Nonetheless, luxury brands often do accept Bitcoin. As one put it, selling expensive handbags to crypto-millionaires can help them “diversify their asset portfolio”. Lyzi, based in Paris, is probably the leading vendor and claims 120K points of sales live with its crypto-acceptance solution including Printemps, the department store. Merchant pricing starts at a chunky 3% which would make many retailers think twice before adding a crypto button to their checkout pages.

There’s renewed investor interest in crypto-acceptance. London-based Helio Fintech, whose plug-in allows merchants to accept crypto and get paid in dollars, sold itself to MoonPay for $175m. That’s a punchy price for a business processing just $1.5bn volume from 6,000 merchants. Transactions start at 2%.

Turning to central bank digital currencies, the USA has ruled out setting up a digital dollar, leaving the field clear for the Eurozone and China. The ECB certainly believes a digital Euro is necessary to respond to the proliferation of dollar based stablecoins and help secure the continent’s strategic autonomy. The Bundesbank agrees and is hiring a 30-40 strong team to work on the project.

Michael Salmony has taken a thorough (and quite amusing) look at what the ECB needs to do to make a success of the digital euro. The first step is to agree what problem it’s trying to solve. The second is to align incentives – banks, consumers and merchants – so that all actors get value from the new currency.

In other news

Digital River, which acted as merchant of record for many SaaS vendors, has closed with the loss of over 100 jobs. The Irish arm of the business, which generated 31% of global revenues, is in liquidation with some clients “catastrophically impacted” by its sudden demise. Precipitous business failures are rarely completely unforeseeable. The Register reported on Digital River’s increasingly erratic behaviour last October.

Klarna’s CEO says a robot could do his job. “I am not necessarily super excited about this,” he explained. Meanwhile, The Dutch Parliament is considering banning BNPL at POS, warning that it can lead to vulnerable people accumulating too much debt. Klarna would be the primary loser.

Here’s an excellent roundup of the Polish payment landscape from Marcin Mazurek

A remarkable 13% of Americans admit to first-party fraud such as falsely claiming a delivery was stolen while one third of Brits say they have stolen from self-checkout machines.

Polish police took 860,000 motoring fines by card payment last year on portable terminals provided by eService (Global Payments).

Criminals used malware to intercept one-time passwords and send stolen card credentials to a smartphone operated by a mule stationed by an ATM. Police arrested “a suspiciously masked man withdrawing money from a cash machine in Prague for a long time.”

Activists in Iceland continue to target sports groups sponsored by Rapyd, the processor whose CEO has been vocal in support of the Israeli action in Gaza. The front door of the Icleandic Sports & Olympic Federation was covered in stickers reading “Rapyd supports Genocide”.

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And finally

Yay for cheques. Can your payment method do this? (Hat tip Scott Wessman)

Happy New Year everyone! 

2025 promises to be another exciting year in merchant payments. With open banking and mobile wallets threatening to challenge the card schemes and ISV’s vying with banks for distribution deals, there won’t be a dull moment. And that’s without Trump 2.0 and his techno friends setting fire to the crypto sector. 

Thanks for reading Business of Payments! Subscribe for free to receive new posts and support my work.

I began writing Business of Payments to produce the content I’d wanted to read when working in strategy roles for two of Europe’s largest merchant acquirers. It’s been wonderful to see subscribers growing to almost 3,000 individuals. I’d like to thank everyone who’s been in touch with news, gossip or cool new products to share. 

Here’s to a successful and prosperous 2025 for everyone working or investing in European merchants payments.

The Payments Business

With 200,000 merchants across Europe, myPOS is a rare beast in the fintech jungle – growing, profitable and debt free. Revenue was up 39% in 2023 to €84m. Advent, the private equity giant, paid a generous €500m for the business last year and will be looking to widen the product portfolio from payment acceptance to a broader set of financial tools for SMEs. More details on the Business of Payments blog.

Worldine’s JV with ANZ, Australia’s second largest bank, is going badly wrong. Worldline paid €307m for 51% of ANZ’s merchant acquiring unit in 2022 but is reported to be hoping to sell its stake back to the bank for less than half that figure. ANZ cites poor cultural fit, high staff turnover and excessive capital spending. For its part, Worldine called out the Australian misadventure as a contributor to missing its financial targets.

Santander is sticking to a target of 30% annual revenue growth at PagoNxt, its payment unit, although sales have been slowing during 2024. Total volume processed by Getnet, the merchant acquiring division, grew just 7% in Q3. More on the Business of Payments blog.

