daniel stewart & company · izettle, payleven, shopify and shopkeep, to name just a few, have...
TRANSCRIPT
14 January 2016
Sector Research
Simon Willis +44 (0)20 7776 6573 [email protected] Sales Team +44 (0)20 7776 6550 [email protected]
‘The payments industry continues to evolve through a once-in-a-generation shift in
the way people pay. Consumers are demanding faster, safer and more convenient
payment mechanisms. Regulators are pursuing an agenda of innovation and open
access to payment infrastructures.’
Vocalink 2014 Report & Accounts (UK banks/building society owned company behind
Bacs, Fast Payments, Paym and Zapp)
The payments industry is currently undergoing a dramatic change in the way
consumers and businesses pay for goods and services, as the Vocalink quote above
highlights.
New products and services are appearing on a daily basis.
Over the last 12 months or so tech giants Amazon, Apple, Google and Samsung
have all launched payments products.
First Data, PayPal, WorldPay and Square have all IPO’d, while, even as we write,
two US payment majors look set to join forces via Global’s proposed acquisition of
Heartland. Early-stage companies such as Stripe, Square, LevelUp, Dwolla, Klarna,
iZettle, Payleven, Shopify and ShopKeep, to name just a few, have emerged, and
continue to emerge, challenging more established peers both in core payment
facilitation and value-added-services at both the online and offline point-of-sale.
Recent changes have been driven, to an extent, by the advent of smartphone
technology and near field communications (NFC), but disruption is about far more
than just contactless payment. It is about:
payment companies being able to facilitate payment across all channels
seamlessly (‘omni-channel’);
incumbents competing with the increasing ability to deliver existing products more
cheaply due to technological change (both hardware and software);
new business and revenue models, as new payment players seek different and
disruptive (not necessarily new – e.g. ACH) ways to deliver payments, and
monthly-pay SaaS/PaaS models for merchants emerging to replace more
restrictive contracts.
More particularly, from an economic and investment perspective, it is about the
weight of investment that has come into the market from existing players, new,
venture capital-backed, companies, and, most importantly of all, the large consumer
techco aggregators, looking to play a significant role (Facebook, Amazon, Google,
Apple and very possibly companies we have never heard of), potentially driving down
payment returns as they look to global consumer and business spend as their
ultimate target and see payments as a key point of control, a core service that they
need to offer to address that target.
This note is divided into two sections.
The first section is designed to give an overview of the payments industry as it stands
at present and to look at some of the drivers behind the current rapid evolution of the
payments landscape.
In the second section, we give a profile of a selection of the major payments
companies.
The global non-cash payments industry is huge and continues to grow rapidly.
However, it is undergoing significant disruption and likely there is more to come.
Per Boston Consulting Group (BCG), banks handled $410 trillion in noncash
transactions in 2013, more than five times the amount of global GDP.
The value of noncash transactions is expected to reach $780 trillion by 2023, a
growth rate of 7% p.a.
The size of the addressable market and the rate of growth means that, for well-
positioned companies, the scale of the available opportunity is also huge.
In 2013, payments businesses generated total revenue of $1.1 trillion.
Payments revenues are expected to reach $2.1 trillion, growth of 8% p.a. by 2023.
Per the Capgemini and RBS World Payments Report for for 2015, the global non-
cash transactions market saw 357.9 billion transactions in 2013, growth of 7.6%
which was in line with growth of 7.4% p.a. between 2009-13.
While cash remains overwhelmingly the dominant form of payment, card payments
have continued to gain market share to around 60% of the total. E-commerce
payments are converging with mobile payments which are taking off. Digital
currencies and blockchain technology, which could, possibly, redraw the landscape
once again, sit on the horizon, though digital currency does face a number of issues.
Of these, one of the most notable is an insurmountable hurdle for so many payment
initiatives: the oft-cited ‘chicken-and-egg’ scenario: if insufficient consumers use a
payment method, merchants won’t accept it, and vice-versa.
Mobile payments look set to be instrumental in redrawing the payments landscape.
To be clear, we define mobile payments as a general term applying to buying things
via a mobile device, as opposed contactless mobile payments, or ‘mPay’ where the
mobile phone is a ‘de facto’ payment card.
Between 2011-15F, Capgemini expects that M-payments will have grown at 60.8%
p.a. and, at 47.0bn, the volume of transactions is expected to have overtaken e-
commerce transactions by the end of 2015.
The mobile payments market in terms of phones and tablets remains in the early
stages of exponential growth.
In terms of contactless mobile, ‘mPay’, the next generation of product has already
arrived in the form of wearables and accessories, notably Apple Watch, the Swatch
smartwatch in China, the FitPay and Connectedevice for PebbleTime and the
TopShop x bPay accessories range for fashion retailer TopShop in the UK.
New entrants have undoubtedly lowered barriers to entry in the payments space and,
to a degree; have started to redraw the landscape of the industry.
On one level, there is good reason to believe that profit margins of large incumbent
players could be under threat, as witnessed by the introduction of the Single Euro
Payments Area (SEPA) and the regulation of interchange fees in Europe which BCG
estimates could lead to a loss of EUR 8 billion of revenue annually beginning in 2015.
However, at the same time, it is clear that the big incumbents have to date been able
to replicate or work around apparently new products, helped by their huge resources.
