Tag: SoftPOS

Newsletter – July 2025

Geoffrey BarracloughLeave a comment

The payments business

Worldline’s management responded to last month’s fraud allegations concerning its German business by commissioning two independent reviews. One will assess the remaining high-risk portfolio “to confirm its clean-up,” while the other, led by Oliver Wyman, will deliver a “comprehensive assessment” of Worldline’s compliance and risk framework. Initial findings are expected within weeks.

Meanwhile, the bad news for Worldline continues. Belgian prosecutors have launched a money laundering probe, top shareholder SIX is reportedly facing a further $300m loss on its holdings and the ANZ Bank JV in Australia posted grim 2024 results.Worldline Australia made AUD 68m (€42m) operating loss on revenues down 33% to AUD 81m (€49m). The business now needs more capital.

Despite a plunging share price and market cap now under €1bn, analysts aren’t calling Worldline a buy. The bonds are trading at less than 90 cents to the dollar. Rebuilding investor trust will require time, stable results and no more nasty surprises.

A graph of a company report AI-generated content may be incorrect.

GTCR, the private equity firm selling Worldpay to Global Payments, recently explained how it turned the business around in just 18 months, making $6bn in the process. “Worldpay had the potential to win. It had just lost a bit of its competitive spirit,” said GTCR’s CEO.

Not so fast. The deal has hit turbulence. Activist investor Elliott has taken a stake in Global Payments though its intentions remain unclear. Some speculate it may try to install a new board of directors. Meanwhile, UK competition authorities are circling, as the combined companies would control over 40% of the acquiring market.

GTCR might want to hold off booking that profit just yet.

JP Morgan paid $800m for 48.5% of Greek fintech Viva Wallet in 2022 and announced a 50-person “payments innovation lab” in Athens. But the deal quickly soured and is now tied up in litigation in both Athens and London. In the latest twist, both sides are claiming victory. Despite the uncertainty, Viva seems to be doing well in the marketplace and has started calling itself the First Fintech Bank in Europe. 

No alternative text description for this image

Figure 1 Photo credit Viva.com

Viva is part of a fast-growing group of well-funded, POS-focused European payment start-ups including SumUp, Flatpay, myPOS World and Dojo – some acquirers, some payment facilitators (PF). Let’s call them the Tap Pack.

Dojo, a London-based acquirer, just raised $190m and is growing rapidly in Spain. From offices in Barcelona and Madrid, it’s hiring 100 new sales consultants on a four-hour workday. Hasta mañana.

SumUp, the Anglo-German PF that reported €1bn revenue and a maiden operating profit in 2024, has postponed its IPO to 2026. Valued at €8bn in its last funding round, analysts doubt that figure will hold in today’s market.

SumUp has also agreed, at long last to support Girocard payments. The move responds to two issues: Mastercard’s phase out of Maestro, and the German savings banks’ launch of S-Cube, a SumUp rival with Girocard bundled in.

Flatpay says it will sign 5,000 new merchants this month, boosted by its French expansion which claims 40 staff and 1,000 merchants already. Pricing is very keen – a free PAX A920 and all transactions at just 1.29%. The Danish PF is entering the UK next with the radical innovation of recruiting an in-house sales team in place of the usual network of self-employed agents.

The Tap Pack have been gaining ground at the expense of incumbents like Worldline and Barclaycard. But they now face pressure from a new wave of capital-light, unregulated startups offering a slick user experience on Adyen’s rails. Examples include Yetipay, Kody, and MyPOS Connect (not to be confused with MyPOS World).

London-based Yetipay just raised £3.5m in debt and equity for its hospitality payments platform. It claims to process £500m annually and generate £5m in revenue. The Adyen integration has enabled fast expansion into Spain and Italy. Here’s a photo of founder Oliver Pugh with what the press release questionably describes as a pink yeti.

No alternative text description for this image

Turning to SoftPOS, Rubean, listed on the Munich Stock Exchange, is finally seeing real growth. First-half 2025 revenues jumped to €2.54m, up from €0.84m a year earlier. Analysts expect full-year sales to double, and the stock has surged 35% to an all-time high of €8.75.

A graph showing a line AI-generated content may be incorrect.

Rubean’s key selling points include Girocard support and integration with Redsys in Spain. Deichmann, the German shoe retailer, uses Rubean’s technology on Zebra handhelds into payment terminals. It’s a great example how SoftPOS can be transformational for enterprise retail.

In fundraising news:

  • Modern World Business Solutions (UK) raised £9m to scale from 60 to 200 staff. MWBS offers a white-label ISO-as-a-service platform and a comparison tool for SMEs seeking better payment deals.
  • Ontik, a London-based startup automating cash collection for the building trades, raised $3.7m. Payments are processed via Stripe or Yapily for open banking.
  • Paddle, the merchant-of-record platform for SaaS vendors, shrugged off a recent $5m US regulatory fine with a $25m debt raise. Its 2023 accounts showed a £46m operating loss on £57m revenue.Germany’s savings banks remain rare incumbent winners. S-Payment, their merchant services arm, grew revenue 13% to €292m in 2024, with mobile payments (Apple/Google Pay at POS) especially strong. Girocard transactions rose 12%, double the national average. And no red flags were raised in PayOne, the group’s JV with Worldline—which will reassure its beleaguered shareholders.
Bar graph illustrating S-payment sales revenue in millions of euros for the years 2022, 2023, and 2024.

Scheming

Visa and Mastercard are facing mounting legal pressure in Europe. In a landmark UK ruling, a court found that commercial and inter-regional interchange fees breach competition law. Crucially, the court ruled interchange is anti-competitive “by object” – a first which could trigger a wave of merchant damages claims. Both networks plan to appeal.

In Switzerland, major retailers are seeking damages over “unlawfully charged fees,”arguing boldly that card payments should be free. Meanwhile, the Swiss Retail Federation has referred Twint, a mobile payment solution owned by the domestic banks, to regulators, claiming its merchant fees are even higher than credit cards.

Visa and Mastercard justify their fees by highlighting innovations such as tokenisation, now covering nearly half of Mastercard’s European transactions and Click to Pay, their long-delayed answer to PayPal. This is finally getting some serious marketing dollars although these don’t seem to have reached Poland. 

With European payment sovereignty high on the political agenda, much depends on wero, the wallet backed by the European Payments Initiative (EPI). According to Finanz-Szene, EPI has raised an impressive €450m from shareholders including Worldline and Nexi. To succeed wero needs wide distribution through mobile banking apps and broad acceptance from merchants.

The distribution side is going well with five new Belgian banks added and Austria reportedly in talks. Wero claims 42 million users across Belgium, France, and Germany and processed €5bn in P2P volume in its first three months. eCommerce support is due this year, with in-store payments in 2026.

iDEAL, the Dutch online payment method set to be folded into Wero in 2026, grew merchant volume 13% to €100bn in 2024. while overall debit card spend rose just 3%. 

Wero hopes to link with Europe’s domestic mobile wallets, including Blik (Poland), Bancomat (Italy), Bizum (Spain), Vipps (Norway), IRIS (Greece), and MB Way (Portugal). Greece’s IRIS is likely to gain momentum thanks to a new law mandating acceptance both online and in-store.

Blik continues to dominate in Poland, reaching 70% share of eCommerce in Q1. Online volume rose 31% to €12bn. Backed by Mastercard, Blik’s bank shareholders are eyeing cross-border growth. The CEO of PKO BP has urged Central European players like Raiffeisen, UniCredit, and Intesa Sanpaolo to join the Blik consortium.

ISV

The convergence of software and payments, pioneered in the USA, is now accelerating across Europe. A new report from Flagship Consulting highlights the extent to which PSPs are acquiring European software firms to gain distribution in key verticals like restaurants and retail. Let me know if you spot any they’ve missed.

Slide2-Jun-17-2025-12-16-02-9256-PM

American software vendors realised years ago they could double their margins by integrating payments. As Jim Roddy from the Retail Solution Providers Association puts it: “ISVs are the new ISOs. “I visited an RSPA member once, and the CEO didn’t show me new software. He shut the door, plugged in a TV, and pulled up a spreadsheet showing how much he made monthly from payments. The numbers were huge.”

Not all customers are thrilled. American restaurateurs are increasingly frustrated at being locked into inflexible, expensive payment setups bundled with their POS software. While competition authorities haven’t stepped in yet, scrutiny may not be far off, especially if merchants are barred from choosing their processor.

Acquirers hoping to partner with ISVs need to fully embed their offer within the software vendor’s customer proposition. That means API-based onboarding, access to management info, smooth customer service, transparent pricing, and generous commissions for the software partner.

Where does it go wrong? A Dutch restaurant shared on LinkedIn its experience of switching from Worldline to Viva. Integrating Viva’s terminals with its Odoo ECR software took less than two minutes. Worldline supports Odoo too but only via a special IoT box costing €35/month. The restaurant chose Viva despite higher transaction fees, citing better support and a simpler setup. 

Agentic shopping

The public is starting to use ChatGPT and other AI tools for search, and it’s not just Google that should be worried. OpenAI, ChatGPT’s parent company, wants a cut of online purchases made via its platform, posing a margin threat to merchants and commerce platforms alike.

ChatGPT’s prototype shopping agent is slow and error-prone today, but it’s easy to see how it could soon become ubiquitous and render traditional eCommerce websites obsolete. If the AI already knows your shipping and payment info, what’s the point of a checkout page? Simon Taylor explores the implications. Startups like Ogment are already offering tools for merchants to adopt.

Shopify, the world’s leading eCommerce platform, is pushing back, posting a robots.txt file that directs agent developers to its official checkout SDK. Amazon is doing the same. As this LinkedIn discussion shows, Shopify’s move may upset tech purists but will please merchants already overwhelmed by bot traffic.

text

It’s still early days, and AI can’t yet be trusted. In one test, an AI managing an office vending machine lost money by over-discounting snacks and inexplicably stocking unsellable metal cubes.

New shopping

Walmart removed self-checkout from one store and saw police calls fall 50%, suggesting the public is increasingly non-compliant with “honesty-based” retail. That puts new pressure on AI to deliver smarter automation. Here’s a good roundup on autonomous stores.

Despite Amazon’s recent U-turn, checkout-free tech is gaining traction in high-traffic locations like stadiums. In Europe, we’re seeing rollouts in small grocery formats. Coca-Cola HBC plans 15 checkout-free stores in Hungary using low-cost Chinese AI from Cloudpick, integrated by Kende Retail and with payments by myPOS. This price is said to be just €40,000 for each shop.

Old fashioned vending is also rising as a payments channel. This 72-lane Boxbar drink dispenser in Manchester uses Adyen, Global Payments, and Viva for processing.

Having failed to commercialise virtual reality, Meta is now focusing on augmented reality via glasses and recently acquired a 3% stake in EssilorLuxottica, makers of Ray-Ban. It looks less ridiculous than a VR headset and you can imagine the power of AI seeing what you’re seeing and whispering helpful advice in your ear. Or maybe not. Matt Jones explains what it means for payments.

In Hong Kong, Alipay has launched smart glasses that let users pay by looking at a QR code and speaking the amount out loud. Rokid powers the app. Meizu has a similar product, with a dash of dystopia. People using these glasses don’t make eye contact and it’s very disconcerting as you can see from the video.

Product

Here’s a novel but quite risky idea. Better, based in Tel Aviv, is offering to step in to honour transactions where the card is declined due to insufficient funds. This start-up will “save the sale” by settling the merchant (less 10-15% commission) and waiting until after pay-day to put the transaction through. Better says it has already run a proof of concept with PayU. Similar products are available including Bounce.

App Store vendors can now bypass Apple’s 30% commission by using third-party payment processors. Stripe, much better value at 2.9% + 30c, has published a how-to guide. Apple, unsurprisingly, has responded by placing consumer warnings to scare consumers away from alternative payment options.

Many subscription payment providers are struggling to keep up with the move by software vendors away from per seat or tiered pricing to models focused on how much data you crunch. Stripe reports that this “usage-based” billing  is up 145% year to date.

Payments and loyalty

Rewe, the German supermarket giant with 3,800 stores, has launched Rewe Pay, a QR code wallet built by its in-house processor, Paymenttools. Setup is a bit clunky: shoppers register their Girocard, then complete a SEPA direct debit mandate via the app and sign their name on an in-store tablet. After that, payments are easy, made by scanning a QR code at checkout.

Commentators see Rewe Pay as a response to rising processing costs, especially as shoppers increasingly use Apple Pay linked to Visa and Mastercard, but the automatic incorporation of Rewe Bonus points on all purchases is equally interesting.