In corporate news, Shift4 has bought Card Industry Professionals (CIP), a small but well-regarded UK ISO for an undisclosed sum. CIP, which employs 20 full time staff and 150 field sales agents, claims a modest £60m/month of payment volume but provides a solid basis for Shift4 to expand its UK presence. This deal comes close on the heels of Global Payments buying CIP’s much larger local rival, takepayments, for $250m. 

Nuvei has acquired Payaut, a Dutch-HQ’d start-up that sells whitelabel marketplace payment solutions to PSPs that don’t have in-house capability. Although the purchase brings an important addition to Nuvei’s product portfolio, Payaut’s existing customers, especially Checkout.com, are unlikely to be happy about a key supplier passing into the hands a competitor.

EPOS Now, one of the larger ISV’s focused on small business POS, has bought Yoello, a mobile order and pay business. Yoello, based in Cardiff, had raised $10m but latest accounts indicate that meaningful revenues are some way off despite claims of 2m users. EPOS Now’s interest is most likely in Yoello’s payment institution licence which will give the ISV flexibility to develop its PF offer. EPOS Now is boldly describing itself as a “global leading AI-driven point-of-sale embedded finance platform”which may come as a surprise to customers who thought they were buying an ECR system.

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Although Fintech fundraising remains challenging, money is still available for the right combination of product and management. Here’s a roundup of the last deals:

• Cellpoint Digital, a London-based payment orchestrator focused on airlines, has raised $30m. This comes on top of $25m funding secured in 2022. Cellpoint hasn’t filed its 2023 accounts yet. In 2022, it made an operating loss of $19.4m on sales of $2.6m.
• Honei, based in Barcelona, has raised €1.45m for a QR pay-at-table solution for restaurants. Honei, which sits on top of Stripe’s APIs, has processed 1m transactions in two years.
• Torus, winner of last year’s innovation prize at the MPE conference, has raised an undisclosed amount. Based in Lithuania, Torus provides merchant acquirers with tools to correctly calculate scheme fees. It claims $1m revenues from ten customers already.
• Pi-xcels has raised $2.7m for its one-tap digital receipt product which is now available on PAX, Ingenico and Newland terminals.

• Norbr, based in Amsterdam, has raised €3m for its white-label payment infrastructure-as-a-service proposition to ISVs and PSP. Management says it’s on track to reach €10m revenues by 2027.
• JUST, based in Paris, has raised €8m for its checkout solution which integrates with Shopify, Prestahop and other leading eCommerce platforms. JUST claims 500 merchants and 1m user credentials on file. The funding will pay for market expansion including a launch in the UK.

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2023 was a good one for Poland’s payment industry according to the annual report released by Cashless Poland. Revenues of the top 100 companies grew 10% to €2.7bn. One of the fastest growing companies is PSP, the organisation behind Blik, the wildly successful mobile payment standard, which saw revenues up 50% to €74m.

Cashless, an industry-funded programme to widen card acceptance has been a great success. In its first five years of operation, over 685,000 POS terminals have been placed with 500.000 merchants. The scheme will now be extended to online merchants.

Scheming

The election of Trump 2.0 in Washington has accelerated political pressure to reduce Europe’s reliance on Visa and Mastercard. The ECB’s Piero Cipollone explained to the Committee on Economic and Monetary Affairs at the EU Parliament that people could only buy tickets to the Euro football tournament using American or Chinese means of payment.

Europe has many domestic schemes and mobile payment wallets which could form the basis for a continental response. The challenge is bringing them together with enough scale to challenge the global players.

Bancomat (Italy), Bizum (Spain) and MB Way (Portugal) have formed the European Payments Alliance which will provide interoperability between the three schemes. The members are looking for more national schemes to join the partnership.

One of these might be Bluecode, backed by four Austrian banks, which is an advocate of what it refers to as “payment roaming.” Bluecode is offering customers the chance to pay at any Discover enabled terminal with the transaction backed to an A2A transfer.

The CEO of the European Payments Initiative, promoters of wero, took to LinkedIn to explain why interoperability is a bad idea. She says EPI looked at this in detail before concluding that a better solution was to migrate national schemes to a single European one.