However, in the medium term, we expect to see margin erosion.
Clear winners in the value chain would appear to include the consumer and, perhaps,
the merchant, as prices are driven down.
A significant number of products have been launched which rely on packaging
together other suppliers’ products, where the apparent ‘uniqueness’ is based purely
on the way the platform is constructed. If such companies do not have a meaningful
customer base, it is often difficult to achieve traction. By contrast, the central reason
why companies such as Apple, Google and Amazon have a potentially key role to
play is not simply attractiveness of their products but also the scale of their existing
customer base.
We are by no means saying that the disruptors will have things all their own way. The
recently-IPO’d First Data, for instance, provides a good example of a major
incumbent which has re-invented itself by creating additional revenue streams.
We can identify a number of additional revenue streams:
Additional products: Klarna, the Swedish e-commerce payments company, is able
to offer credit to US consumers without a credit card – by entering only their email
and zip code;
New markets: First Data, the leading US payments processor, has used its EMV-
friendly Clover product to launch The Station, a till replacement screen, in 2013 to
the SME market and over the past year has rolled out Mobile and Mini versions;
Marketing and advertising revenues: as exploited by Facebook and Google;
Data Analytics: this has become a key value creator and, for some, a panacea.
Again using First Data as an example, it has partnered with Palantir Technologies
to develop the Insightics product and Levelup using predictive modelling to batch
forecast payments; and
Operational products, such as inventory and accounts, as launched by
Intuit/Quickbooks.
There are a number of other key issues facing the industry which we also address:
The US & the EMV liability shift – the US has lagged other markets in the adoption
of chip & pin technology (EMV). Driven by a desire for improved security, with
effect from October, merchants now shoulder the burden for security fraud if they
have not adopted EMV technology;
Barriers to Globalisation – the rate of growth developing markets offers a huge
opportunity but protectionism as well as cost could prove a barrier to companies
looking to take advantage of this;
Blockchain technology – the travails of Bitcoin have created something of a false
start but it is clear that major banks and regulators around the world are now
taking blockchain technology and digital currencies seriously as a potential game-
changer for financial services; and
Regulation – in common with other areas of the financial services industry, the
payments space is experiencing increasingly complex regulation.
Square Register allows individuals and merchants in the United States, Canada, and
Japan to accept offline debit and credit cards on
their iOS or Android smartphone or tablet computer. Square’s point-of-sale stands in
stores, were used to process $23.8 billion in transactions last year. Square has also
partnered with Snapchat to offer an instant friend-to- friend payment messaging
service (launched in 2014). Square listed on the NYSE on 19th November 2015.
PayPal, which was spun out of Ebay and IPO'd in July 2015, is one of the world's
largest internet payments companies. It operates as an acquirer, performing payment
processing for online vendors, auction sites and other commercial users, for which it
charges a fee. The company also provides a PayPal Here credit card reader, used as
an add-on for mobile device payments.
Apple’s mobile payments and digital wallet service enables users to make payments
via their Apple devices. It also enables users to make payments at contactless point
of sale. Launched in the US in October 2014 and the UK in July 2015, it has
agreements with most major banks.
Works in a similar manner to Apple Pay, seeks to replace POS card sales with the
use of a smartphone. Uses a Magnetic Secure Transmission technology, this is more
technologically advanced than Apple’s use of Near Field Communication (NFC)
methods and may move them ahead of their rivals in the long term.
Replaces Google’s previous Google Wallet system, and allows consumers to make
purchases at point-of-sale using NFC technology, as well as pay for in-app
purchases on Android devices.
Due for release by July 2016, Chase have signed up a number of Apple Pay users
and signed deals with Walmart, Best Buy and a number of other major US retailers.
Customers are able to complete payments directly on their Apple or Android devices
through the Chase Pay or alternatively through the CurrentC app.
Source: Google Stock Image
Source: Google Stock Image
Source: Google Stock Image
Source: Google Stock Image
Source: Google Stock Image
Source: Google Stock Image
Venmo is a mobile payments service that is now a part of PayPal. It allows users to
transfer money between one another using a mobile phone app or web interface.
Users link their bank accounts to their Venmo account and are able to pay using
either an email account or phone number.
RuPay facilitates electronic payment at all Indian banks and financial institutions; it
competes with MasterCard and Visa in India. It was designed to consolidate and
integrate various payment systems in India and acts as the equivalent of a
credit/debit card
Alipay.com is a third-party online payment platform with no transaction fees. Alipay
provides an escrow service, in which consumers can verify whether they are happy
with goods they have bought before releasing money to the seller. Alipay operates
with more than 65 financial institutions including Visa and MasterCard to provide
payment services for Taobao and T-mall as well as more than 460,000 Chinese
businesses. Internationally, more than 300 worldwide merchants use Alipay to sell
directly to consumers in China.
Klarna is a Swedish e-commerce company that provides payment services for online
storefronts. Their core service is to assume stores' claims for payments and handle
customer payments, eliminating the risk for seller and buyer. About 20% of all e-
commerce sales in Sweden go through Klarna. They also operate in Norway,
Finland, Denmark, Netherlands and Germany. Klarna was launched in the US on 1st
September 2015, with Overstock.com announced as their first major retail partner.