In a controlled, single-merchant environment like Rewe, the model should work. But I’ve long been sceptical of open-loop, card-linked loyalty. That idea has been around for years but has stumbled on technical barriers, unreliable merchant category code (MCC) data, and the difficulty of building profitable loyalty economics. Plus, card-linking offers benefits after the transaction, not before, making it hard for merchants to recognise high-value customers at the point of sale.

There’s no shortage of casualties:

Still, some players show promise. Krowd, a Techstars-backed London startup focused on restaurants, powers Amex Dining Rewards, has launched with Revolut and has its international expansion backed by Mastercard.

Paylead, based in Bordeaux, takes a bank-centric model, linking consumer ccounts to retail deals at the largest merchants such as Auchan and Decathlon. Paylead raised $6m in 2020. And Loyyo (Netherlands) replaces stamp cards with payment-linked rewards, is available via Adyen and CCV also recently secured new funding.

Fraud update

Chargebacks continue to rise. Ethoca projects global dispute volumes will hit 324 million by 2028, driven mainly by post-sale issues like slow refunds, unclear billing, and delivery friction, rather than outright fraud. The real pain is operational which has pushed merchants to look beyond traditional fraud tools. Visa’s Rapid Dispute Resolution (RDR) is gaining traction and is claimed to cut chargebacks by 20–30% for participating merchants.

A graph showing the number of charges AI-generated content may be incorrect.

So much for the carrot, here’s the stick. Visa’s updated Acquirer Monitoring Program(VAMP) is raising the stakes. Acquirers now face stricter thresholds, tighter enforcement, and the risk of fines, or even losing their membership if chargeback rates across their merchant portfolios climb too high. TrustPay (not to be confused with Trust Payments) has a solid explainer on the changes.

VAMP and Mastercard’s counterpart, the Excessive Fraud Merchant (EFM) programme, put pressure on acquirers and PSPs to take a more proactive role in policing their portfolios. In recent weeks, both Worldline and Paddle have shown the consequences of inattention. But for merchants, the message is equally clear: chargebacks are no longer just a cost of doing business, they’re a serious reputational and commercial risk that could jeopardise access to processing altogether

Car Commerce

The global auto industry is scrambling for new revenue and wants to pivot to a service-led model where drivers pay for parking, charging, or fuel directly through the vehicle’s OS. Naturally, the car brands want a cut. That’s why many are now resisting Apple’s “CarPlay Ultra”, which sidelines in-car payment systems. The problem? Motorists prefer to dock their phones and control everything from there. Top Gear takes a detailed look in this video.

Jas Shah offers a solid overview of today’s fragmented mobility market. For example, the UK alone has over 30 different parking apps, and that’s before you factor in EV charging.

Under pressure from government, the UK industry has agreed to roll out a National Parking Platform which allows any participating app to work across all publicly owned car parks. It’s already live at 476 locations, handling 550,000 transactions a month. There’s not that much money in parking payments. I calculate the three leaders in the UK market – Ringo, JustPark and Paybyphone – generate annual sales of c.£60m between them.

Open banking

UK open banking payments have stalled, with volumes flat at around 28 million transactions per month since early 2025. This reinforces the urgent need for a proper open banking scheme—with an acceptance mark, rulebook, consumer protection, and a business model that gives banks a reason to maintain high-quality APIs.

Bar graph showing UK Open Banking Payments in millions, with total payments represented in green bars and annual changes in blue line across months from June 2024 to June 2025.

TrueLayer underscored the slow pace of adoption across Europe with new figures from France and Germany Despite claiming a 60% market share in France, it processes just €2bn annually; in Germany, it holds 30% with €1.4bn in volume. Nobody is getting rich soon. A new Stripe partnership may help, but patchy bank APIs continue to limit growth.

Meanwhile, Trustly appears to be the only open banking player making real money. In 2024, volumes rose 54% to $85bn, and net revenue grew 32% to $239m. “Adjusted”EBITDA was up 50% to $73m. Business remains strong in North America and Europe, where Trustly retained its UK Government tax contract. Note: these results come from a press release, not audited accounts.

Trustly’s profit engine is widely believed to be US gaming, so others are following. London-based Yaspa, which offers open banking payments with integrated KYC, has raised $12m to target US iGaming, through a new office in Atlanta.

In a completely different vertical, Bumper, a UK car finance company, has acquired Cocoon, an open banking payment vendor which says its product is used by 20% of car dealers. 

Stable coins

There’s been an explosion of commentary on stablecoins following the approval of Trump’s Genius Act, which for the first time sets out a regulatory framework. Jason Mikula has the details. Genius has triggered a rush among banks, fintechs and retailers to launch their own digital dollars which will be backed 1:1 by US Treasuries, although, unlike dollars in a bank account, there is no deposit insurance.

Why would businesses want in? For one, they keep the interest on Treasury bonds. And for retailers, stablecoin wallets could cut card fees if shoppers preload value. But it’s unclear why everyday users, especially in European democracies with easy access to banking services, would hold a private currency with no consumer protection. “Unless you’re a criminal, there’s no use case,” says Ryan Cummings, former White House advisor.

Business of Payments readers likely have two questions:

  1. When will stablecoins be used for retail payments?
  2. Is there money to be made?

On the first: as Jeremy Light shows, most stablecoin activity today is crypto trading. Retail payments? Just $250m/month, nearly all in Tether (USDT). Visa and Mastercard have cited poor user experience and high fees as major barriers to adoption.

As for profitability: probably not. If stablecoins are fungible, meaning a “Walmart dollar” is interchangeable with a “JPMorgan dollar” then margins may collapse to 10bps, in line with money market funds. Coinbase is already offering 4.1% on USDC, and as Andrew Dresdner notes, that leaves little room for profit.

In other news

The latest UK government payments strategy includes the formation of several new committees: a Payments Vision Delivery Committee, a Vision Engagement Group, and a Retail Payments Infrastructure Board. Undoubtedly good news for those who make a living sitting on industry panels.

In aviation news, Stripe is reportedly suing the investors behind Bonza, the bankrupt Australian airline. Stripe processed payments and now faces 70,000 chargebacks worth A$20 million.

In Denmark, NETS went down on Saturday 19 July, leaving Danes unable to use ATMs or POS terminals at home and abroad across Dankort, Visa, and Mastercard. One group of Danes stranded in Cyprus wrote: “Our plan for now is to try a live performance that includes both singing and dancing, but we are crossing our fingers that the problem is resolved before they refuse to serve us any more beers.”

A group of people sitting at a table with food and drinks AI-generated content may be incorrect.

Figure 2: Danes struggling to come to terms with the NETS outage

Romania is the latest country to introoduce an industry-backed push to increase card acceptance at small businesses. The ePOSibil programme, backed by Visa and six local banks, offers six months of free terminal rental.

Sifted’s new list of top European B2B SaaS firms includes four from the payments world: infrastructure players Primer (London) and Payrails (Berlin), as well as Brite(open banking, Stockholm) and Sunday (restaurant pay-at-table).

In the US, a court has struck down the Federal Trade Commission’s proposed “click to cancel” rule, which would have required businesses to make cancelling subscriptions as easy as signing up. The rule was fiercely opposed by lobby groups and now looks to be off the table.

S-Payments revenue up 17% in 2024, outpaces German market

Geoffrey BarracloughLeave a comment

The German Sparkassen (savings banks) are among the few European incumbents thriving in payments. S-Payment, the merchant services division of DSV Group, a central organisation providing services to the 353 member Sparkassen, saw revenues rise from €249.5m in 2023 to €291.8m in 2024 — a 17% increase. The information is included with DSV’s 2024 annual report although S-Payment’s profits are not disclosed.

Bar chart showing S-payment sales revenue (€m) from 2022 to 2024, with increasing values in each year.

Higher revenues were attributed to “services for marketing and development projects for card-based and digital payment applications, as well as from the high acceptance of mobile payment applications.”

S-Payment volume from Apple Pay and Google Pay reached €7 billion in Q1 2025, up 35% year-on-year.  Girocard transactions rose 12% to 295 million, significantly outpacing the domestic payment scheme’s annual growth of 5.6%. S-Payment’s terminal estate also grew by 5%.

S-Payment is well positioned to profit as cash usage continues to decline in Germany, and the trend may accelerate if the new federal government follows through on plans to mandate digital payment acceptance at shops and restaurants.

The company is bullish on its softPOS (“Scan to Pay” on mobile), which it claims has been downloaded 2 million times and processed 21 million transactions in Q1 2025. The solution supports Alipay+ and Bluecode. Here’s a fun promotional video:

For slightly larger merchants, S-Payment will offer a new “Cube” terminal (manufactured by CCV), designed to bridge the gap between softPOS and full POS systems.

Management is also very positive about wero, Europe’s new account-to-account solution that aims to “close the giropay gap” for online bank payments. One million Sparkasse customers have activated wero within their mobile banking apps, though there’s no usage data yet available.

The S-Payment division also includes:

  • S-Public Services, which had a particularly strong year. It counts 3,800 public-sector institutions among its clients. Two-thirds of German municipalities already use GiroCheckout for online payments. In partnership with PAYONE, S-Payment won the nationwide tender for ePayBL, the federal and state governments’ online billing platform for administrative services.
  • 40% of PAYONE, the online payment and merchant acquiring joint venture with Worldline. Worldline shareholders will be reassured to learn that no impairments or write-downs related to PAYONE were noted in S-Payment’s 2024 report. 
  • 33% of GIZS, a joint venture originally formed to support the now-defunct paydirekt scheme. GIZS has since pivoted to supporting broader payment innovation within the Sparkassen-Finanzgruppe.
  • 22.5% of SRC Security Research & Consulting, which provides PCI and cybersecurity services and is recognised as a Common Criteria evaluation lab.
  • 12% of qards, the issuer processor formed from the merger of Bayern Card Services and PLUSCARD. It now handles over 28 million Visa and Mastercard-branded Sparkassen cards.

Further growth is expected in 2025, with management forecasting “additional revenue through the further development and implementation of both physical and digital payment cards, as well as mobile payment solutions.” Management makes a point of restating its optimism about the future of Girocard, with continued digitisation and a new partnership with PAYBACK, the country’s leading loyalty programme which allows card holders to automatically earn points when they pay by card. 

Newsletter – July 2024

Geoffrey BarracloughLeave a comment

The Payments Business

Klarna has sold its gateway business to a local investor consortium for $520m. Klarna Checkout (KCO) claims 40% share of its home market of Sweden and 20% across the Nordics as a whole.

It’s obvious why Klarna is selling. KCO competed with key distribution partners such as Stripe and Adyen and the very generous sale proceeds will bolster Klarna’s balance sheet and help grow its lending business.

But it’s less clear how KCO’s new owners will make a return on their investment. Stand-alone gateways have been under considerable pricing pressure in recent years, and many have ended up vertically integrated into the larger merchant acquirers.

In banking news, BNP Paribas and BPCE, which together handle c.30% of card payments in France, will invest €100m each and pool their payment capabilities to create a joint-venture with the scale to compete with Worldline and Nexi. Technology will be “home grown” and most likely a continuation of Partecis, an in-house platform based on ACI products. While there’s plenty of scope for synergy in France, the JV will find its hoped for international expansion rather more challenging as PagoNxt, Santander’s payment unit, demonstrated when it recently closed its German operations.

As predicted in last month’s Business of Payments, Sabadell has postponed the sale of its merchant services business to Nexi. Sabadell is subject to a hostile takeover from BBVA, another Spanish bank. BBVA has a good in-house payment offer and has less need of Nexi’s products.

IDC, a London-based research firm, has published vendor evaluations for online and omni-channel retail payments. The full reports cost $20,000 each but the top ranked firms have helpfully made their sections available free of charge. Stripe comes top for online payments although is marked down for being expensive. Adyen is first for omni-channel but customers are warned that its all-in-one solution may lack flexibility.

Stripe is notably missing from IDC’s omni-channel evaluation but is quickly becoming a very credible option for cross-channel merchants in Europe. Stripe has launched a suite of new enterprise services in France including its S700 POS terminal, acceptance of Carte Bancaire and an integration with CEGID, a leading local retail ISV. Stripe claims half the CAC-40 companies as customers and announced that Accor, the hotel group with over 5,600 locations worldwide, is standardising on Stripe for its new, centralised booking system. Stripe obsessives will enjoy this detailed history of the business.

Viva Wallet’s lawsuit with JP Morgan ended in a London courtroom with both sides claiming victory. JPM paid an eye-popping $800m for 48.5% of Viva in 2022, primarily to gain access to SME customer onboarding tools for European markets. Haris Karonis, Viva’s founder, claimed that JPM then deliberately blocked his company’s launch in the US so that the giant American bank could buy the rest of Viva on the cheap. JPM counter-claimed that Karonis failed to understand how far Fintech valuations had fallen.

