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May was an exciting month for the payment industry, with several mergers reshaping the business landscape and causing waves across the financial sector as it shifts towards electronic and online payments.
SIA Expands into Central and Southeastern Europe
Italy's SIA has acquired some of First Data's card processing businesses, bringing parts of Central and Southeastern Europe into its fold, all for a price of €375 million.
This purchase, expected to close in Q3 2018, is set to position SIA as a leading player in the region, with 13.3 million payment cards and 1400 employees coming over from First Data.
is a clever investment for SIA, with said businesses garnering up to €100
million in 2017 alone. It is also another step towards SIA's aim of becoming
the Europe's leading independent digital payments platform as well as
positioning itself as an innovative partner to businesses in both Europe and
Czech Republic, Greece, Hungary, Romania, Serbia and Slovakia are the countries
where customers are expected to benefit from the merger, with an expected rise
in payment transactions of over 11% per year over the next three years.
When asked about their expectations, SIA replied that revenues are projected to increase by around 18% and that a significant surge in income from outside Italy is expected, rising from 20% to 33% percent.
Worldline Buys Out SIX Payment Services
Another consolidation comes from France, with Worldline's buyout of SIX Payment Services to the tune of $2.75 billion.
The purchase involves both shares and a significant cash component of $333.59 million and provides SIX PS with an enterprise value of €2.30 billion and a 27% stake in Worldline. Atos is expected to retain its 51% majority stake.
In a public statement, Worldline CEO Gilles Grapinet emphasized that the merger
improves Worldline's position in Europe and advances its aim of becoming a
global leader of the payment industry.
SIX Chairman Romeo Lacher believes that further consolidations are ahead
as the domestic market breaks up. Recent takeovers, including the 2017 takeover
of Nets by the US-based Hellman&Friedman, are a further indication of
mergers to follow.
Good news for small businesses: PayPal to Buy Swedish Startup iZettle
The online payments giant PayPal is preparing to buy the Swedish online commerce startup iZettle for $2.2 billion. The deal comes just as the startup, already handling retail transactions for almost half a million merchants, was preparing to make its stock market debut. iZettle expects to handle around $6 billion in transactions this year alone, with a gross revenue of around $165 million, and is projected to reach profitability by 2020.
This is set to be the biggest acquisition so far for PayPal and is expected to be especially beneficial to small businesses' payments in Europe and Latin America.
The merger is described as combining shared values and culture as well as assets and expertise of PayPal and iZettle. The aim, according to iZettle CEO Jacob de Greer, is to "(...) allow us to deliver even more value to small businesses to help them succeed in a world of giants".
PayPay CEO Dan Schulman stated that "small businesses are the engine of the global economy and we are continuing to expand our platform to help them compete and win online, in-store and via mobile."