Stripe is a technology company that allows both private individuals and businesses to
accept payments over the Internet. Stripe focuses on providing the
technical, fraud prevention, and banking infrastructure for online payments
processing. It was announced in March 2014 that Stripe would support Bitcoin
transactions. Stripe raised $280M in six equity funding rounds between March 2011
and July 2015 and has a significant presence in the US and European e-payments
market.
Source: Google Stock Image
Source: Google Stock Image
Source: Google Stock Image
Source: Google Stock Image
Source: Google Stock Image
Against a background where global equity markets have seen an unexciting 12
months and a testing start to the New Year, many payments stocks have delivered
excellent returns.
Source: Bloomberg Source: Bloomberg (1) Share price as at 7
th January 2016
Source: Bloomberg Source: Bloomberg (1) Share price as at 7
th January 2016
50
60
70
80
90
Jan 15 Apr 15 Jul 15 Oct 15 Jan 160
10
20
30
40
50
60
70
80
90
Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
60
70
80
90
100
110
Jan 15 Apr 15 Jul 15 Oct 15 Jan 16
0
20
40
60
80
100
120
Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
Source: Bloomberg Source: Bloomberg (1) Share price as at 7
th January 2016
Source: Bloomberg Source: Bloomberg (1) Share price as at 7
th January 2016
Source: Bloomberg Source: Bloomberg (1) Share price as at 7
th January 2016
30
35
40
45
50
Jan 15 Apr 15 Jul 15 Oct 15 Jan 16
0
10
20
30
40
50
Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
150
200
250
300
350
400
Jan 15 Apr 15 Jul 15 Oct 15 Jan 16
0
50
100
150
200
250
300
350
400
Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
80
85
90
95
100
105
110
115
120
125
130
Jan 15 Apr 15 Jul 15 Oct 15 Jan 16
0
20
40
60
80
100
120
140
Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
In Table 1 we show the performance over 1, 3 and 12 months for each of the stocks
included in our universe of selected companies.
Clearly, the 1 month and 3 month performance figures have been affected by the
weak markets at the start of the New Year but over 12 months many stocks have
performed strongly.
Ticker Name Chg Pct 1M (%) Chg Pct 3M (%) Chg Pct 1Yr (%) V US VISA INC-CLASS A SHARES (4.0) (1.3) 12.1 MA US MASTERCARD INC-CLASS A (4.9) (5.9) 6.8 PYPL US PAYPAL HOLDINGS INC (4.5) 3.4 ADP US AUTOMATIC DATA PROCESSING (6.1) (8.2) (7.4) FISV US FISERV INC (4.2) (4.6) 22.0 FIS US FIDELITY NATIONAL INFO SERV (4.7) (17.2) (7.3) CIEL3 BZ CIELO SA (5.6) (13.3) 3.1 ADS US ALLIANCE DATA SYSTEMS CORP (4.7) (8.8) (12.2) FDC US FIRST DATA CORP- CLASS A (8.3) N/A N/A WU US WESTERN UNION CO (7.3) (11.4) (5.5) TSS US TOTAL SYSTEM SERVICES INC (15.0) (5.2) 35.0 VNTV US VANTIV INC - CL A (8.6) (2.0) 35.1 GPN US GLOBAL PAYMENTS INC (14.8) (10.8) 38.9 ATO FP ATOS SE (5.6) 3.7 12.9 WPG LN WORLDPAY GROUP PLC 6.8 N/A N/A ING FP INGENICO GROUP (5.6) 3.5 20.4 WDI GR WIRECARD AG 2.3 5.5 21.3 PAY US VERIFONE SYSTEMS INC (6.3) (18.7) (33.5) WLN FP WORLDLINE SA (5.2) 2.8 37.4 PAYS LN PAYSAFE GROUP PLC 20.7 13.5 94.1 HPY US HEARTLAND PAYMENT SYSTEMS IN 10.4 37.6 70.3 EPO LN EARTHPORT (3.1) (19.4) (29.8) SQ US SQUARE (3.6) N/A N/A PROX LN PROXAMA PLC 244.4 14.8 (24.4)
SPX INDEX S&P 500 INDEX (4.4) (4.5) (5.9) ASX INDEX FTSE ALL SHARE INDEX (0.8) (6.8) (6.7) DAX INDEX DAX INDEX (4.2) (1.9) 2.6 CAC INDEX CAC 40 INDEX (4.4) (7.5) 4.1
Source: Bloomberg
(1) Share price as at 7th January 2016
The Payments sector is a big market with some big companies. We have selected a
universe of stocks including the key quoted players.
In the Companies section, we provide a four page profile of the companies included
in our universe.