Figure 1 Photo: Nicola Breyer

Wero, which already incorporates iDEAL (Holland) and Paylib (France), announced its first eCommerce transaction and, to answer Mr Cipollone, this was made at the online store of FC Kaiserslautern. VR Payment and Atruvia (the IT service provider of the German co-operative banks) were behind the scenes. Discussing the advantages of accepting wero, the football club said “It is also European, which for a European Football Club is a key asset.”

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Vipps, Norway’s mobile wallet, is the first national scheme to make contactless transactions using Apple’s NFC chip. At first, the service works with card terminals that take BankAxept cards (the Norwegian domestic debit scheme) but will be available for Visa/Mastercard before the Summer. Vipps plans to launch the service in Denmark, Finland and Sweden in 2025.

The three banks that own Vipps – DNB, Sparebank and Eika – have steadfastly refused to allow their customers to link their debit and credit cards to Apple Pay. This should give Vipps NFC capability a boost as there will be plenty of pent-up demand.

Mobile wallets will not only be competing with Visa and Mastercard but also with card-based domestic debit schemes such as Giro in Germany. Giro is fighting back with a new marketing campaign featuring a series of short scenes in which merchants congratulate shoppers on using a low-cost card. “The most beautiful of all the cards, better use Giro,” it says.

Giro quotes a Bundesbank study showing a typical transaction cost of €0.67 for its debit card compared to €1.70 for a credit card or €1.80 for cash. In total, Giro claims German merchants save €2bn by taking its cards. Jochen Siegert did the maths and concludes the figure is closer to €200m.

Meanwhile, PaySys has published a very helpful analysis of German payment terminals that answers a perennial question: how many POS don’t take international cards (ICS)? The answer is fewer than you’d think. Of 1.412m active devices, just 110K accept Giro only. And 42K of these are vending machines.

Turning to the international schemes themselves, UK’s Payment System Regulator has finally determined that “a lack of competition allowed Mastercard and Visa to increase their cross-border Interchange fees to an unduly high level.” Interchange charged to British merchants for EEA cards rose after Brexit from 0.2% to 1.15% for debit and 0.3% to 1.5% for credit. As a result, the regulator concludes British merchants are unfairly charged £150-200m each year and proposes to restore the 0.2%/0.3% levels as before.

There was better news for Mastercard as it settled a £10bn class action suit in the UKfor just £200m. An extraordinary war of words then broke out between the solicitor representing the claimants and the American hedge fund that was paying for the litigation. The hedge fund thinks £200m is chicken feed and wants to hold out for more.

ISV

Software businesses are increasingly taking on the distribution role previously performed by banks and ISOs. ISV’s simply have much stronger merchant relationship than financial services companies ever will. Acquirers without strong ISV partnerships are going to struggle to onboard new SME customers and risk losing the ones they’ve got.

Here’s how strong relationships work in practice. Worldpay’s compliance team mistakenly deactivated the account of a large concert venue. The venue couldn’t sell tickets and was in real trouble. Worldpay’s client account manager was on annual leave and it took a few days before reactivating the customer. Meanwhile, the venue asked its ticketing software vendor for help and were immediately shifted to Adyen. Who owns the customer? The ISV does.

Hospitality software vendors are in particular demand for payment partnerships in 2025 because over half of restaurants are looking to replace or upgrade their POS software, The key drivers are “supporting omnichannel ordering” and “mobile ordering and payment integration.” Payment companies that can support these new use cases will be much in demand.

The growing interest in ISVs is sparking some serious research into this sector for the first time. An excellent report from PSE Consulting (working for Unipaas, a vendor of white label payment infrastructure) shows attachment rates of embedded payments at 70-90% compared to just 5%-15% with the old-fashioned referral model. PSE suggest acquirers should build in-house PayFacs to take advantage of the trend.

PSE Consulting also asks whether it’s time to retire the payment API. ISVs are reporting $1-3m spend needed to integrate with acquirers’ onboarding, reporting and support API’s and are complaining about the GDPR and other compliance requirements of the payment industry. Much better, say the consultants, to offer ISV’s the chance to white label the acquirer’s own tools.

Product

Stripe continues to churn out well researched product innovation, this month releasing an SDK that integrates its financial APIs into LLM (AI) workflows. There’s a long way to go but this could lead to a corporate travel bot that build itineraries, reserves travel and books tickets without any user intervention.

More tangibly, Stripe has launched a clever tool that allows merchants to A/B test different combinations of payment options. This should help settle arguments between retail marketers (who typically want to add every possible payment type to a checkout so as to maximise reach) and the finance team (who want to minimise the number of payment options to reduce administrative overheads).