Financial results of listed payment companies have settled down post-pandemic into a phase of steady but unspectacular growth. FXC have crunched the Q1 numbers so you don’t have to.

A wero for your thoughts

A female white soul singer with big hair sings "I need a Wero" in a German beer cellar while holding a phone displaying a QR code

It’s taken four years and 14 of the original 31 banks have exited the consortium but the European Payment Initiative (EPI) has finally launched wero, the long-long-awaited domestic European payment champion. Wero, a combination of “we” and “euro”, is live for person-to-person money transfer, initially for customers of co-operative and savings banks in Germany and KBC in Belgium. French banks come on stream in the autumn.

Shoppers will be able to make eCommerce payments with wero from early 2025 and Computop, the German PSP, has already begun asking merchants to register to be part of a pilot. In-store payments will follow in 2026.

Payments & Banking, a German blog, explains what wero is and what it is not.

The consensus from payment experts is that for wero to succeed the EPI needs to focus ruthlessly on user experience and keep the member banks firmly in the background. And “I need a wero” is the only song that will do as you can hear in this short commercial. 

Paydirekt and Sofort axed

Even though wero is at least six months away from being ready for eCommerce, its launch sparked the unexpectedly early closure of Paydirekt/Giropay, a domestic competitor to PayPal launched by the German banks in 2016. 

Insiders tell me that the service termination was badly handled. Giropay switched off its old integration interface at the end of June even though many acquirers had not yet migrated to the new version.

Meanwhile, Klarna has announced the closure of Sofort, the German online bank transfer service which it bought for $150m in 2013. Merchants will be migrated to Pay Now, Klarna’s open banking product. This includes buyer protection which is great for shoppers but less exciting for Sofort’s many merchants in the gambling and adult sectors. These customers will be looking for alternatives.

Klarna’s new wrapper doesn’t come cheap. In Germany, Adyen is charging 1.35% + €0.20 for Klarna Pay Now transactions. For UK merchants, Mollie is asking a punchy 4.99% + £0.30.

If that wasn’t enough disruption, Shopify is deactivating Amazon Pay as a payment option from all European merchants. No reason was given and merchants are really unhappy.

Scheming

Blik, the wildly successful Polish mobile payment standard, continues its stunning growth with payment volume up 53% in 2023 to €29bn. Blik is jointly owned by Mastercard and a number of local banks who have suddenly woken up to the importance of their investment. From now on, the banks will send their CEO’s to Blik’s board meetings.

Bancomat, the Italian domestic debit scheme, is finally getting its act together. Milan-based investment fund FIS has made a €100m investment, the board has been slimmed down to speed decision making and a new CEO appointed from Mastercard. Nexi runs the technology for Bancomat and has put the card scheme live on Apple Pay and as a payment option on Amazon.

Read more about Bancomat’s 2023 results on the Business of Payments blog.

ISV

We’re taking a keen interest in the convergence of software and payments. Flagship Consulting’s latest report shows quite how dependent many American ISV’s have become on payment and other financial services revenue. 

In response, payment processors know they need to partner with ISVs and some have gone further, buying or building an in-house range of vertical software. 

Intriguingly, the stock market value of payment processors that offer software is rather lower than software vendors that offer payments processing. Jevgenijs Kazanins looks at why Toast (an ISV that offers payments) is valued more highly than Shift4 (a processor that offers software) even though Toast makes much less money. His conclusion is that ISV’s are better at securing recurring revenues under contract.

European ISV’s have now realised they too can make money from processing. The  opportunity is smaller than in North America because payment margins in Europe are much lower. Nevertheless, a savvy commerce software vendor can still double profit margins by embedding payments in its core merchant offer.

With so many acquirers and PSP’s pivoting towards ISV’s as their primary distribution channel, a number of start-ups have begun offering key parts of the technology stack as-a-service. Here are a few that have caught my eye.

  • Chift, based in Brussels, offers PSPs connections to a range of leading accounting, eCommerce and ePOS software though a single API. The company just raised €2.3m
  • Shape Technologies is offering payments-platform-as-a-service to payment facilitators with capabilities including onboarding, KYC and billing. Shape is founded by alumni from Cardstream and is helping put Taunton, Somerset on the Fintech map.
  • Fung, in Amsterdam, offers a similar product set to Shape but is also a payment institution and can handle the money flow too.
  • Dublin/Vilnius based Paynt, goes one step further with a full acquiring-as-a-service proposition.Subscribe

New shopping

We’re keeping a close eye on the progress of autonomous stores as one possible driver of a seismic shift in grocery transactions from POS to the shopper’s phone.

Rewe is leading the deployment of “just walk out” formats in Europe. The German supermarket giant has opened a 1200 sq metre autonomous store in Hamburg using technology from Trigo which can even identify fresh meat and cheeses picked from the deli counter. Showing confidence in the concept, even where labour costs are much lower than Germany, Rewe has also opened an autonomous store in Bucharest.  

Although sceptics point out that frictionless checkout often involves more manual intervention than the vendors let on, the use cases are multiplying. For example, in a village store in Switzerland a shipping container is transformed into an unmanned convenience store (or walk-in vending machine) using technology from FastaXs.

Biometric payments

With early pilots looking positive, there’s growing momentum behind new biometric payment technology in the US, including palm payments (favoured by Amazon) and even face payments. JP Morgan is taking an interest in the latter with a partnership with PopID, a Californian start-up which has an early lead in the technology.

In Europe, Mastercard is backing PayEye, a Polish start-up which is piloting its iris/facial recognition product at five locations of Empik, a large retailer of books, toys and games.

@android.com.pl

Płatność spojrzeniem. Już dziś żyjemy w Cyberpunku #payeye #empik

♬ oryginalny dźwięk – Ulubiony portal technologiczny – Ulubiony portal technologiczny

Digital reciepts

A number of start-ups are trying to make it easier for merchants and consumers to move to digital receipts. Habits are hard to shift. Despite a new legal requirement in France that paper receipts should be opt-in only, Auchan, the grocery chain, reports 60% of shoppers still ask for paper.  

  • In the UK, Slipp, which boasts JD Sports as an early client has raised £750K. Slipp integrates with the ePOS software to send the shopper a text or email. JD Sports says using Slipp’s SMS receipts to promote its loyalty programme is increasing the number of customer sign-ups.
  • Anybill, from Regensberg in Germany, asks customers to scan a QR code presented by the ePOS. Pricing ranges from €4.49 to €35.99 per month per outlet.
  • Yocuda, a French start-up acquired by Global Blue, claims to have delivered over 2m electronic receipts to over 200,000 identified shoppers. Clients include Halfords and Decathlon.
  • Receipt Hero, based in Helsinki, has raised additional funds to supplement the $5.7m already invested. Receipt Hero offers cardlinking as well as QR scans. Partners include PayOne.
  • Pi-xcels from Singapore has an elegantly simple product that delivers an e-receipt automatically when the shopper taps their phone on the payment terminal. The product integrates with the terminal not the ePOS software and is available on Ingenico and PAX.

There’s an open question whether digital receipts can establish themselves as product category in their own right or whether merchants would prefer to buy the capability as a feature of existing POS or CRM software.

Artificial Intelligence

Artificial Intelligence is moving up and down the hype curve faster than any previous technology as Benedict Evans explains. McDonalds has already hit the trough of disillusionment  and shut down a pilot with IBM that used AI to automate order taking at 100 drive-thru restaurants. The robots made too many mistakes such as adding bacon to ice cream.

Worldline is taking a more measured pace and has detailed how it is managing its AI initiatives. This is 1500 words of big company governance, stage gates and committees. I wish them luck.

SoftPOS

This technology, which allows any off the shelf consumer device to accept contactless card payments, was originally touted as a micro-merchant proposition but is proving most popular with large enterprises.

LVMH is leading the innovation. Liberated from the need to locate the nearest payment terminal, sales associates at Christian Dior, an LVHM brand, each have their own iPhone to serve customers wherever they are in the store. Dior has worked with Adyen, Global Blue and Vo2 Group, a Paris HQ’d tech consultancy, to add instant VAT tax refunds to the proposition.

In vendor news, Rubean, based in Munich, has raised an additional €2m capital to finance its strong growth. Sales are forecast to rise to €2.2-€2.5m this year from €1m in 2023 on the back of new distribution deals.

Rubean’s partnership with Global Payments may be threatened by the Atlanta processor’s unpublicised purchase of Yazara. The Global/Yazara tie up is likely also to be bad news for MyPinPad  which local sources suggest may be replaced as supplier to eService, Poland’s largest acquirer, which Global bought last year.

In better news for MyPinPad, Ur&Penn, a leading chain of jewellers in Norway, is using its SoftPOS application to take store payments on the associate’s Android phones. 2izii is the integrator and Elavon the acquirer.

Phos, acquired by Ingenico in 2023, is making good progress building out its distribution network, announcing a key partnership with Shift4, a US processor with big ambitions in Europe. Phos is also the technology partner for BORICA, which provides SoftPOS to the three largest banks in Bulgaria. BORICA claims 1,500 “terminals” live today.

In Italy, Ultroneo has implemented MarketPay’s PayWish SoftPOS application for its Get Your Cash merchant proposition. Volumes are growing swiftly (see below) but it’s not been plain sailing. Writing on LinkedIn, one Ultroneo director explained “For nearly 12 months now we have been struggling with the teething problems of this new technology. Bug after bug, incident after incident, we have managed to stabilize the SoftPos to the delight of our customers.”

Image preview

Openbanking

The UK’s incoming Labour government is making very positive noises about fintech. Quoting from its manifesto: “Financial services are one of Britain’s greatest success stories. Labour will create the conditions to support innovation and growth in the sector, through supporting new technology, including Open Banking and Open Finance and ensuring a pro-innovation regulatory framework.”

There is much that a new regulatory approach could deliver, including an open banking acceptance mark, “scheme” rules to ensure common standards for authorisation codes, refunds etc, the introduction of consumer protection and a recognition that all this cannot be provided free of charge.

Positively, the number of open banking payments made in the UK rose c.50% year-on-year to 17m in May 2024. Variable Recurring Payments (VRPs), the open banking equivalent of direct debits, now account for 11% of the total.

The increase is encouraging but compared with the 2bn debit card transactions made in the UK in a typical month, volumes remain very small.

The slow take up of open banking has implications for the large number of vendors operating in this sector. There are twenty listed on the UK government’s procurement framework alone. If revenues don’t arrive soon, only the best capitalised will be able to keep trading until the product goes mainstream.

Truelayer, hopes to be one of the survivors, having raised a remarkable total of $271m from its investors. Truelayer’s CEO has given an interview  to explain that he is playing a long game, saying “We are an infrastructure business. That means we are likely going to spend a lot of time and a lot of years building and spending money before actually earning,”Subscribe

Cash

Germany is often cited as the last hold-out of the cash economy but the latest Bundesbank payment survey shows a further decline in the use of paper money. The cash share of transactions fell 7% points in 2023 to 51% and its share of volume by 4% points to 26%.

Old habits die hard. A Bavarian bar-owner called the police after a Latvian customer paid for 16 beers with 16 separate card transactions.  

It’s no surprise that policy-makers in many countries are grappling with the implications of the world going cashless. For example, Ireland has passed an “Access to Cash” law which gives the government powers to set minimum numbers of ATMs for each area. The local banks, and their customers, will bear the cost. Revolut, wildly popular in Ireland, will likely get a free ride.  

Without this kind of subsidy, independent operators will stuggle. In Poland, Euronet, which manages 50.000 ATMs, limited withdrawals to PLN200 (€46) for one day as a protest at the government’s refusal to let it to charge for transactions. Euronet complains that it is losing money because local banks pay just PLN 1.2 (€0.28) per withdrawal. We assume that Euronet probably more than makes up for the shortfall with its eyewatering DCC charges for tourists.

An enterprising British artist commented on his struggles to find a place to withdraw cash by fixing an ATM to a bridge in the middle of a river.

Facade of grey atm machine with screen, buttons on brick buttress with rippling water below

Of course, even if cash is available, retailers may decide not to accept it. This British pub says it has saved 12 hours work each week by going cashless. Cash is expensive to handle and the costs grow as volume declines. The Portuguese Central Bank believes cash costs merchants 2.96% compared to 0.78% for debit cards.

Image preview

Crypto corner

Crypto currencies are assets not money, yet vendors persist in bringing forward payment acceptance solutions at POS.

“Few have heard of SpacePay, but give it a year, and it will likely be a household name” is the bold claim from this London based start-up which graduated from Barclays’ fintech accelerator. SpacePay, which has raised $750K, says it will allow people to spend crypto at “most existing point of sale card machines.” It’s not clear how this would work in practice.

If there is a user base for crypto at POS anywhere, it’s going to be in a cross-border market such as Luxembourg where some shoppers may not want their home country authorities to know what they are buying.