Table 2 shows the relative valuation of these stocks, giving P/e, EV/EBITDA and the
yield for each stock:
Ticker Name Mkt Cap (USDm)
(1)
Revenue
(USDm)
Mkt Cap/Revenue (x)
EV (USDm)
EV/TTM EBITDA
(x)
EV/EBITDA
FY1(x)
EV/EBITDA
FY2(x)
P/E(x) P/E FY1(x)
P/E FY2(x)
Dividend
Yield(%) V US VISA INC-CLASS A
SHARES 162395 13880 11.7 152996 16.0 14.5 12.6 34.5 25.9 22.1 0.7
MA US MASTERCARD INC-CLASS A
102891 9473 10.9 99308 15.1 17.6 15.5 26.5 27.4 23.6 0.7
PYPL US PAYPAL HOLDINGS INC 40475 8025 5.0 36176 18.3 14.4 12.4 N/A 26.1 22.0 N/A ADP US AUTOMATIC DATA
PROCESSING 36334 10939 3.3 35096 14.5 14.1 12.8 26.6 24.2 21.2 2.5
FISV US FISERV INC 20159 5066 4.0 24085 14.0 13.5 12.6 27.6 22.8 20.4 N/A CIEL3 BZ CIELO SA 66468 7726 8.6 82238 17.0 15.4 13.8 19.9 18.1 16.3 2.0 ADS US ALLIANCE DATA SYSTEMS
CORP 16020 5303 3.0 20379 13.0 10.7 9.5 28.4 17.4 15.2 N/A
FDC US FIRST DATA CORP- CLASS A
13110 11152 1.2 37016 14.1 13.7 12.8 N/A 21.5 10.7 N/A
WU US WESTERN UNION CO 8615 5607 1.5 10684 7.8 7.6 7.5 10.2 10.2 9.9 3.6 TSS US TOTAL SYSTEM SERVICES
INC 8546 2447 3.5 9547 12.0 11.6 11.1 24.9 18.9 17.6 0.9
VNTV US VANTIV INC - CL A 8871 2577 3.4 12118 17.7 15.2 13.7 42.8 20.9 17.9 N/A GPN US GLOBAL PAYMENTS INC 7970 2774 2.9 9586 15.7 14.1 13.0 28.0 20.7 18.4 0.1 WPG LN WORLDPAY GROUP PLC 6166 863 7.1 8442 20.6 20.7 18.7 N/A 41.1 28.8 N/A PAY US VERIFONE SYSTEMS INC 2837 2000 1.4 3463 12.5 8.7 7.9 29.5 11.7 10.2 N/A WLN FP WORLDLINE SA 3181 1149 2.8 2886 N/A 11.4 10.2 29.2 23.8 22.2 N/A HPY US HEARTLAND PAYMENT
SYSTEMS IN 3407 2311 1.5 3862 17.2 18.9 16.6 46.6 32.1 27.6 0.4
PAYS LN PAYSAFE 1877 365 5.1 2043 23.4 15.4 8.3 48.1 21.8 15.4 N/A WDI GR WIRECARD AG 6182 601 10.3 5316 23.2 21.6 16.8 42.6 37.1 28.1 0.3 ING FP INGENICO GROUP 6831 1607 4.2 7274 16.5 14.5 13.1 29.6 24.0 21.3 0.9 ATO FP ATOS SE 7557 9051 0.8 7422 8.2 6.1 5.4 23.4 13.2 11.1 1.1 EPO LN EARTHPORT PLC 162 19 8.4 132 N/A 56.4 10.3 N/A N/A 20.0 N/A SQ US SQUARE 3705 850 4.4 4046 N/A N/A 1456.9 N/A N/A N/A N/A PROX LN PROXAMA 25 1 21 14 N/A N/A 3.6 N/A N/A 4.2 N/A
Source: Bloomberg (1) Share prices as at 7
th January 2016
Key highlights are as follows:
The Payments sector includes an array of substantial companies, with 16 of the
companies in the universe boasting a market cap of USD5bn or more;
In contrast to global stock markets, many of these stocks have performed strongly
over the last 12 months, rising by 30-50%, reflecting the strong growth in the
market and attractive margins for established companies;
P/e ratios for Forecast Year 1 (FY1) range from 16-30x, with outliers above this in
Worldpay, Wirecard and Heartland on p/e’s of 32-41x and below this in Western
Union, Verifone and ATOS on 10-13x;
EV/EBITDA multiples range from 11-19x for FY1, with ATOS, Verifone and
Western Union below this on 6-9x and Worldpay and Wirecard on 21-22x and
Earthport on 56x, though these multiples fall swiftly reflecting strong growth;
Ticker Name Mkt Cap (USD)(1)
Last Px (USD)(1)
Chg Pct 1D(%)
Chg Pct 1M(%)
Rev - 1 Yr Gr:Y(%)
EPS - 1 Yr Gr:Y(%)
P/E(x) ROE(%) Dvd 12M Yld(%)