If you sell online in the Netherlands, this well-researched deck from the Dutch Payment Association outlines the optimal payment page. Unsurprisingly, it suggests that iDEAL should always be at the top. Interestingly, 23% of Dutch shoppers say that having too many English words on websites makes checkout more difficult.

In its first product innovation since becoming an independent company once more, Worldpay is leveraging Mastercard Move and Visa Direct to offer instant refunds. HMV, the UK entertainment retailer, is named as the first client. A month after the announcement, there’s no sign of the product on the Worldpay website or any indication of pricing.

ABIMS, the largest acquirer in Ireland has begun selling eCommerce webshops“tailored for Irish SME’s” and provided by Dublin’s FCR Media. The price of €1900 set up + €76/month is eyewatering although merchants get a rebate of €750 if they process with ABIMS. There’s also a €9.75/month “PCI fee” charged to merchants for no obviously good reason.

Sticky, a UK start-up which uses NFC tags to transform any object into a point of sale, has deployed its technology at a restaurant attached to the Excel exhibition centre in London. The venue says it prefers NFC to QR codes for order-at-table because they are easier to keep looking nice and more secure.

Turning to wearables, PAGOPace, based in Cologne, is commercialising a range of payment devices including a bracelet and a ring that doubles a Tesla key. A payment bracelet sounds niche but might be handy if you wear gloves. Your Pago device links to any payment card stored in a Curve app. Fidesmo, from Stockholm, is supplying the payment infrastructure.

PAGOPace is also working with VNTR, the venturing arm of PostFinance, the retail banking division of the Swiss Post Office to test NFC chips glued to customers’ fingernails which link to the yellow Post Finance Mastercard debit card. This is even more niche than a payment bracelet.

Cashflows, a UK acquirer, is offering “programmatic payment technology.” Using capability from Raimac, a UK start-up, Cashflow’s merchants can offer shoppers the chance to specify their own flexible payment plans. It’s like a DIY BNPL solution but with AI.

In Softpos news, Elavon has stopped white labelling the SoftPOS.eu application following the Polish start-up’s acquisition by Worldline. Elavon is now working with PinAppAll, also based in Warsaw. Pricing is equivalent to €2.34 per month + 0.61% + 1.6c per transaction.

SoftPay, based on Copenhagen, has deployed its solution on Zebra CC600 Android tablets at branches of Coop supermarkets in Denmark. The tablets deliver self-checkout for the first time and are used by up to 60% of shoppers in some branches. Nets (Nexi) is the processor/acquirer.

Figure 2 SoftPay application on Zebra hardware

The Italian job

Installation of new gas pipes by a local authority in Switzerland accidentally brought down much of Italy’s consumer payment infrastructure on Black Friday. Construction workers cut connectivity from Worldline’s data centres in Lugano, leaving consumers unable to pay with cards, or use ATM machines. Nexi and Banncomat both send transactions to Visa and Mastercard via Worldine’s network and the incident raises questions about the country’s reliance on a single point of failure.

Banco BPM wrote to frustrated customers blaming both Nexi and Worldline for the outage but pointing out that its latest products (which use Numia) were unaffected. Revolut Italy issued a statement saying that it ran its services in-house and had no reliance on 3^rd parties.

Open banking

The industry took heart from the publication of the UK’s National Payments Visionwhich discusses “unlocking account-to-account payments for e-commerce” while recognising that POS use cases are a long way off. Positively, the Government is eating its own dog food and boasts of having received 10m tax payments worth £33bn through open banking already.

Given the alphabet soup of regulators with fingers in the open banking pie, it’s helpful that the Vision clarified that the Financial Conduct Authority (FCA) not the Payment Systems Regulator (PSR) is responsible for regulation. The logic is that although open banking is payments, it is not a system. I hope that’s clear.

Whatever the regulatory outlook, the open banking customer experience needs work. Ryan Air is using Truelayer’s solution but as you can see from these screen-grabs, the payment flow is slow and clunky.

Some savvy innovators are looking to smooth the payment flow by investing new open banking checkouts. For example, Volume, based in London, just raised $6m for its one-click open banking checkout product built on Modulr & Yapily technology. The money will fund a payment institution licence and international expansion.

In financial news, Trustly, the largest A2A player in Europe, reported net revenue down 5% at €100m as management continued to clear up compliance problems that had led to a stiff fine from the Swedish regulator. .