Done4You, an ISO based just across the border in Namur, Belgium, has implemented crypto at POS for a petrol station in the Grand Duchy using GoCrypto’s technology. Crypto transaction are 1.25% compared to interchange + 0.5% for credit cards.

In other news

Fiserv’s brand association with the Republican National Convention in Minneapolis is dividing opinion.

Good news for travellers. International cards are finally accepted at 97% of Dutch payment terminals and will reach 100% by the end of this year.

The Netherlands experienced its longest payment outage for five years as 30%-40% of PIN transactions failed over a three hour period. The problem was blamed on Equens (Worldline), the domestic inter-bank network. Worldline is also reportedly behind a shorter outage affecting UK grocers earlier this month.

A sign of the times. Such is the consumer uptake of Apple and Google Pay, one French bank has found that 20% of customers opt not to be sent a physical card.

Advent, whose portfolio companies include MangoPay, Planet and MyPOS, is excited about vertical payment/software bundles, specialist tools to support eCommerce and solving cross-border challenges.

Follow the money. European VCs have picked their top payment start-ups. 

We’ve not seen many layoffs recently but Rapyd, the Israeli acquirer/processor, is cutting 30 posts in its home country. 

TSG, an American consulting business, runs an annual payments API competition. Adyen is the overall winner with Square as runner up.

And Finally

Stripe has opened a new London office and is celebrating with a rather mystifyingbrand advertising campaign aimed at enterprise customers.

Image

Photo credit Jevgenijs Kazanins

How to get in touch

Geoffrey Barraclough

geoff@barracloughandco.com

www.businessofpayments.com

Newsletter – April 2024

Geoffrey BarracloughLeave a comment
A person standing at a podium Description automatically generated

The Payment Business

Forrester’s latest analysis of merchant payment providers makes for fascinating reading. The scoring can be a little incoherent at times but the report includes unparalleled direct feedback from Forrester’s clients. Stripe and Adyen come out best but don’t escape criticism. Stripe is “expensive” and Adyen’s support “can be hit and miss.”

Image

Global Payments and Worldline, neither of whom participated in the research, score badly. Forrester doesn’t think either has done enough platform integration.

To celebrate its top spot, Adyen has made the report available free of charge. It’s worth a read and a reminder to always engage with analysts. The more you communicate – product roadmaps, customer testimonials, invitations to events etc – the better coverage you get.

Forrester aside, Worldline had a good month by recent standards. The beleaguered processor has won the fight with arch-rival Nexi to become the exclusive partner of Cassa Centrale Group. The deal doubles the size of Worldline’s Italian business by adding more than 90,000 POS terminals processing €9bn annually.

The next Italian bank up for grabs is Banca Popolare di Sondio which is reportedly considering selling its merchant services business and ending its partnership with Nexi. Worldline is said to be in poll position to pay €70-€100m for 25K POS processing €2.2bn. Nexi, BCC Pay and Market Pay are also in the running.

Worldline has also finalised its JV with Credit Agricole in France. Meriem Echcherfi, currently head of merchant services at the French bank, will run the new business which will should be live in early 2025. This is smart move. The first rule of bank partnerships is to hire your general manager from the bank.

Nexi reported decent full year results with merchant services revenue up 6% in Q4 2023 and a particularly good performance in Germany. Management will be relieved that Unicredit, Italy’s largest bank, looks set to renew it partnership with Nexi and extend the relationship to additional countries.

Stripe celebrated becoming cashflow positive for the first time. This takes the pressure off a possible IPO. “We’re not in a rush,” said the CEO. Stripe’s 2023 letter to shareholders was very bullish but didn’t disclose the company’s revenue or profit numbers.

The letter did reveal that payment volume rose 25% in 2023 to exceed $1tn and that the business is increasingly servicing larger merchants. More than 100 of Stripe’s clients process over $1bn and it has been signing good omni-channel customers such as Hertz. The car rental giant is moving its worldwide payment acceptance to Stripeincluding installing BBPOS terminals in 3,000 locations. The big win for Hertz is to be able to accept Apple Pay. Although this seems a low bar, it’s a real pain point in the US.

PAX Technology had a difficult 2023 as key customers showed “increased prudence in payment terminal deployment.” Revenue was down 18% to $860m and profits down 12% to $150m. In Europe, PAX called out good performances in Italy, the United Kingdom, Turkey, Spain and France but Germany proved more challenging.

Although than 50% of sales are Android terminals, PAX is struggling to generate revenue from services. Sales of SaaS solutions associated with the 11m devices connected to MAX Store were just $13m.

Paypoint, one of the UK’s leading ISO’s, will consolidate all its processing with Lloyds Bank Cardnet. Paypoint’s 20,000 merchants deliver around £7bn volume and the acquiring relationship had been at risk, notably from Global Payments Inc., which inherited a chunk of Paypoint’s merchants when it bought EVO last year. It looks like Lloyds’ ability to extend its offer to include a bank account and commercial card won the deal.

We saw several interesting fund raises this month.

  • PPRO, the white label local payments platform, raised €85m, taking its total investment to an eye-popping $462m. PPRO has some great customers including Stripe and PayPal and insiders tell me it hopes to be EBITDA positive by the end of 2024. 
  • Flowpay, the Czech merchant cash advance specialist, raised €2.1m to expand out of its home market. Already boasting key local ISV partnerships including Dotypos, Storyous and Shoptet, Flowpay is one to watch.
  • Bezahl, a Cologne based supplier of payment acceptance to car dealers, raised €22m. The business already has 130 clients serving 1,100 locations. Bezahl charges a monthly fee per location and sends most transactions to Adyen for processinghttps://www.youtube-nocookie.com/embed/zplTu4QN3zA?rel=0&autoplay=0&showinfo=0&enablejsapi=0

Staying in Germany, REWE, the supermarket giant, has spun out its payment acceptance team with the brand name of Payment Tools. REWE’s strategy mirrors that of its French rival, Carrefour, which demerged its payment division as MarketPay.

Finally, GoCardless has bought Nuapay, a specialist in SEPA Instant, UK direct debits and open banking, from EML Payments, the hapless Australian processor, for €34m. Nuapay, based in Ireland processes €44bn of A2A transactions annually and is forecast to lose €1.2m EBITDA this year. GoCardless also revealed its latest financial results in an exclusive interview with Sifted. Discussing a substantial loss of £80m on sales of £92m, the CEO said “The results demonstrate that we’re moving from strength to strength.”

MPE 2024

This year’s Merchant Payment Ecosystem conference in Berlin was as good as ever. Read this special edition of Business of Payments to discover more about the end of cards, digital Euro and the slow uptake of open banking. 

I moderated an entertaining panel discussion nominally about consumer behaviour but actually covering a variety of topics from Saudi investment in Fintech to why Finland’s largest retailer chose Adyen for its payment processing. The panelists were Adil Riaz from NearPay, a SoftPOS vendor, Gábor Bujáki from OTP Bank, Hungary’s largest acquirer, Janine Kaiser from The Payments Association EU and Kai Lindström from S-Group, Finland’s largest retailer. Watch the conversation below..

Schemes

Visa and Mastercard’s landmark deal to end 20 years of US litigation on “swipe fees”attracted much press coverage. The schemes have conceded an average 7bp reduction in Interchange paid to card-issuing banks. Although retailers will have more freedom to introduce surcharging, it’s likely that large merchants on IC++ pricing will see most of the benefits. Consumers may be annoyed by some potentially rather complex POS flows as merchants attempt to calculate differential surcharges by card type.

Immediately after this announcement, Mastercard revealed it was increasing scheme fees in the US. Just like a casino, the house always wins.

On this side of the Atlantic, leading French retailers including SNCF and Auchan report that the transaction share of Carte Bancaire, the domestic card scheme, has fallen from 97% to 85% in just three years. Shoppers are increasingly choosing to pay with mobile wallets or Visa/Mastercard branded cards issued by the neo banks. The retailers are not happy, saying that international cards cost 1.2% on average compared to 0.9% for CB.

JP Morgan has become the first US bank to join Carte Bancaires. A spokesman said the move was “mainly a request from our customers, the use of the [CB] network being less expensive than that of other card networks.” 

Ireland no longer has a local scheme so it’s hard to understand recent thinking in Dublin. Ireland’s Central Bank announced that the country’s payments strategy “needs drastic change” only months after the competition authorities killed an attempt to do just this by outlawing the introduction of a domestic mobile payment scheme. Revolut, which is wildly popular in Ireland, will likely profit from this regulatory confusion.

Blik, the fast-growing Polish mobile payment standard, has restated its international ambitions. With launches already planned in Slovakia and Romania, management believes “Blik Euro” could become a pan-European payment system. Local vendors are innovating with Blik. Posnet is offering Blik acceptance at cash registers without the need for a payment terminal. eService (Global Payments) is providing the processing. Fees are 0.6% + 1.4c.

Wero, the new QR based mobile payment scheme promoted by the European Payment Initiative is supposed to launch in June. However, the EPI has not posted any news on its website since December. We await updates with interest.

Capital One has revealed more of its plans for Discover, the US card network it hopes to acquire later this year. The new owners want to “fix” the network’s international acceptance, “which is not quite where it needs to be, for the entirety of our card business today,” said its VP Finance.

New Shopping

Amazon shocked the industry by axing its “Just Walk Out’ Stores in the USA, resulting “a few hundred” layoffs in its technology team. Instead, the company will focus on its new range of Smartcarts. Retail analysts conclude that Just Walk Out technology does not scale for large format stores – it’s too expensive and needs too much manual intervention. Amazon had previously revealed that 1,000 staff in India acted as “virtual cashiers” for its autonomous stores.

While there still seems a strong business case for Just Walk Out in small format stores, Amazon’s decision will come as a blow to other retailers that have bought its technology, presumably to benefit from Amazon’s well-funded roadmap. One of these may be Delaware North, a hospitality vendor that has just installed Just Walk Out technology to sell beer at London’s Wembley Stadium.

Other vendors are available. Lekkerland has installed three AI-based smart fridges at an EV charging station in Saxony. You tap your payment card, open the door, remove the items and are automatically billed. Portuguese start-up, Reckon.ai is providing the technology.

We’ve been talking about RFID to automate grocery checkouts for over twenty years but it’s still not ready. Walmart has withdrawn a pilot in which it used RFID to verify whether customer’s self-scanned purchases were accurate. 

Sometimes simpler is better. Take a look at Sticky, a Manchester-based start-up which allows consumers to pay by simply tapping a cheap NFC label. “You can get a drink in five seconds with our physical digital labels. It’s faster than a card,” says the CEO. Sticky charges £60/month for eight “flows.”

Product

Retailers say that returns abuse is the leading source of fraud, overtaking phishing for the first time. Here’s a good round up from Edgar Dunn which shows the scale of the challenge. Unsurprisingly, this trend is leading to a big increase in chargebacks so why don’t retailers dispute more of them?  One reason may be the risk of offending good customers. This New York restaurant complained when a customer used a chargeback to reclaim a deposit for a cancelled booking and the ensuing argument became very public.

The UK has a cunning plan to fight fraud. New legislation will make Faster Payments slower to give PSP’s time to investigate suspected bad transactions.

Dwayne Gefferie lays out the strategic case for PSP’s to move into orchestration or infrastructure-as-a-service. Or both. However, it’s not clear how much money is in orchestration. One analyst says the market will grow from $846m today to $4.8bn by 2032. Aite, a more reliable source, suggest the actual revenue reported by dedicated fintech orchestrators today is less than $25m. Looking on the bright side, Aite says “there’s plenty of room for providers to grow.”

Merchants are divided on whether to go with a single payment provider or use “orchestration” to manage a series of best of breed vendors. Hugo Boss is using Adyen for all its in-store and online requirements. Why not use multiple suppliers? “We are not a petrol station. We are Hugo Boss,” explains the retailer’s head of payments.

InPost, Poland’s last mile delivery specialist, has launched a payment wallet called InPostPay. It could do well as it builds on an installed base of over 9m mobile app users.

Many are sceptical about Click to Pay but the schemes’ much delayed attempt to compete with one-click wallets is finally coming to Europe. ING is offering Click to Pay with Mastercard, initially in Spain. Visa has launched Click to Pay in Francewhere Adyen is the first PSP to offer the product. It claims 4% points increase in authorisation rates compared to a standard transaction.

ISVs and their payment partners are scrambling to offer pay-at-table. Toast, the US restaurant software vendor, has launched in the UK with an impressive solution running on Adyen’s POS hardware. “Long battery life and durable,” says one IT Director.