V US VISA INC-CLASS A SHARES 162395 74 (2.0) (6.7) 9.3 30.9 34.5 22.1 0.7 MA US MASTERCARD INC-CLASS A 102891 92 (1.8) (6.7) 13.5 20.9 26.5 58.3 0.7 PYPL US PAYPAL HOLDINGS INC 40475 33 (2.5) (6.9) 19.3 N/A N/A N/A N/A ADP US AUTOMATIC DATA PROCESSING 36334 79 (3.1) (8.7) 7.0 12.4 26.6 28.6 2.5 FISV US FISERV INC 20159 88 (1.1) (6.8) 5.2 22.2 27.6 22.2 N/A FIS US FIDELITY NATIONAL INFO SERV 16701 59 0.0 (6.1) 5.8 43.2 19.7 11.1 1.8 CIEL3 BZ CIELO SA 16445 9 2.0 (1.8) 14.7 20.1 19.9 68.7 2.0 ADS US ALLIANCE DATA SYSTEMS CORP 16020 262 (3.0) (7.1) 22.8 (13.6) 28.4 31.3 N/A FDC US FIRST DATA CORP- CLASS A 13110 15 (5.8) (15.5) 3.2 N/A N/A N/A N/A WU US WESTERN UNION CO 8615 17 (0.6) (9.9) 1.2 11.9 10.2 67.0 3.6 TSS US TOTAL SYSTEM SERVICES INC 8546 46 (3.0) (17.3) 18.5 13.0 24.9 20.1 0.9 VNTV US VANTIV INC - CL A 8871 46 (0.9) (10.5) 22.3 (8.3) 42.8 19.0 N/A GPN US GLOBAL PAYMENTS INC 7970 61 (3.7) (12.7) 8.6 22.1 28.0 33.5 0.1 WPG LN WORLDPAY GROUP PLC 9018 5 0.8 4.4 8.0 N/A N/A N/A N/A PAY US VERIFONE SYSTEMS INC 2837 25 (5.3) (6.0) 7.0 N/A 29.5 8.2 N/A WLN FP WORLDLINE SA 2943 22 0.7 (6.7) 1.3 N/A 29.3 20.8 N/A HPY US HEARTLAND PAYMENT SYSTEMS
IN 3407 93 (1.9) 16.8 8.2 (54.2) 46.6 14.4 0.4
PAYS LN OPTIMAL PAYMENTS PLC 1879 6 8.1 5.7 44.0 63.6 48.2 6.2 N/A WDI GR WIRECARD AG 6192 50 2.8 1.1 24.8 20.3 42.7 12.1 0.3 ING FP INGENICO GROUP 6849 112 (0.4) (4.1) 17.2 45.6 29.6 19.6 0.9 ATO FP ATOS SE 7590 73 (1.0) (5.8) 5.1 (10.4) 23.6 9.0 1.1 EPO LN EARTHPORT PLC 162 0 (1.4) (0.7) 78.1 (8.5) N/A (33.1) N/A SQ US SQUARE 3705 11 (3.1) (7.9) 53.9 (31.7) N/A N/A N/A PROX LN PROXAMA 25 0.02 (1.5) 244.4 (20.0) 45.6 N/A N/A N/A
Source: Bloomberg (1) Share prices as at 7
th January 2016
Yields, which are shown on a rolling 12 months basis, are typically less than 2%,
with Western Union again the outlier at 3.6%, again reflecting the fact that these
are growth stocks;
Most companies do not carry significant debt but there are exceptions such as
Cielo, Alliance Data Systems, Fidelity National Information Services, First Data,
Vantiv and Worldpay;
Table 2 shows a summary of valuation measures but also shows revenue and eps
growth over the last 12 months which provides a useful headline indicator of
growth;
Table 3 provides a summary of some key ratios – which give an overview of
growth and profitability;
Revenue growth typically lies in the range 7-15%, reflecting industry growth, but
there are some outliers at 20% or more and, importantly, there are only one or two
low growth or no-growth stocks;
EBITDA margins are typically 15-30% but outliers include Visa and Mastercard
with margin of around 69%.
Ticker Name Sales Growth (%) EBITDA Growth (%)
EBITDA Margin Operating Income Margin
Net Income Growth (%)
V US VISA INC-CLASS A SHARES 9.3 17.5 68.9 65.3 16.4 MA US MASTERCARD INC-CLASS A 4.3 24.1 69.0 52.2 8.1 PYPL US PAYPAL HOLDINGS INC N/A N/A 22.2 15.7 N/A ADP US AUTOMATIC DATA PROCESSING 6.2 5.3 21.9 18.5 0.8 FISV US FISERV INC 3.8 7.7 33.0 25.0 (11.3) FIS US FIDELITY NATIONAL INFO SERV 1.8 2.6 28.5 18.6 29.9 CIEL3 BZ CIELO SA 37.0 26.2 47.4 40.0 10.4 ADS US ALLIANCE DATA SYSTEMS CORP 24.6 10.6 25.3 18.0 (12.1) FDC US FIRST DATA CORP- CLASS A 2.8 1.8 23.1 13.1 57.4 WU US WESTERN UNION CO (1.9) 0.3 24.9 20.0 5.3 TSS US TOTAL SYSTEM SERVICES INC 12.6 19.2 29.4 20.0 17.0 VNTV US VANTIV INC - CL A 26.6 30.2 22.4 13.3 66.3 GPN US GLOBAL PAYMENTS INC 7.2 11.1 21.7 16.7 13.0 WPG LN WORLDPAY GROUP PLC N/A N/A 44.5 28.0 N/A WDI GR WIRECARD AG 27.1 35.2 29.5 22.5 31.9 ATO FP ATOS SE 15.5 27.2 9.2 5.2 40.6 PAY US VERIFONE SYSTEMS INC 7.0 25.9 13.8 5.3 N/A WLN FP WORLDLINE SA 1.3 (6.2) 16.9 13.1 (15.3) HPY US HEARTLAND PAYMENT
SYSTEMS IN 15.7 7.0 8.7 4.1 (40.5)
OPAY LN OPTIMAL PAYMENTS PLC 45.9 42.0 20.4 13.7 (26.9) EPO LN EARTHPORT PLC 78.1 (127.1) (27.7) (39.3) (45.9) SQ US SQUARE 49.4 N/A N/A (14.1) (14.1) PROX LN PROXAMA N/A N/A N/A N/A 2.1
Source: Bloomberg
We show in Table 5 a range of key valuation metrics for technology and social media companies including Market Cap/Revenue, Market Cap per User and Revenue per User.