It looks increasingly difficult to make money with open banking, even for the best regarded vendors. Yapily, based in London, saw revenues almost double to £5.05m in 2023 while operating losses were cut to “just” £11.4m. Employee numbers fell from 158 to 117.

Cash

Political pressure is growing in many countries to maintain both access to cash and the ability to use cash in shops.

Yet consumers are voting against cash with their wallets. Latest figures from UK Finance show cash transactions falling by 7% in 2023 and a 3% decline in ATM withdrawals. 22m citizens rarely use cash.

There are many legitimate reasons to retain cash such as resilience, charitable donations and supporting victims of domestic abuse. But it’s also the preferred payment method of business owners that don’t want to pay tax.

A Dublin taxi driver once explained to me at length how he kept two set of books – one for cash payments and the other for electronic payments. He told me how many sets of tyres should be booked against each one to allay suspicions at the tax office. 

I was very pleased to learn that the last Dublin taxi driver still holding out against cash free payments has given in. Faced with losing his licence after 42 years, the driver agreed to carry a SumUp device.

As cash usage declines, the cost of cash acceptance rises to the point it quickly becomes uneconomic. Pay Association Netherlands estimates the cost to merchants of a cash transaction has risen from 29c to 61c since 2017 while debit PIN payments have remained at 17c.

Figure 3 Betaalvereniging Nederland

Crypto corner

2025 will certainly be the year of crypto. The industry has bought the incoming US government which plans to appoint Howard Lutnick, Tether’s point man in Washington, as Commerce Secretary.

Tether, a stable coin described by the Financial Times as “the criminal’s go-to cryptocurrency” and the favoured sanction-busting payment instrument of Iranianshas sold $129bn of its tokens. The money received is said to be held in US Treasury bills but Tether has never been audited. What could possibly go wrong?

The VC’s are delighted by the likes mood change on Capitol Hill. Andreesson Horowitz, whose founder backed the Trump campaign, published its latest state of crypto report. The authors believe that stablecoins “have found product-market fit” by enabling fast, cheap global payments. Yet the CEO of Wise, which knows a thing or two about digital remittances, remains a sceptic as you can read from a recent analyst call.

There’s an open question about how payment companies will make money from stablecoins. If the price of international money transfers really falls to pennies, then where is the margin? It seems many are hoping to profit from selling stablecoins and lending the float to other crypto businesses. This sounds a lot like banking although without the regulatory oversight. 

Here’s an advert from Bleap, a crypto platform which raised money last month. What could possibly go wrong?

In other news

Bluesnap, the Boston-HQ’d payment orchestrator, was fined €466,000 by the Central Bank of Ireland for mixing its own funds with those of its clients. In better news, the Italian regulator has allowed Lemonway, the French-based market place payment service, to begin onboarding new customers again.

Revolut is reported to be blocking DCC on its cards. Other issuers, annoyed at losing out on FX commission to the merchants and merchant acquirers may follow suit.

Donald Trump has hired the most successful CEO’s in the US payment industry for top jobs in the new administration. It’s easy to see the value Frank Bisignano, responsible for dragging Fiserv into the 21^st century, could bring to running the social security administration. Jared Isaacman, the Shift4 CEO picked to run NASA has no scientific or engineering background but did pay Elon Musk $200m for a trip to space and back. 

Wirecard update. A British court heard that Jan Marsalek, former COO of Wirecard and thought to be on the run in Russia, was a Moscow agent that recruited a group of Bulgarians to spy in the UK.

One way for merchants to avoid high fees is to pass them onto consumers in the form of surcharges. I was in New Zealand recently and was regularly charged an extra 2% if I paid with Apple Pay. I posted about this on LinkedIn and generated 165 comments from payment folk across the globe.

If you read one deck, read Ben Evans on “AI eats the world.” You will sound much cleverer afterwards even if the conclusion remains that nobody knows what’s going to happen next.

And finally

An Australian journalist inadvertently spent £55,000 on a pint of beer in a British pub. It’s cautionary tale of why you should never use a debit card for anything other than an ATM withdrawal.

Where to find me

I’ll be moderating a couple of sessions at MPE 25 in Berlin 18 -20 March and at the ePay Summit in London 21 May. Come and say hello.

Here’s a discount offer from the organisers if you register for MPE right now.

Get in touch

Geoffrey Barraclough

geoff@barracloughandco.com

www.businessofpayments.com