Revolut launched its acquiring business in 2021 but we heard little news until it launched point of sale software with integrated payments. Aimed at retail and hospitality, Revolut POS is based on Nobly, the ISV it bought in 2021. The software appears to be free and transactions start from 0.8% and 2c for domestic cards. International cards are 2.6% which is pricey for any merchant in a tourist location.

Here’s a good case study from the introduction of contactless ticketing across 60,000 validators covering the whole Dutch public transportation network. The new system is saving money and travellers seem happy. EMS (Fiserv) is the acquirer. Meanwhile, Getnet has resigned the Madrid bus network including acceptance, gateway and acquiring.

There’s a small but growing category of software vendors aiming at making life easier for people who run payment businesses. Kani, founded in Newcastle, reconciles PSP transaction data with the information provided by the card schemes. Torus, started by an ex Mastercard consultant, won the innovation competition at MPE with its pricing software that gives acquirers better control over their portfolio profitability. Both are worth a look.

SoftPOS

SoftPOS is a downloadable payment application that turns any Android or iOS device into a payment terminal. The standards regime is quite complicated. Matt Jones gives a good explainer of how it all fits together.

This technology seems finally ready for prime time. Tabesto, a vendor of intelligent ordering tools for restaurants, says 90% of sales are a new product called Fox, an integrated all-in-one kiosk with no external POS or printer. Customers can choose SoftPOS payment apps from Worldline or DejaMobile. Here’s it is in action at Waffle Factory.

https://https://youtu.be/JvCK_AV0mQg

Deja Mobile, based in France and now owned by MarketPay, has some good case studies. Two months after launch with Rabobank in the Netherlands, 1,200 micro-merchants have activated the service of which 80% are generating transactions.

I’m not convinced PSPs can make any money out of micro merchants but if you want a mass-market customer base you will need to spend money on marketing. Best of luck to Viva, the mPOS vendor partly owned by JPMorgan, which has launched a major advertising campaign in France.

No alt text provided for this image

Softpay is another vendor in the news, announcing a partnership with Elavon, targeting SMEs in the Nordics. SoftPay is now listed on the Sunmi app store giving access to a broad range of merchants.

Rubean, the German softPOS vendor quoted on the Munich stock exchange, expects 2024 revenue of c.€2.5m, doubling year on year but below expectations. The company predicts sales rising to c.€10m by 2027 on the back of new contract wins including Commerzbank Global Payments.

BT, still the UK’s largest telco, is offering SoftPOS to its 1m SME customers with Adyen is providing the technology. The service is good value. All transaction are priced at 1.4% and there is no monthly fee. BT’s move could start a trend. Ericsson says mobile operators worldwide want to offer financial services to their customers.

Openbanking

Growing disquiet at the UK’s slow progress on open banking was highlighted by a speech made by Chris Hemsley of the Payment Systems Regulator to the Pay360 conference.

Referring to emerging rules for variable recurring payments (VRPs), widely believed to be the best hope of driving mass market adoption, the regulator says it has asked the industry to “get on with it.” Jack Wilson from TrueLayer takes issue with this and writes the industry is now “moving at the pace of the slowest” and that the slowest is the regulator itself. The industry is complaining that it is in limbo waiting for the results of a consultation on how open banking should be priced and without a clear way of making money, has little incentive to commercialise new products.

The lack of an acceptance mark or scheme brand is also major stumbling block. Looking at the checkout page below, how would consumers know they can pay with their banking app? Clue: Vyne is an open banking vendor.

Despite the current uncertainty, there is some good news. Ecospend, Trustly’s UK business says that 30% of payment volumes at Hargreaves Landsdowne, a retail investment manager, are made using open banking. 

Ecospend has been the supplier to HMRC (the UK tax authority) which has long been the poster child of UK open banking payments. With Ecospend’s initial 3 year term completed, HMRC is retendering its banking contract. The winner is likely to be one of the 15 vendors selected to join the Government’s framework contract.

In partnership news, Nexi has selected Mastercard as its open banking provider. Mastercard’s product is based on a white-label of Token’s service. Visa-owned Tink has won a contract from Deutsche Bahn for direct debit setups to power its bike sharing service and also a deal with Micropayment, a Berlin-based PSP.

A number of vendors are building an interface to allow open banking payments at POS using contactless NFC in place of cumbersome QR codes. Kevin, the Lithuanian fintech which made some high-profile layoffs before Christmas, has demonstrated A2A NFC payment on iPhone. Click through and read the comments which indicate some scepticism.

MultiPay, the UK POS focused PSP is doing something similar. Acquired.com is providing the open banking connections. Assuming the technology works, is there a business case? Alexander Peschkoff explains why A2A payments at POS don’t have commercial appeal.

More importantly, A2A payments may just be too slow for POS. A killer table from the UK Future of Payments Review shows the time it takes for a user to initiate a payment. PIX is regarded as best in class but, with Apple Pay as a comparator, even 20 seconds is too slow for POS merchant payments. Shoppers will keep using cards for a long time yet.

Artificial Intelligence

Klarna’s CEO has clarified that although the company’s AI chatbot is doing work equivalent to 700 people, this is entirely unrelated to the 700 people he layed off in 2022.

It doesn’t matter how clever your chatbot. RSR Resarch says consumers want to talk to a real person.

A bar graph with text Description automatically generated

But the AI demos keep getting better. This ChatGPT video certainly passes the Turing Test.

Possibly, one of the most appropriate uses of AI is to count the number of mentions of AI in corporate earnings calls. Hat tip to PayPal. And to FXC for asking its robots to research this pressing question.

How often did payments companies mention AI in 2023? AI mentions across Q1-Q4 2023 earnings calls by payments company

In other news

In a disastrous week for the UK payment industry, there were outages at Greggs, Sainsburys, McDonalds and Tesco. Although the incidents do not seem connected, the regulator is investigating. McDonalds blamed a “configuration change” but Burger King had the last word.

Rapyd’s Icelandic boss hit back at calls for a merchant boycott following the Group CEO’s strong support for Israel’s war in Gaza. “Claims such as that Rapyd works in Israeli settlements in the West Bank and that the company supports the Israeli army’s war on Gaza are completely false”, he wrote.

A fascinating piece from Matt Jones on the rise of Ali/Wechat Pay and the implications for Chinese soft power. On a similar theme, FXC looks at Asian QR code payment schemes and asks what happens when they become interoperable.

It’s been a good month for bloated corporate buildings. Fiserv has finally opened its new $37m HQ. “Welcome to Milwaukee. We have been waiting for you Fiserv,” said the mayor. PAX went bigger. Its new $46m HQ in Shenzen is 18 storeys high. 

Payments from a Merchant Perspective – useful (and free) research from Arkwright. Standardised and low-friction open banking is their number one ask.

We may think of payments as an environmentally friendly business but Edgar Dunn calculates transaction processing generate 3.3m tonnes of greenhouse gases each year. And card production releases a further 1m.

Wirecard latest. Dan McCrum, the FT journalist who broke the story, gives a good interview to Chris Skinner. Four years on, the story itself gets even stranger. It seems that Jan Marsalek, Wirecard’s fugitive COO, was working for Russian intelligence and has recently been living in Russia under the assumed identity of an Orthodox priest.

And finally

Kevin Hart, the US comedian, bought a bored ape NFT in January 2022 for $200,000. This is a particularly fine ape which sits under a rare “spinner hat.” Hart just sold the NFT for $47,000. Which still seems a lot for a jpg, even one as fine as this.

Newsletter – February 2024

Geoffrey BarracloughLeave a comment
A person standing at a podium Description automatically generated

The Payment Business

February 1st will be remembered as Worldpay’s Independence Day as it separated from FIS after the catastrophic $43bn acquisition in 2019. Worldpay has been spun off into a joint-venture with GTCR, a large Chicago based private equity fund, at a valuation of $18bn. You may have noticed $25bn missing. This is a loss to FIS shareholders for which nobody has apologised. 

GTCR, which has little previous apparent interest in fintech, bought 55% of Worldpay for $13bn in cash and has committed a further $1.3bn for “strategic acquisitions.” These will likely focus on closing Worldpay’s product gap with Adyen and Stripe through extra capability related to servicing platforms/ISVs and on expanding Worldpay’s international POS capability to serve global, omnichannel retailers.  

I asked Bing’s image creator to comment on the news. Surprisingly, Worldpay haven’t yet been in touch for the image rights.

A scene from the movie Independence Day with a large sign saying "Worldpay" and an alien carrying a card payment terminal

Share

Barclays, owner of Barclaycard, the UK’s second largest acquirer, has turned to private equity to rescue its underperforming payment division after having failed to find a trade buyer. Worldline, Nexi or Global Payments aren’t interested but Barclays is reportedly still looking for £2bn at 6.5x EBITDA.

The French do things differently. One week after Worldline appointed bankers to help avoid a possible hostile takeover triggered by its collapsing share price, Credit Agricole appeared as a white knight, taking a 7% stake. Worldline and Credit Agricole recently announced a JV and the French bank has a strong interest in ensuring Worldline goes through with the deal. 

In Italy, Nexi is vying with Worldline for the merchant business of Cassa Centrale Banca, a group of 66 regional co-operative banks. CCB processes €2.2bn annual volume from 25,000 POS terminals and is looking for a valuation of €70-€100m. BCCPay, which recently scooped Nexi for a partnership with Banco BPM, and Market Pay, an aggressive new acquirer spun out of Carrefour, are also believed to be in the running.

Turning to Germany, Global Payments is forming a JV with Commerzbank. The new business, snappily called Commerz Globalpay, is 51% owned by Global Payments and will sell products to the bank’s large domestic corporate and SME customer base. While Commerzbank could be a great distribution channel, German banks are notoriously bad at lead generation. Fiserv launched a similar venture last year with Deutsche Bank which is reportedly underperforming.

There seems little prospect of many payment companies floating on public markets this year. According to one VC, many still haven’t adapted to today’s business conditions: “Where you have massive… processing volumes, but you’re still making negative margins, [this] is no longer acceptable.”

One exception maybe Klarna which looks likely to IPO in the US in the first half of this year but may have been making pre-flotation cost cuts too enthusiastically. Klarna’s new outsourced customer service operation has been leaving merchants to wait up to a month for their support requests to be reviewed. Staff say they no longer have direct access to Klarna systems and are using a “desperately slow” virtual desktop.

Stripe is also an IPO candidate for 2024 and rumoured to be preparing for floatation by raising prices and being much more discriminating about which customers it is prepared to onboard. One industry expert reports Stripe’s “out of the box API pricing” is 2x3x higher than a year ago. Higher prices and more cautious risk policies may trouble some of the fintechs and ISVs which have built their businesses on Stripe.

In case you missed these stories from from the Business of Payments blog:

Elavon Europe posts its first profit since 2019 and revealed it had €3.2bn of airline tickets sold but not delivered on its books.

Allpay, the UK public sector specialist, reported a very positive set of results. Few other payment companies can boast 21% revenue growth and 16% operating margins.

Lemonway, one of the last marketplace payment specialists still in independent hands, impressed with revenue doubling and a maiden operating profit in 2023.

A graph with blue and orange squares Description automatically generated

Trustly, one of the European leaders in A2A payments, reported a difficult 2022 as it recovered from a tricky situation with the Swedish regulator.

January trading updates had contrasting impacts on two London-listed payment companies with roots in carrier billing and names like childrens’ TV characters. 

Boku, which is shifting its business towards global APMs competing with Thunes and dLocal, reported payment volume up 16% to $5.0bn and sales up 26% to $38m for H1 2023. Less happily, Bango, which has stayed closer to its original telco customer base, downgraded earnings expectations and lost 40% of its market capitalisation. Management says that new, value-added services are proving slow to deliver cash profits.

Checkout.com is the latest vendor to be designated a “significant provider” of card-acquiring services to SMEs in the UK and brought within scope of the Payment Systems Regulator’s directions.  Checkout is normally associated with enterprise merchants, but its good performance is thought to be thanks to a growing PF relationship with Mollie, the Dutch PSP which has begun selling to UK small businesses.

Ant Group, the giant Chinese technology group behind Alibaba and Alipay, has made a smart move into European merchant payments with the proposed acquisition of MultiSafepay. This Amsterdam-based acquirer brings a modern omni-channel technology platform (with Sunmi POS terminals) and 18,000 SME customers but the $200m price tag is expensive. MultiSafepay made a net profit of just $1.4m on sales of $50m in 2022.

New shopping

Just walk out is the new self-checkout, concluded Primark’s Chief Architect after a visit to this year’s NRF Retail Show in New York.  Although we’ve not seen much activity in the clothing sector, autonomous grocery and convenience openings are coming thick and fast.

Netto has opened what it claims to be Europe’s largest autonomous store in Regensburg, Germany. The technology is from Trigo and, at 800 sq metres with 5,000 SKUs, this is very impressive. Helpfully, fruit and vegetables are automatically weighed and added to the virtual basket when you take them off the shelves.