Name Tkr & Exch (1)
Mkt Cap (USD m) (2)
Net Sales T12M (m)
Mkt Cap/Revenue (x)
No of Users (m) (3)
Mkt Cap per User (USD) (2)
Revenue per User (USD) (2)
Alphabet GOOG US 496567 71763 7 2200 226 33 Apple Inc AAPL US 537593 233715 2 N/A N/A N/A Samsung Electronics
005930 KS 140839 177125 1 N/A N/A N/A
Yahoo YHOO US 28926 4948 6 1000 29 5 Ebay EBAY US 30917 15847 2 159 194 100 LinkedIn LNKD US 28302 2772 10 400 71 7 Facebook FB US 275249 15937 17 1500 183 11 Twitter TWTR US 13645 1987 7 302 45 7 Amazon AMZN US 284562 100588 3 300 949 335 Tencent Holdings 0700 HKG 167299 15011 11 244 686 62 Yelp BABA US 1891 506 4 2000 1 0 Alibaba Group YELP US 175294 13825 13 142 1234 97 Instagram N/A 35000 700 50 300 117 2
Source: Bloomberg
(1) All companies listed ex Instagram which is owned by Facebook
(2) All figures in USD ex Samsung which is in Korean Won
(3) https://www.linkedin.com/pulse/heres-how-much-youre-worth-tech-giants-auwal-abubakar-
babaty?forceNoSplash=true
Source: Bloomberg
Source: Bloomberg
It should be noted that for Amazon Revenue per User is USD 335.
0
5
10
15
20
25
30
35
40
45
50
55ALPHABET INC-CL C GOOG US
APPLE INC AAPL US
SAMSUNG ELECTRONICS CO LTD005930 KSYAHOO! INC YHOO US
EBAY INC EBAY US
LINKEDIN CORP - A LNKD US
FACEBOOK INC-A FB US
TWITTER INC TWTR US
AMAZON.COM INC AMZN US
TENCENT HOLDINGS LTD 0700 HKG
YELP INC BABA US
ALIBABA GROUP HOLDING-SP ADRYELP USINSTAGRAM N/A
0
10
20
30
40
50
60
70
80
90
100
110 ALPHABET INC-CL C GOOG US
APPLE INC AAPL US
SAMSUNG ELECTRONICS CO LTD005930 KSYAHOO! INC YHOO US
EBAY INC EBAY US
LINKEDIN CORP - A LNKD US
FACEBOOK INC-A FB US
TWITTER INC TWTR US
AMAZON.COM INC AMZN US
TENCENT HOLDINGS LTD 0700 HKG
YELP INC BABA US
ALIBABA GROUP HOLDING-SP ADRYELP USINSTAGRAM N/A
Source: Bloomberg
It should be noted that Market Cap per User is as follows:
For Amazon USD 949;
For Tencent USD 686; and
For Alibaba USD 1234.
0
20
40
60
80
100
120
140
160
180
200
220
240
ALPHABET INC-CL C GOOG US
APPLE INC AAPL US
SAMSUNG ELECTRONICS CO LTD005930 KSYAHOO! INC YHOO US
EBAY INC EBAY US
LINKEDIN CORP - A LNKD US
FACEBOOK INC-A FB US
TWITTER INC TWTR US
AMAZON.COM INC AMZN US
TENCENT HOLDINGS LTD 0700 HKG
YELP INC BABA US
ALIBABA GROUP HOLDING-SP ADRYELP USINSTAGRAM N/A
The global non-cash payments industry is huge and continues to grow rapidly.
Per Boston Consulting Group (BCG), banks handled $410 trillion in noncash
transactions in 2013, more than five times the amount of global GDP.
The value of noncash transactions is expected to reach $780 trillion by 2023, a
growth rate of 7% p.a.
What is the addressable market for payments companies?
The size of the market and the rate of growth means that, for well-positioned
companies, the scale of the available opportunity is huge.
In 2013, payments businesses generated total revenue of $1.1 trillion.
Payments revenues are expected to reach $2.1 trillion by 2023, growth of 8% p.a.
Per the Capgemini RBS World Payments Report for 2015, the global non-cash
transactions market saw 357.9 billion transactions in 2013, growth of 7.6% which was
in line with growth of 7.4% p.a. between 2009-13.
Source: Capgemini RBS World Payments Report 2015
By volume, North America and Europe continue to account for the lion's share of
global transactions (over 60%) but, not surprisingly, the rate of growth and,
interestingly, the level of usage are highest in Mature Asia Pacific, CEMEA and
Emerging Asia. This is shown in Chart 9.
