Apollo wants to create a new payment software heavyweight

Posted Feb 21 2022 at 06:31 PMUpdated Feb 21. 2022 at 18:43

Will Worldline create its future competitor? By giving the keys to the Ingenico payment terminals to the American firm Apollo, the French group has a good chance of coming across Ingenico teams again on its way. Because where others see terminals as an industry in slow extinction, the private equity giant intends to create maximum value.

From the old French technology of the 1980s housed in plastic cases, which is used to interconnect the card with the banks, Apollo wants to make a heavyweight of the “soft”. For this, the American fund wants to capitalize on an asset that the young Sump’UP and iZettle do not have: historical entry points and millions with traders.

More than 14 million terminals are shipped each year, according to figures from Worldline’s 2020 annual report. “Apollo bought more of a customer portfolio than a payment company,” whispers a connoisseur.

Accelerate service development

In the meantime, the new shareholder of the Worldline division (TSS) wants to accelerate the development of services around pay-as-you-go payments, such as accounting analysis or marketing operations.

The two professions are already very distinct within TSS. Research and development is concentrated in France where the head office is located, while the manufacture of terminals is outsourced to Asia.

The technology on which it has built its leadership is today being overtaken by solutions mainly based on software. A first regulatory change has allowed companies like iZettle or SumUp to find a place for themselves with small merchants, thanks to their low-cost terminals, connected to the cloud.

Android terminals

But a new revolution is already underway: that of Android terminals, which will eventually allow any smartphone to become a payment terminal. Signing the end of hardware security, on which Ingenico has established its domination.

This technology attracts both young shoots like the French Smile&Pay or Yavin – which is to announce this Tuesday a fundraising of 5 million euros -, new players like the Chinese PAX which is starting to make its mark on the market. world, but also technological giants: Apple will launch within a few months its own solution to transform an iPhone into a terminal.

What accelerate the advent of this technology and, thereby, reduce the life expectancy of older generation terminals. However, Ingenico still has time ahead of it: “Paradoxically, we have never sold as many conventional terminals as today, explains a player in the sector. Merchants are looking to equip themselves to respond to the deployment of digital payment, but Android terminals (softPOS) are still marginal. »

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