November 2023 Business of Payments newsletter

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.


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 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 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, 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.


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.

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

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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.

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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

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

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

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 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

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 platform. Worldine has been working with – a very well regarded start-up – in Poland since 2020 and clearly now sees the proposition as ready for international roll-out.