By region, between 2009-2013:
Emerging Asia and Central Europe, Middle East & Africa (CEMEA) saw the fastest
rate of growth at 20.9% p.a. and 20.1% p.a. respectively;
Growth was also strong in Latin America and Mature Asia Pacific at 10.4% p.a.
and 9.1% p.a. respectively; and
Growth in Europe and North America was 4.3% p.a. and 4.2% p.a. respectively,
still some way above GDP growth.
Chart 10 shows the breakdown of payments by type for each region around the
world.
With the rapid growth of card payments, the non-cash payments industry has seen a
significant shift in the landscape: Over recent years, debit and credit card usage has
continued to increase and in 2013 card payments accounted for 62.8% of all non-
cash transactions globally. Correspondingly, the rate of cheque usage in most
regions has seen a sharp decline.
However, perhaps not surprisingly, cash is still by far the preferred payment method
of consumers in most markets around the world, with few exceptions.
Similarly, direct debits, credit transfers and cheques still make up a significant share
of transactions globally.
We summarise below the key highlights.
By payment type:
Card payments now account for a minimum of 40% in each region, with Europe
and Latin America the lowest, at 43% and 49% respectively;
Asia Pacific, Emerging Asia and CEMEA each have a minimum of 70% of
transactions in the form of card payments;
Direct debits still account for 26% of transactions in Europe;
Credit transfers account for 26% of transactions in Europe and 22% in CEMEA but
just 8% in North America and 9% in Emerging Asia;
Cheques still account for 13% of transactions in North America whereas they
represent no more than 7% in any other region. The rate of cheque usage in the
US remains relatively high. But the rate of growth in online shopping in the US is
likely to result in continued growth in debit and credit card usage, at least until
alternative payment methods become more widely used.
Source: Capgemini & Royal Bank of Scotland World Payments Report 2015
The Capgemini RBS World Payments Report recognised three key drivers of change
in the payments market:
Developing markets growth;
E- and m-payments; and
Hidden payments.
Developing markets are growing at a rate which is likely to see non-cash transaction
numbers exceed the level of mature markets by 2021, if growth continues at the rate
seen in 2008-2012.
Looking at the rate of growth in China, and the Government's push to encourage
non-cash payment schemes such as China UnionPay and Alipay, in order to operate
in China international companies will have to be able to talk to and accommodate
these businesses.
Key highlights:
The number of debit cards grew by more than 20% in 2011 and 2012;
The number of Point of Sale terminals grew by over 40%;
In 2012, China’s top 10 POS companies made more than 6 million shipments,
around 31% of the global total;
The total number of cards in circulation in China is greater than the number in all
mature markets combined;
One in five people in the world using mobile banking lives in China;
Chinese e-commerce shoppers spent $213bn online in 2013, up 70% p.a. since
2009.
China UnionPay is the world’s largest card brand with 3.53 billion cards in circulation.
The rising penetration and convergence of online and mobile technologies together
with the growth of faster payments schemes based on debit and real-time payments
is seen as likely to be a key driver behind the continued growth of global non-cash
payments.
Charts 11 and 12 show the recent growth in e-payments and m-payments.
Source: Capgemini Source: Capgemini
Between 2011-15F, the respective growth rates are as follows:
E-commerce transactions ~ 15.9% p.a.;
M-payments transactions ~ total 60.8% p.a.
Banks ~ 58.1% p.a.;
Non-Banks ~ 82.7% p.a.
The trends highlight, in particular, the scale of growth in mobile payments which is
expected overtake the volume of e-payments in 2015.
It is worthy of note that, in the US, JP Morgan Chase and Wells Fargo have seen
growth rates of 15-20% p.a. over the last two years in the number of active mobile
banking users, giving the former over 22m users and the latter 16m.
In the UK, the number of mobile banking users is set to almost double from 17.8m to
32.6m by 2020, according to research by the Centre for Economics and Business
Research commissioned by Fiserv.
Hidden or unreported payments include the following and are likely to become a
larger part of the whole:
Prepaid retail or gift cards, including those issued by many leading retailers;
Virtual currencies;
Prepaid mobile wallets such as Google and Starbucks;
Payment aggregators such as PayPal, Google checkout and Amazon Payments;
Worker remittances.
Figure 13 shows a flowchart for a standard payment transaction. The process
involves a number of different parties, with banks and payment processors often
acting in more than one capacity. This means that, at first sight, the process is by no
means straightforward to understand.
However, per the UK Cards Association, in essence, in any card payment
transaction, there are five stakeholders in the process:
Cardholder;
Retailer/merchant;
Acquirer;
Card scheme; and
Issuer
This is the person holding a debit, credit or charge card.
Cardholders place their card into the chip & PIN reader. The customer then keys
in their PIN, to indicate their agreement to proceed with the transaction. An
authorisation code will be given to the merchant for the transaction by the
cardholder’s card issuer that will appear on the terminal receipt that is handed to
the cardholder. The card issuer will debit the transaction to the cardholder’s
account.
Alternatively, if the card does not have a chip (only a magnetic stripe) or the
merchant does not have a chip & PIN terminal, the merchant will swipe the card
through the terminal or use a paper voucher that the cardholder will need to sign.
A merchant sells goods or services to their customer (the cardholder). This can be
face-to-face in a shop, where both the cardholder and their card are present, or
when taking orders remotely e.g. over the phone for a restaurant take-away, a
mail order from a catalogue, or a purchase over the internet. This is a card-not-
present (CNP) transaction.