Trigo is also behind Aldi’s new SHOP&GO  check-out free store in Greenwich, south London. There’s no need to download an app, just tap your payment card, or phone, at the entry gates.

Image preview

You can get an idea of the potential of autonomous technology with this implementation at a UK football club which could eliminate the long queues inevitable when everyone wants to buy a drink at half-time. Sodexho, the catering company, runs the outlet. The technology is from AiFi.  

In biometric news, Carrefour’s franchise partner in Qatar is trialling a Face Pay product from PopID, a Californian vendor with 73 merchant locations live in America. It’s really not clear why this is better than Apple Pay.  Network International is processing the transactions with payment data tokenised by Visa.

Credit Agricole’s decision to launch a biometric payment card is equally unconvincing. The main advantage is not having to remember your PIN for transactions greater than €50, but this is what Apple Pay is for. Even the French bank’s supplier can see the writing on the wall. Zwipe is shuttering its biometric payment operation to focus resources on access control.

Despite every consumer carrying biometric ID in their personal phone, investors won’t give up on this. Polish fintech, Payvein, just announced fresh funding for its payment service based on Hitachi’s finger vein recognition technology.

What better way to give the thumbs down to biometrics than with AEVI’s suggestion of gesture based payments? The concept seems to involve waving at the payment device with a pre-registered hand signal. Presumably, not a rude one.

Cooking commerce may be a more fruitful concept. Kroger, the US retailer, has partnered with GE so you can buy groceries direct from the LCD screen on your oven. The new service was delivered via a software update to 150,000 domestic appliances.

Product

Apple, under pressure from the EU competition authorities, has finally opened up the iPhone’s NFC chip to 3rd party banking and wallet applications. The move may allow banks to bypass Apple Pay and its c.15bps charges. More excitingly for consumers, this service could facilitate a new market for open banking payments at POS. Mike Kelly explains how this might work. Excitement levels vary across Europe as Apple’s market share ranges from 55% in Denmark to just 10% in Poland. And the ruling excludes the UK. Because Brexit.

For years, PayPal had the best, friction-free online checkout in the business but this advantage has been eroded by Apple Pay, Stripe and others. These new checkouts also move fraud risk to the issuer which makes them more popular with merchants.

PayPal’s set of new product features should help claw back some of the lost ground, especially in Germany where it is still the number one eCommerce payment method. PayPal’s massive global base of 400m customer accounts and 25m merchants means its new one-click checkout recognises 70% of shoppers and is claimed to cut checkout time by more than half.

PayPal may soon need to worry about Shopify too after the eCommerce platform vendor began offering its Shopify Pay one-click checkout to non-Shopify merchants. 

The product could help merchants benefit from faster checkout where Shopify recognises the customer although the fees will likely be higher than a standard payment gateway. Amazon tried something similar with Amazon Pay although this proposition has struggled and recently announced layoffs. Unlike Shopify, merchants view Amazon as a competitor and avoided offering Amazon Pay if they could. 

Shopify is an absolute beast. Its head of engineering says he accepts 23,000 lines of code each weekday and the platform’s app servers handled 60m requests per minute on Black Friday. Blimey.

Irish customers will be delighted they can now use their Revolut card to buy a ticket on the Aer Lingus website. Revolut Pay,  a new product, transforms what looks to the cardholder like a debit card transaction into an account transfer. Aer Lingus is reporting impressive performance. Cart abandonment rates are sub 10% and authorisation rates at 98.5% which is pretty good for the airline industry. Published merchant fees for Revolut Pay start at 1% + 20c.

Back in the real world, one obstacle to the growth of the circular economy is how to pay people for products sent for recycling. The Danish city of Aarhus has a solution with this reverse vending machine for disposable coffee cups. People get their deposits back by tapping their payment card. TOMRA provides the machinery and Shift4 the payment processing in this clever use of the Visa Direct and Mastercard Send products.

Consumer returning a reusable cup at a TOMRA collection point in Aarhus Denmark

In car commerce news, KIA looks to be joining the number of automotive manufacturers launching payment products to help customers purchase upgrades, refuelling/EV charging and parking.  KIA CarPay is likely to be a sister product of Hyundai Pay, already launched in the US.

Computop, the German PSP part owned by Nexi, launched its “Pay to Drive”proposition for EV charging stations using the PAX IM 30 unattended terminals. Computop already has a good customer base in this sector including Compleo and Mercedes Pay for in-car payments.

In scheme news, Carte Bancaire has finally launched an account updater service with the unfortunate Franglais brand of Updat’R. Adyen, MONEXT and Lyra are the first PSP’s to offer the new product. 

https://youtu.be/8n47HeR7im0

FX loading can often be a guilty secret in the payment industry. Many vendors depend on marking-up foreign currency transactions for a considerable proportion of their profits and can be vulnerable if their larger customers start to scrutinise their bills too closely. New research from FXC shows how the US providers charge extra fees to their international merchants.

In rare good news for ACI’s merchant business Co-op, a UK grocer with over 2,400 stores, has moved its payment processing into the US vendor’s cloud in what it describes as a “very challenging and complex project.”

Cash

Public policy is turning to how cash can be saved from extinction. The Swedish government has demanded proposals to safeguard access to cash despite the public’s clear preference for electronic money. Only 8% of Swedes used cash for their most recent purchase.

As usage declines, cash becomes more and more expensive to provide. In Warsaw, the city government is moving to digital payments for parking, saying costs are just 5% of collecting cash from parking meters.

As people need less cash, the fixed costs of running ATM networks are spread over fewer transactions and many locations become uneconomic. In France, three big banks are pooling their ATMs and plan to reduce their number by 30%. 

Ireland will be legislating to stem the decline in ATMs following a 30% reduction in cash withdrawals since before the pandemic. Grocery shops and pharmacies will also be obliged to accept cash payments despite the cost burden this will impose on these businesses.

Financial inclusion is normally the reason cited for mandating cash acceptance but this argument ignores the huge benefits of bringing people into digital money. As this new report from the Atlanta Fed explains, people excluded from digital money are also excluded from much of the rest of the economy too. For a plain English description of financial exclusion, read this description of the business of cheque cashing in the US. A cash economy rips off the poor.

Germany is an exception, of course. Where else would Arnold Schwarzenegger be frogmarched to a bank to withdraw €35,000 in cash to cover customs charges on his Audemars Piguet watch?

The Terminator actor, 76, was seen holding a box in a customs office at Munich airport, in a picture obtained by BILD

SoftPOS

It’s still early days in the emerging SoftPOS market but Rubean looks like one of the European winners, having locked down a number of solid distribution partnerships and two enterprise customers in Spain. Read more on the Business of Payments blog. 

Softpay.io, based in Denmark, is another independent vendor making solid progress, including a potentially lucrative partnership with Nexi. Softpay has put its solution live at the Gebr Heniemann store in Copenhagen Airport. Snabble, a German start-up specialising in mobile ePOS, is providing the software application.

There is €8bn of payment volume on meal vouchers in France so it’s a smart move by Viva (JP Morgan’s European JV) to add Titre-Restaurant to its SoftPOS product.

MagicCube, based in California and one of the first wave of SoftPOS vendors has announced a go-to-market partnership with Shift4. The move comes two years after Shift4 invested in MagicCube and is likely to see the product come to Europe following the American acquirer’s merger with Finaro.

Finally, Worldine’s SoftPOS will come pre-installed on range of Hammer ruggedised smartwatches, tablets, laptops and smartphones supplied by Poland’s mpTech. Customers will still need to open a merchant account with Worldline but the move does open an interesting distribution channel with blue collar trades.

Open banking                                       

Bain, the consulting company, says that 2029 will be the year card transactions finally stop growing. But Dave Birch thinks we might be even closer to “peak card” than this, especially if large merchants integrate variable recurring payments (VRPs) into their apps. VRPs are the open banking substitute for both direct debits and card on file and promise a better customer experience for consumers at lower cost to merchants.

For the moment, open banking reality is some distance from this promise. A new study shows French banks rejecting 47% of payment transactions using their open banking APIs. “Is this the worst in Europe?” “ask the authors. “Far from it” reply the PSP’s. Portuguese banks are certainly worse. With standard bank API’s so difficult to use in many European markets, it’s no surprise that local schemes linked to SEPA Instant Payments such as iDEAL in Holland or Blik in Poland are prospering.

If the banks are to meet the challenge of producing better quality API’s they clearly need some help. Ozone API in London has raised £8.5m to commercialise its service that enables banks to offer open banking APIs.

The UK was first into open banking but, six years after the adoption of PSD2, the sector is having a long, dark night of the soul. As this good round-up demonstrates, there have been plenty of awards for open banking innovation but nobody is generating many transactions.

Ciaran O’Malley from Trustly posted a killer chart on LinkedIn which shows the extent of the commercial challenge for VRPs. In a two-sided market, there are few win-win scenarios.

Commercial Variable Recurring Payments

This is why the Payment Systems Regulator (PSR) is proposing that the country’s largest banks will be mandated to offer VRPs at zero Interchange for government, utility and regulated financial services. 

But at the last count, there were a remarkable 556 third party processors listed in the EU and UK together. This is certainly too many and it’s certainly time for a vendor shake-out. 

Crypto corner

One of the many reasons Bitcoin has not replaced fiat money is that cryptocurrencies are horribly insecure, often run by crooks and with a terrible customer experience. As Dave Birch put it, “no sane person wants to be their own bank.” 

Even though 2023 was a quiet one in crypto land, criminals still made off with $1.8bn worth of digital assets from unsuspecting punters, exceeded only by the $5.8bn of fines paid by crypto and fintech groups for lax anti-money laundering checks. Advances in quantum computing could quickly makes things worse as criminals learn to break encryption even faster. Caveat emptor.

The early hype around crypto set in train projects to launch central bank digital currencies (CBDCs). The Bank of England (BoE) received over 50,000 responses to its public consultation on the digital pound. Many of the concerns expressed were around privacy. The Bank promises that it won’t be able to see your individual transactions, but this won’t placate the zealots.

Any decision to launch Britcoin will be taken “around the middle of the decade” at the earliest but the BoE hasn’t answered the fundamental question of what a Central Bank Digital Currency (CBDC) is for. Neither does this video from the European Central Bank (ECB) shed much light on why anyone would want a digital euro rather than using Apple Pay.

The European Central Bank has begun tendering for some of the components of the digital euro. Worldline, Nexi and the EPI were involved in earlier prototyping exercises and will likely be bidding for the next set of contracts, valued at up to €1.1bn.

Research round-up

Cap Gemini’s payment trends for 2024 places real-time treasury and tokenisation in the top right quadrant. The consultants also see the card market growing in volume but losing share to A2A payments.

A summary up of 2024’s payment topics from the Finanz-Szene blog including wero, real-time bank transfers in Germany (at last) and the implication of TA 7.2 standards for payment terminals. A huge number of devices need replacing in Germany, notably the Verifone H5000s.

An Airwallex survey of SMBs highlights the embedded finance opportunities for payment providers. One interesting finding is that there is very little brand loyalty. 82% of merchants say they would change payment provider if their ISV offered a similar solution.

Chargeback 911’s annual Cardholder Dispute Index is always worth a read, if only to gasp at the average 5.7 disputes raised by each consumer every year in the USA.

35% of global eCommerce sales now go through marketplaces according to an absolute goldmine of omni-channel retail research available free of charge from RetailX. Retail CIOs themselves are planning major system upgrades to meet the needs of channel hopping consumers. This will likely trigger reassessments of their payment suppliers and is yet more bad news for incumbents saddled with legacy platforms.

In other news

UK retailers spent a whopping £1.27bn on card processing fees in 2023 and the British Retail Consortium is particularly annoyed about the 27% rise in scheme fees. The trade body is proposing that larger transactions should be charged as a fixed fee, not ad valorem; an idea likely to meet fierce resistance from the schemes.

Wirecard update – the stooge director of Wirecard’s (allegedly fake) Singapore operation claims he was paid $11,000 a month for signing documents he didn’t read. Nice work.

Your staff no longer need to waste time producing poor quality PowerPoint decks. The robots can make bad presentations too. Watch this demo where Microsoft Co-pilot creates a dull but entirely adequate deck in just 47 seconds. 

One key application of AI is to automate customer service but you need to keep an eye on your robots otherwise they may start thinking for themselves.  One AI chatbot working for DPD, a UK parcel delivery company with a mixed reputation, wrote a poem about how bad its employer was.

Where to find me

I’ll be moderating panel discussions at MPE in Berlin on 12-14 March and ePay Europe in London on 21 May. In between, you can catch me at Retail Expo in London on 24/25 April.

