Fintech is kicking off the second quarter with some fresh news and new milestones. Two months after Fiserv Incorporation bought First Data Corp for U.S $22 billion, Fidelity National Information Services shared its purchase of Worldpay for $35 billion. A new historical moment for the fintech industry.
While mobile payments are trending this year and forecasts show that consumers will gradually consume only from their mobile phones, it seems that investors and venture capitals are investing more in more in payment solution startups.
This also means that news IPOs on their way, while investors are rejoicing as the shares value have gone up after the announcement, earlier on this week. This is the biggest acquirement in the paying services industry ever.
E-commerce takes the lead
FIS agreed to acquire Worldpay for $34 billion, marking the biggest deal ever in the international payments sector https://t.co/s095QamT8a pic.twitter.com/CZljCBtQeD
— Bloomberg TV (@BloombergTV) March 18, 2019
While some experts have bet on digital currencies, other have asserted that payments services are the safest – and most promising – investments this year. It seems that the second might be right.
Two months after a record-breaking M&A when Fiserv Incorporation bought First Data Corp for U.S $22 billion, Fidelity National Information Services set new records by buying Worldpay for U.S $35 billion.
According to Techcrunch, Worldpay makes “40 billion transactions worth some $1.7 trillion annually through 300+ payment options and 120 currencies”.
On the other hand, Bloomberg reported that Worldpay shareholders were very pleased. They all received “$11 a share in cash and 0.9287 of a FIS share, which was worth a combined $112.12 as of last week’s close. That was 14 percent more than Friday’s closing price for Symmes Township, Ohio-based Worldpay. Including Class B shares and warrants and options, the deal has an implied equity value of $35.5 billion.”
As a result, Worldpay shares went up from 9.8 percent to $108.38 in New York, after trading as high as $112.
on @EcommercenewsEU : #eCommerce in Germany is forecast to be worth €58.5Bn by the end of 2019. This would mean an increase of about 9%, and €5Bn, compared to the situation at the end of 2018. https://t.co/Y6Ana8LtvT pic.twitter.com/fPPKoiLa1G
— Ragalie Petrica Dan (@RagaliePetricaD) March 19, 2019
Worldpay has been recognized by professionals for being one of the most efficient payment solutions. One of its strongest unique selling points is guaranteeing safe transactions as well as operating with alternative payment methods.
The American company was spotted early on by professionals for being flexible, along with an ever-changing e-commerce landscape. E-commerce business have bloomed for the past years and merchants have been looking for safer way to make transactions.
Just for the year of 2019, experts bet on an increase of e-commerce companies by nine percent in Germany. Indeed, e-commerce is estimated to be worth $58.8 billion by the end of this year.
Focusing on new technologies
One of the critically-acclaimed strategies of WorldPay was to be able to align with the flourishing successful companies: from virtual reality, to augmented reality, it managed to give forecast on trends and consumers’ behavior to their clients.
Worldpay has some interesting customers. pic.twitter.com/5Z3fqpHPXj
— Darth@Ripple Ⓥ 🇺🇸 (@RippleDarth) March 20, 2019
As a result, the company was spotted by many professionals for having useful insights on specific markets that are forecasted to become tomorrow’s leading sectors.
This includes the retailing industry, focus on developing countries, solutions for politically-challenged territories – including Brexit, as well as 2019 predictions in partnership with 2019.
These precious data caught the eye one of the GAFAM only a few days after the buyout. A leaked tweet (see above) was showing existing customers, it looks like many major companies have already used its services, including Amazon.
Next: a partnership with Amazon
With all these precious insights, Amazon offered to WorldPay to partner on Amazon Pay, in order to encourage merchants to use its own payment technique.
As Amazon has developed a new strategy for merchants, where small business would have to pay more fees to keep their visibility on the marketplace, WorldPay has agreed, only two days ago, to design a new payment service product for the biggest digital marketplace in the world.
Patrick Gauthier, VP of Amazon Pay, told TechCrunch that the initial “focus is on the connected experience, and we are leaning into other kinds of connected devices” he said.
From what the news website gathered, this product currently under construction could enable “buyers an option to select from a list of active addresses and payment options that they will already be using to buy on Amazon”, as “its particular set of data is already widely used, and therefore more likely to be used again.”
While retailers are hoping to increase their sales thanks to this new technologie, experts have also pointed out that Amazon only represent five percent of online sales in the United States – while the other 95 percent are still developing new technologies.
It seems that FIS has still some work to do to develop WorldPay’s potential – including new prospection outside of the traditional “Gafam” box.