Barclaycard, the UK’s second largest merchant acquirer, reported disappointing growth in payment volumes in Q2 2022, an increase of just 4% to £77.3bn. This is well below the consumer price inflation rate of 10% in the UK and indicates Barclays is losing market share. Customer numbers also grew 4% to 401.000.
Barclays has a strong track record at cross-selling acquiring to its UK business banking customers. However, it has found going tough recently as fintechs with newer technology – notably Adyen and Checkout – are poaching its enterprise clients. A good example is Checkout’s work with Sainsburys.
Reuters reported last month that Barclays had hired consultants to look at options for Barclaycard, its payment business which includes card issuing and acquiring. The mandate was to examine “whether some of the payments businesses should be expanded or combined with other providers through a merger or joint venture.”
With a strong position in Europe’s largest card market, Barclaycard’s merchant operations would be very attractive to outside investors. Options could include selling all or part of the business to to private equity (with Bain/Advent likely first in the queue) or creating a JV with one of the global acquirers such as Worldine, Nexi or Fiserv.
Barclays released no additional information with the Q2 results.