Alternatively, If you liked this newsletter, you can hear me guesting on Worldline’s Navigating Digital Payments podcast. .

Get in touch

Geoffrey Barraclough

geoff@barracloughandco.com

www.businessofpayments.com

Rubean looks an early SoftPOS winner

Geoffrey Barraclough1 Comment

It’s early days but Rubean looks like being one of the winners in the nascent European SoftPOS market. The German start-up has won a number of key partnerships including a major deal with Correos, the Spanish Post Office. Total user numbers have grown to 25K from just 6K at the end of 2022. 

Rubean’s main product is PhonePOS, a softPOS application which it offers as a hosted, whitelabel, product to banks, acquirers and enterprise merchants. SoftPOS is a downloadable software application that allows any Android device to accept card payments. Rubean charges its customers a monthly fee per user and a click fee per transaction. 

Rubean is based in Munich and listed on the local stock exchange. CCV, the Dutch payment gateway has a 30% stake. Competitors include Softpos.eu (Worldine), Rubean is based in Munich and listed on the local stock exchange. CCV, the Dutch payment gateway has a 30% stake. Competitors include Softpos.eu (Worldine),  Mypinpad, Phos (Ingenico) and Softpay.io which works with Nexi, Elavon and others.

Management says that sales rose to “more than” €1m in 2023 on the back of several new contracts. EBITDA losses were steady at €3.5m. Nuways, a broker, projects sales growing strongly to €2.9m in 2024 but suggests that fresh fundraising may be necessary.

Rubean’s strong customer list includes Correos, the Spanish postal service, the German Sparkassen, BBVA in a contract worth €1.5m, Global Payments/KBC Group in Hungary, Czechia and Slovakia and, most recently, eMerchantPay, a British high-risk acquirer looking to expand into low-risk POS business. 

Today, the bulk of Rubean’s sales are with two courier companies in Spain. Coreeos is equipping the handheld devices used by its delivery staff with Rubean’s PhonePOS application so that residents can pay any fees directly at the doorstep with their bankcard. NTT Data is the integrator. PhonePOS is also deployed with 5,000 drivers at GLS Spain, another logistics company.

Rubean has made a good start in securing some high quality customers. Profits could grow quickly as sales volumes rise but competition is fierce.

November 2023 Business of Payments newsletter

Geoffrey Barraclough1 Comment

The Business of Payments

Last month’s poor results from Worldline and Adyen have not set a trend. Nexi’s Q3 numbers came ahead of market expectations. Management said there was no sign of the slowdown in Germany which has so rattled Worldline’s shareholders. Nexi’s stock price is recovering nicely while Worldine is still bumping along the bottom.

Adyen bounced back after its plain-speaking Dutch management presented analysts with a more realistic assessment of the company’s growth prospects and promised a slowdown in the breakneck pace of new hires. Adyen’s Q3 revenue was up 22% and with the processor now targeting 50% EBITDA margins by 2026, significant cash profits are on the horizon.

The dilemmas faced by European legacy acquirers are well described in Nightmare on Acquiring Street, a new paper from PSE Consulting. This lays out the speed at which the market is moving to “gateway acquirers” such as Stripe, Adyen and Checkout, which offer a tightly integrated bundle of services operating over a single platform.

Source: PSE Consulting

Processors operating with old technology and without modern checkout and boarding tools are struggling. Barclays and Credit Agricole are the only banks remaining in the list of top European acquirers and both now recognise the need for change. Credit Agricole has announced a JV with Worldline and Barclays is exploring options for Barclaycard which could involve a sale or joint-venture.

As well as the impact of technology trends, European acquirers also need to contend with a profound shift in channel buying behaviour by small businesses, the most profitable customer segment. A new report from Flagship Consulting demonstrates the extent of the risk.

Source: Flagship Consulting

Independent software vendors (ISVs) and other platforms are now taking between 40% and 65% of new merchants signed in the US. This trend is coming to Europe and threatens banks ability to sell direct to SMBs. ISVs are demanding increasingly high commissions from the acquirers. Bain estimates that 90% of payment revenue is at risk of changing hands.

The impact on the ISV’s themselves is less well documented but these businesses are now finding they can generate up to half their revenue from commissions on payment processing. This is incentivising bad behaviour and we’re seeing incidents of market abuse where ISVs impose penalties for merchants that use 3rd party payment products.

Shopify, the leading eCommerce retail platform, charges a 2% surcharge if merchants don’t process transactions through Shopify Payments. And Lightspeed, a restaurant POS software vendor with over 10,000 customers worldwide, insists that all new customers take its integrated payments product. Those who don’t will be hit with a 0.5% transaction surcharge. 

This hasn’t gone down well in Canada where one restaurateur reported being charged $300 for using a competitor payment terminal. “It’s not illegal, but it’s unethical,” said the local business association. Lightspeed have now introduced a price pledge to match competitor pricing in any country. But it’s worrying that many ISVs are now treating their customers as hostages. This won’t end well.

Corporate activity

Advent, the US private equity giant has bought London-based MyPOS for $500m.MyPOS, which became a merchant acquirer last year, claims 170,000 mPOS merchants in 30 countries and generated €11m EBITDA in 2022 on revenues of €60m. Advent has bought MyPOS through a newly established “payment and technology platform” called Circle which will be chaired by Laurent Le Moal, ex CEO of PayU. Expect more deals to come.

Total Processing, a small but fast growing ISO based in Manchester, recruited Martin Gilbert of Revolut as a heavyweight chair just six months ago. He has wasted little time in arranging the sale of the business to Nomupay, the well-funded Dublin-HQ’d processor formed from the ashes of Wirecard. Nomupay is clearly one to watch. 

Tencent, the Chinese technology platform, has paid $100m for an 8% stake in Global Blue, the market leader in Tax Free Shopping, at a valuation of $1.25bn. The Tencent relationship will cement Global Blue’s position with high-spending outbound Chinese travellers.

Silverflow, the Amsterdam based payment orchestrator has raised €15m at a valuation “significantly higher” than its previous raise in 2021. The money will be used to support the company’s expansion into Latin American and the Far East.

Shift4 has finally closed the $525m acquisition of Credorax Finaro. The eighteen-month delay, caused by the presence of a sanctioned Russian oligarch on the Finaro share register, has given management plenty of time to plan the integration. The combined business has scale (c.$200bn volume), international reach and the capability in eCommerce which Shift4 has been lacking. 

AIB and Bank of Ireland have abandoned efforts to create a domestic money transfer app to compete with the runaway success of Revolut. The banks had spent a total of €17m on the project which was to be called Yippay (yes, really) but ran into regulatory obstacles. Nexi had been contracted to build the product.

The Irish banks may be better served joining the European Payment Initiative (EPI) which has completed its acquisitions of iDEAL and Payconiq. This gives the EPI a solid basis of technology and transaction flow on which to build a common digital wallet for all European markets.

New Shopping

We’re keeping a close eye on grocery. Shifts in supermarket payments can move the whole market. But not yet. The FT concludes that, twenty years after the debut of online groceries, shoppers still prefer buying food in real life. Despite the pandemic boost only 12% of UK groceries are bought online.

But in-store shopping is changing rapidly with the introduction of self-checkout, Smartcarts and autonomous stores.

Italy’s first autonomous store has opened in Verona. In contrast to many pilot implementations, this one is a large format Tuday supermarket. The technology, supplied by Sensei, a Portuguese start-up, can even detect variable weight items through an integration with the scales. Payments are from Nexi. Shoppers don’t need to use the app. They can pay at a standard POS if they choose.

Tesco is trialling a similar process at one UK store. Again, shoppers don’t need to use the retailer’s app. They just walk up to the checkout which will “magically present them with a list of the products they have picked up”. Shoppers can pay with a card in the normal way. The technology is from Trigo, an Israeli start-up already working with REWE, Aldi and Auchan and in which Tesco has a small stake.

A2Z, the Israeli start-up which is leading development of smart carts, announced the delivery of an initial order of 250 to Monoprix, the French supermarket. These carts contain sensors that automatically record your purchases. A2Z believes it will sell a total of 30,000 smart carts in France alone over the next three years through IR2S, its distribution partner.

There is a live debate about self-checkouts. It’s clear they can work well for small basket sizes but not for the weekly shop. Whether it’s using a handheld scanner or fixed self-checkout terminal, the process puts too much work on the shopper. 

Booths, an upmarket UK supermarket, has removed self-checkouts completely. The customers seem very happy.

In biometric news, PayEye, a Polish start-up which allows people to pay with an iris scan has launched a new range of hardware. Called eyePOS, the terminals include a special camera but also take standard payment cards. PayEye offers them for an introductory price of €11.25 per month.

Despite overwhelming consumer demand to pay at POS by tapping their mobile phone on the terminal, there are still some circumstances when a physical card is needed. One is the M6 toll road in the English midlands. The operator has annoyed tens of thousands of motorists by removing the ability to use Apple or Google Pay. The rationale? A Government dictat that it was illegal have a mobile phone in your hand while in control of your vehicle.

After a predictable outcry, the Government has conceded an exemption for making a contactless payment and the toll road systems will be upgraded for Apple Pay.

In-car payments

The toll road problem would be avoided if all motoring-related payments – parking, charging and fuelling – were brought together in a single app accessed from the car dashboard. 

Mercedes Benz has built its own payment service but Volkswagen is following a different approach of co-ordinating a set of partners. VW has launched “Pay to Fuel” for its Skoda brand working with Mastercard, Parkopedia and ryd, a German fintech that offers a pay-to-fuel app.

Meanwhile, VW has sold PaybyPhone to Fleetcor, a large US B2B payment company for $300m. PayByPhone, generates c.$40m annual revenues from its app which gives access to 4m parking spaces in 1,000 cities across Europe and North America. Payment volume was $900m in 2022, giving a very healthy take rate of 4.4%.

Fleetcor plans to expand the PayByPhone service to include EV charging and automatically buying fuel at service stations.

Product

Alcohol and cigarette vending machines are common in Germany, but age verification can be tricky. It’s  good to see Girocard, the domestic debit scheme, working with Feig, a leading vending machine supplier, to restrict sales to those old enough to buy the products.

Also in Germany, Bluefin has gained Giro certification for the TECS platform it acquired earlier this year and launched a white-label POS service for ISVs. Newland is providing the Android terminals. In other hardware news, ITCARD, a Polish acquirer with 90,000 POS, has started deploying Ingenico’s Axium terminals. This is positive news for Ingenico which has been very slow to market with a workable Android product.

One reason why Stripe is so popular, despite its high prices, is that it makes life easy for its customers. For example, you can now manage Klarna disputes from within the Stripe dashboard. Previously, Stripe merchants needed to deal with Klarna customer services via email.

It’s no surprise that Stripe can get its merchants to write great testimonials. Here’s the CIO of La Redoute, the giant French catalogue retailer, explaining why he chose Stripe as its global PSP/processor. “It has been an incredible and enjoyable journey working with Stripe’s team,” he says.      

Stripes’ platform strategy is sparking interesting innovation. Lopay is a UK mPOS provider built on top of Stripe’s APIs.  Lopay (the clue is in the name) undercuts SumUp and iZettle by charging just 0.99% for debit/credit transactions. It says it has signed 20,000 merchants in 18 months. Lopay charges 0.8% extra for instant settlement and says this is a very popular option. 

DeluPay is targeting a similar market in France with a solution based on QR codes linked to open banking transfers. 1,000 merchants have signed up to benefit from transactions free under €2 and 0.5% thereafter. If you understand French, watch the CEO get quite a grilling on this early morning business TV show. The presenters struggle with the consumer proposition and keep asking why they wouldn’t keep using Apple Pay or Paypal.

The Polish Post Office is looking to capitalise on the 10m users of its mobile app by adding InPost Pay as a checkout button for local web shops. Customers can then pay within the app using Blick, cards or cash on delivery.

Finally, take a look at Shop.app. This is a very impressive AI powered search engine that allows you to construct a basket across over 1m Shopify merchants. Payment through Shopify Payments of course.

SoftPOS

SoftPOS is a downloadable payment application that allows any Android device equipped with an NFC chip to take money on cards. This represents a clear threat to the terminal manufacturers who, together, ship over 100m units each year. Sunmi is the first to respond. It’s latest Android hardware range includes a low-cost terminal designed for SoftPOS and shipped without a PCI certificate.

I think SoftPOS will make a quicker impact in the enterprise market than for micro-merchants. For example, Alaska Airlines is working with Stripe to allow 7,000 crew members to accept contactless payments for food and drink using their airline issued iPhones. This should speed up in-flight service. 

Symphopay, a Romanian POS payment gateway has sold its SoftPOS application to Raiffeisen Bank. The solution is already deployed at 880 easybox lockers of Sameday courier company.

