Payments: “Consolidation remains more than ever at the heart of Worldline’s strategy”

Posted on Jan 27, 2021 at 7:44 am

These days, few manufacturers are able to talk about 2021 with ” great confidence ”, Despite the persistence of the crisis. Gilles Grapinet, the boss of the European payments giant Worldline, does not hesitate. Even if he shows ” lucidity ” and of ” caution “.

It is impossible for him to hide that the current crisis is playing in favor of his profession, digital payment. ” This crisis, which is putting our economies to the test, we can clearly see that it is driving accelerations in payment, he explains in an interview with “Echos” via Zoom from his home. Usually, in the everyday payments industry, habits change slowly. During the crisis, it took only a few weeks for consumers to adopt contactless card payment at 50 euros, whereas it had taken three years to reach significant volumes on the range ranging from 20 to 30 euros. It’s a real break.

The pandemic is amplifying digital payments

And if the closure of stores, caused by lockdowns and curfews weighed on Worldline’s activity, the massive development of e-commerce is also a source of hope for the growth of its industry. ” Not only have some consumers started to use e-commerce when they hadn’t done so before, but small retailers, too, realized that they too needed e-commerce solutions to keep part of their turnover. “It’s simple, according to him:” The digital payment industry has gained between three and four years compared to the transaction volumes that there would have been without the Covid-19 crisis.

However, at present, cash remains the most widely used means of payment by Europeans. In addition, in France in particular, “ it is still the banks that capture most of the transaction flows », Underlines Angelo Caci, director of the consultancy firm Syrtals Cards. ” In France, we still have room for improvement », Recognizes Gilles Grapinet.

The challenge of integrating Ingenico

In October, the group nevertheless completed the largest acquisition in its history with the French Ingenico, world leader in payment terminals, for 7.8 billion euros. This is why Gilles Grapinet is impatiently awaiting the end of the crisis. ” When the stores reopen, we will benefit from increased exposure thanks to Ingenico as well as the synergies that we are already realizing. », Says this relative of Thierry Breton, of which he was chief of staff at the Ministry of Finance then right-hand man at Atos, the former parent company of Worldline.

This consolidation strategy is one of the keys to the success of the payments specialist, who makes on average one acquisition every two years. Since its IPO in 2014, it has enabled it to multiply its turnover by 5 (to more than 5 billion euros in 2020), its workforce by 2.5 (to 20,000 employees) and its market capitalization by 10 (to 20 billion euros).

Gilles Grapinet even assures us that knowing how to integrate new companies is neither more nor less “ the second business of his group “. ” In our industry, the strategy is simple: since the payment industry is used to circulate money, when money changes scale, the industry must also change scale., he explains with reference to the arrival of the euro. It’s the execution that makes the difference.

The history of Worldline shows some experience in this area, recognizes a professional in the sector. But Ingenico is a big chunk. The group had itself made a dozen acquisitions previously. We will have to do a lot of work on synergies and harmonization, because the two groups already have a lot of services in common.

Despite this challenge, Worldline does not want to stop along the way as its Italian competitor Nexi has just announced in quick succession its merger with its domestic rival SIA and then with the Dutch Nets. The two groups are now competing for first place in Europe, but remain smaller than their American competitors. ” Consolidation remains more than ever at the heart of Worldline’s strategy, insists his boss. Our vocation is to complete our pan-European presence. The group which joined the CAC 40 last March is not yet present in Spain, Poland, Italy or Portugal.

Eyes on the next operation Gilles Grapinet is already eyeing the banks, like his latest operation: the takeover in early December of the payment plant of the Australian bank ANZ. ” We are increasingly called upon by banks who understand that a partnership between their brand, their distribution power and the technology, speed of execution and economies of scale of a pure player like Worldline is a winning model. », He assures, without commenting on the advisability of such a transaction with Natixis, which had discussed in the past a merger with Ingenico.

There are still several bank payment entities / BUs / factories that could be sold one day or another to a player like Worldline, comments Angelo Caci. In France, it is more the exception than the rule because the banks are very attached to it. But in Europe, there have been many precedents. Worldline is not alone in the running and its competitors are on the lookout. Among them, the other European giant created around the Italian Nexi. But also a number of fintechs such as the Dutch company Adyen and the American Stripe, whose valuations have literally exploded in recent years, driven by the boom in e-commerce.

To give itself financial leeway, Worldline could consider reselling Ingenico’s payment terminal activities, for which it has begun the strategic review.

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