Dotykacka, the Czech retail and restaurant software provider with over 20,000 merchants, has launched SoftPOS  in the Czech Republic and Slovakia. The solution is from Softpos.io, a Danish start-up with Nexi providing the processing.

MyPOS has launched SoftPOS in the UK with merchants paying 1.6% + 7p per transaction and no monthly fee. I think it’s a mistake for vendors to forgo a standing charge as there’s a high risk of attracting large numbers of merchants that never make any transactions.

The steady rollout of Apple’s Tap to Pay as an alternative to Android has reached France. Group BPCE, Adyen, myPOS, Revolut, SumUp, Viva Wallet and Wordline are offering the product at launch. 

Open banking

The latest Open Banking Impact Report shows UK open banking payments doubled compared to 2022 and now running at £4.5bn a month, still small modest compared to c.£65bn on cards and c.£110bn on direct debits.

There are now 45 open banking payment providers in the UK. This is probably rather more than the market needs and many vendors must be wondering they can stay in business long enough to reach break-even.

Who is going to consolidate the overcrowded open banking market? The CEO of Go Cardless, a very well-funded UK direct debit specialist, said it would likely be making acquisitions. Go Cardless already bought Noridgen, a Latvian open banking provider earlier this year.

If open banking payments are going to become mass market, vendors need to provide a superior customer experience to cards. One good example is William Hill, provider of online gambling and sports betting, which will be offering open banking for both pay-ins and pay-outs. This is a sector where bank transfers offer clear advantages over cards, notably the ability to pay winnings instantly. Truelayer is providing the technology.

If the industry doesn’t move quickly, the tech giants will drive the market forward. 

Apple has started using open banking to offer iPhone users the chance to view their bank balance and transaction history before confirming an Apple Pay transaction. Although it would be a small additional step for Apple to start directing Apple Pay transactions over open banking rails, it may be reluctant to lose the 0.15% commission it charges card issuers today.

Cash

We’ve covered the rip-off fees from many ATMs in tourist locations before. Honest Guide (1.3m subscribers) explains the scandal better than we can. Euronet doesn’t come out well.

With the debate raging about whether merchants should be obliged to accept cash, it’s good to see merchants playing an active role for or against. This sign was spotted by Chris Higham in Newcastle.

Image preview

And which button would you press in this Las Vegas taxi?  Photo from Booshan Rengachari.

No alternative text description for this image

In other news

French railways has introduced ticketless transit based on contactless payments for regional trains. This is a wonderful idea which should be adopted by all transit authorities everywhere.

Farewell Dotpay. The pioneering Polish eCommerce gateway was acquired by Nets Nexi in 2018 and its brand is now folded into Przelewy24.

Klarna management has averted a strike by conceding a collective bargaining agreement with its workers. Its CEO didn’t handle a subsequent all-hands call very well, likening union reps to the corrupt pigs in Animal Farm.

CAB Payments has been one of the least successful IPO’s of 2023 with shares down 80%. The FT explains why.

French authorities have levied €414m fines on four Meal Voucher providers for anti-competitive practices in this €6bn market. This is very profitable business – the providers charge 2.5% to the employers and 2-5% for the restaurants.

BCG reports that eCommerce growth, which slowed sharply as real life returned after the pandemic, has now returned to its longterm trend.

If you watch one video this month, check out this US start-up’s application of AI to wearable technology.

One of the rare European banks making a success of payments is Santander whose Getnet unit is now number two merchant acquirer in Latin America.

What??? Nearly 1% of the entire US GDP goes through Delta Airline’s American Express card, generating $5.5bn annual revenues for the airline.

Two slices of archive magic from the BBC. The Future of Credit Cards (1986) and the Future of Banking (1968).  

And finally

Accounting for inflation, this is spending a penny in an Irish toilet. JustTip is providing the attendant service. Spotted by Rónán Gallagher.

A white rectangular device with a screen on it Description automatically generated

Where to find me?

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

Get in touch

Geoffrey Barraclough

geoff@barracloughandco.com

www.businessofpayments.com

Worldline Q3 – solid revenue growth, buys into softpos and marketplace payments

Geoffrey BarracloughLeave a comment

Worldline’s Q3 update provided another very solid set of results demonstrating continued progress towards its objective of building “a premium global Paytech at the heart of the European payment ecosystem.” Revenue is growing nicely, bolt-on acquisitions are filling product gaps and the sale of the Ingenico hardware business brings capital firepower to compete with Nexi and others for merchant portfolios as they become available.

Total revenue increased 20% in Q3 to €1.158bn although the company prefers to quote a rather lower figure of 10% growth, excluding currency and acquisitions. This is sensible expectations management although an American business wouldn’t be so modest. Forward guidance is 8-10% organic revenue growth.

Originally spun out of ATOS, primarily as a back-office processor, Worldline has reorientated itself. Merchant services now account for 72% of group revenue, up from 66% a year ago. Merchant services revenue is the powerhouse, growing 30% in Q3 to €828m or a still impressive 14% excluding acquisitions and a positive exchange rate boost from the strong Swiss franc. Worldline cites market share gains and volume growth. 

Payment volumes grew 17% year on year to €90bn and stand 33% higher than 2019. Growth is broad-based; in-store volume was up 16% and online volume up 23%. Q4 is reported to have begun “still in a very solid trajectory.”

Q3 highlights include a rebound in tourism which boosted travel and hospitality verticals and contributed to a strong performance from DCC. Client wins included Lufthansa Group which will make use of Worldline’s TravelHub solution which “brings 150 payment methods, multi-acquiring, tokenisation and a range of fraud services through a single connection.”

In contrast to merchant services, Worldine’s two other business segments look underpowered, growing sales well below inflation. Financial services revenue increased just 1.5%. Worldline is under sustained price pressure from its large banking customers.

The sale of the Ingenico terminal business to Apollo has finally completed. This brings €1.4bn extra capital which Worldline is likely to spend on further acquisitions as it consolidates the European merchant services market in competition with arch-rival Nexi. The Apollo deal comes with a five year partnership agreement which is likely to commit Worldline to continue selling Ingenico terminals to its banking and merchant customers. An extra €0.9bn is available subject to performance. 

Wordline made two important product acquisitions in Q3. 

  • Marketplaces – a 40% stake in Online Payment Platform (OPP), a Dutch payment gateway which boasts over 100 marketplaces and platforms as customers including eBay Kleinanzeigen, Marktplaats and Royal FloraHolland. Marketplaces account for about one third of European online payment volume today but require specialist support. OPP has sixty staff and its product set includes fast merchant onboarding, split payments, pay-outs, virtual IBANs and dispute management. Worldine has a call option to buy the remaining 60% in 2026.
  • SoftPOS – Worldine has bought a 55% stake SoftPOS, a very well regarded Polish softpos vendor which launched in 2019. Softpos is an existing Worldline partner but is also working with ING in Poland and Romania as well as Credit Agricole in Poland. The latter is through an arrangement with Elavon. It’s not clear whether SoftPOS’s current banking partnerships will be negatively influenced by the stronger Worldline relationship. Worldline has the option to take full control in 2024. 

The SoftPOS capability forms the basis for new product called Worldine Tap on Mobile which is aimed at all merchant segments but also as a white label through partners. For example, Worldine is making Tap on Mobile available on Zebra’s range of handheld devices. Zebra is a giant in the world of enterprise devices with over 10,000 channel partners globally. Many of these are ISV’s that will be interested in providing merchants a bundle of Zebra hardware, Worldine payments and their own software application.

SoftPOS has many transformational use cases but the one chosen for the launch video is not one of them. In this scenario, softPos makes life more difficult for both merchant and customer.

Tourists and SMBs boost Nexi

Geoffrey BarracloughLeave a comment

Nexi reported strong growth across all markets as Europe’s economies bounced back from last year’s Covid lockdowns. Payment volume was up 18% overall powered by resurgent spend in travel and tourism with a particularly strong transaction flow from foreign cards used in Italy.

The geographical performance was mixed. Payment volume was up 13% in DACH, 18% in Italy and an impressive 33% in the Nordics. Italy – Nexi’s home market – accounts for 57% of the total.

Merchant Services and Solutions is Nexi’s largest division – just over half of total revenue – and sales grew 16% to €431m. The detailed picture was far from uniform. For example, SME’s outperformed corporates and eCommerce growth was restrained by recent standards.

Within Merchant Services and Solutions, SME volume grew 38% with DACH and Poland notably strong. The terminal base grew an impressive 150K year on year and we can see the emerging outlines of a good, better, best product strategy featuring:

  • SoftPOS – recently launched in Hungary (in-house developed by Nexi, distributed by Unicredit)  and a Nordic version working with Softpos.io. An Italian launch is in preparation
  • Smartpay – commercialised by Concardis in Germany, a simple SME proposition to accept Giro and international cards with a PAX A920, online sign up and nice digital portal 
  • SmartPOS – a more highly configured SME terminal with an associated app store provided by Poynt which will be attractive to larger merchants and ISVs

eCommerce volumes grew 19% with attention drawn to the launch of Nets Easy – a simple proposition of payment gateway, reconciliation and payouts under a single contract. Large and key account volumes grew 17%.  An interesting detail was that SoftPOS for retail and hospitality “showing good progress” which backs up the growing consensus that micromerchants will not be the primary target for this new technology. Significant partnerships were announced with Global Blue (hospitality and retail) and Zuora (subscriptions). 

Like its competitors, Nexi is expanding its footprint through acquisitions and seeking synergies through platform consolidation. Three acquisitions are expected to close in the second half of the year totalling an additional €22bn volume:

Like every other processor, Nexi is increasingly focused on ISVs as a distribution channel and showcased a new partnership with Microsoft in which it becomes preferred European digital payment partner of the American software giant. This looks like a quid pro quo for Nexi selecting Microsoft Azure to accelerate its platform consolidation. In other ISV news, Nexi has taken full control of Orderbird, a Berlin-based restaurant ISV in which it inherited a minority stake from Concardis in a deal estimated at c.$140m. 

Merchant acquiring fuels Worldline’s growth

Geoffrey BarracloughLeave a comment

Worldine’s H2 results underlined how much progress the Paris based organisation has made towards establishing itself as “as a premium global Paytech at the heart of the European payment ecosystem.” Originally spun out of ATOS,  primarily as a back office processor, Worldline has reinvented itself. Merchant services now accounts for 68% of group revenue. 

Payment volume was up a very impressive 30% in H1 to €177bn as the impact of new acquisitions kicked in. The positive result  was also “reflecting the widespread and rapid shift towards digital payments.”. Organic growth has been positive too and Worldline is adding roughly 10,000 new merchants each month split pretty evenly between in-store and online. Total merchant count now exceeds 1.2m. 

Revenue from merchant services grew 16.8% “fuelled by steady growth in commercial acquiring across all geographies and customer segments” with acquiring growing faster than its payment acceptance or digital business lines. Acquiring delivered “strong double digit growth trending towards 30% with almost all geographies and customer segments contributing…. and a strong performance from DCC products and the positive impacts from strong holiday period boosting the Travel and hospitality verticals.” Much lower growth – mid to high single digits – was reported from payment acceptance (mainly payment gateways and managed POS terminals) and digital services.

The wholesale business fared a little less well as a number of ex-Equens contracts were renewed on less favourable terms although Worldline did re-sign Credit Agricole for a new five year deal, And it started working with AEGON Bank for SEPA instant processing. Overall, higher authentication volumes related to SCA compensated for lower iDeal volumes in the Netherlands.

Highlighting Worldine’s ability to win new bank partnerships, three big acquisitions closed in the half year.

  • Greece – acquired an 80% share of Eurobank’s merchant acquiring business in Greece which brings a 21% market share including 123,000 merchants with 190,000 POS terminals, 219m transactions and € 7bn of payment volume. This acquisition complements Cardlink, the leading Greek network service provider (NSP) which Worldline bought last year for an enterprise value of €155m. The vertical combination of NSP and acquirer under common ownership is likely to accelerate consolidation of the fragmented Greek retail payment market which has recently become the focus of much international investment. 
  • Australia – went live with its joint venture with ANZ. Worldline holds 51% of the new business which brings 80,000 merchants and 2bn transactions pa. Worldine has pledged to spend $22m AUD to localise its platforms for Australia.

Beyond banking, Worldine announced a slew of large merchant wins and new distribution partnerships. These included retailers such as JD Sports and Jysk but also high-risk merchants in the travel sector – TUI Cruises and Iceland Air. New partnerships include Planet Payments (DCC and tax free shopping) and Casio (integrated payments in Japan). More interesting for the future, was the launch of a new Softpos product in Belgium working on the Softpos.eu platform. Worldine has been working with Softpos.eu – a very well regarded start-up – in Poland since 2020 and clearly now sees the proposition as ready for international roll-out.