The card transaction’s details are entered into the merchant’s terminal and are
sent to its acquirer who will process the transaction and send it on to the relevant
card issuer for authorisation and settlement.
A merchant will have negotiated a merchant service agreement with its acquirer to
process payment card transactions on its behalf. Typically this agreement will also
include the acquirer providing one of its own terminals.
An acquirer is responsible for receiving the card transaction details from the
merchant’s terminal, passing it through to the card issuer via the card scheme for
authorisation and completing the processing of the transaction.
The acquirer will arrange the card transaction’s settlement and will typically credit
the merchant’s nominated bank account with the funds within four working days.
The acquirer will also deal with any chargebacks or requests for information (RFI)
that may be received from card issuers on any of their merchant’s transactions.
Card schemes are organisations that manage and control the operation and
clearing of card payment transactions according to card scheme rules.
The card schemes are responsible for passing card transaction details from the
acquirer to the issuer and for passing payments back to the acquirer which in turn
pays the merchant.
American Express, Diners Club, JCB, Maestro, MasterCard and Visa (including
Electron or Debit) are the card schemes that operate in the UK.
The issuer is the bank, building society or financial organisation that provides
payment cards (debit, credit, pre-paid or charge card) to their customer or
cardholder.
The issuer has responsibility for transactions made on cards that they have
issued, and will be responsible for debiting funds from the relevant cardholder’s
account. Note that American Express and Diners Club act as Card scheme, Issuer
and acquirer at the same time.
Source: The UK Card Association
As Worldpay recognised in its prospectus, the landscape is changing:
‘Although the traditional ‘four-party’ model still accurately describes many of the
functions and participants of the industry today, it does not reflect the proliferation of
payment types, new technologies, the globalisation of demand and supply or the
interconnected regulatory and risk frameworks which are now in evidence.’
In our view, the entry of new players into the markets, such as Paypal, Square, Strip,
Apple Pay and Alipay, has accelerated the evolution of the industry and is likely to
continue to do so, not least due to their ability to act in more than one capacity.
We think it is important to recognise that what, for many, may still seem like the
future, including NFC and frictionless payments is with us already.
Figure 14, taken from the Capgemini/RBS World Payments Report 2015, provides a
very useful graphical portrayal of the ‘New World’ payments ecosystem.
Source: World Payments Report 2015; Capgemini; RBS
In addition to the parties involved in the traditional four-party model, there are two
other parties commonly involved in the transaction process. These are:
Gateway providers; and, possibly
Independent sales organizations (ISOs).
Figure 15 shows a range of the key participants in each step of the evolving
payments ecosystem.
Source: www.mobileecosystemforum.com
Mobile payment means different things to different people. It can include an e-
commerce transaction completed on a mobile. Historically, mobile payment had its
roots in payment for digital games via carrier billing (on your mobile phone bill), and
this still is a significant part of the ecosystem.
However, we use the term contactless MPay here to apply to payment at the bricks-
and-mortar till. This can be effected in more than one way. Starbucks for example
has gained very significant traction using QR/barcodes and a scanner/barcode
reader.
Here, however, we focus on NFC-enabled contactless payment. The critical element
of security in mobile payment, seemingly controlled by the mobile network operators
(MNO’s), via a secure, MNO-controlled, SIM, has been circumvented by both Apple
(via their own – phone - embedded secure element and tokenisation) and
Google/Android (HCE – host card emulation and tokenisation).
Via its acquisition of LoopPay, Samsung hopes to steal a march in America through a
technology that enables contactless/tap-and-pay payment both at EMV/NFC-enabled
terminals and magnetic stripe terminals (the US is only now shifting to EMV/chip-and-
pin). Leading terminal solution provider Ingenico has gained significant traction
already in the US via its EMV expertise elsewhere, recently posting revenue gains of
over 100% in that territory.
Near field communication NFC establishes a radio connection with another device
when it is placed in close proximity to it. In order for this to work, both devices must
be equipped with an NFC chip, resulting in a contactless payment.
The mobile payments market is experiencing huge growth as a consequence of the
evolution and popularity of tablets and smart mobile devices. Statista estimate that
the global mobile payments market will more than double from 2014 to 2017 reaching
around $721bn in annual transactions (Chart 17).
Source: Statista, 2015
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2010 2011 2012 2013 2014 2015* 2016* 2017*
Source: Google Stock Image
According to the Adyen Mobile Payments Index in January 2015 iPhone overtook the
iPad in terms of relative share of mobile payments per device type. It is worth noting
that Android Mobile is growing at a consistent pace and as shown in Chart 18
smartphone payments take a larger share of payments than tablets.
Source: Adyen
It has been suggested that growth in the industry stems from consumer desire for a
multi-service channel which is threatening financial institutions and in particular their
control of payments. Consumers are looking for a one stop shop to see them through
their checkout experience. A service of this nature is able to take the user through the
entire checkout process without ever involving the consumer’s bank directly.
The contactless mobile payments market is still a new and emerging market. A
YouGov survey in June 2015 found that 47% of respondents did not want to use their
phone to make a payment. To be successful incumbents must provide a secure
seamless payment solution that addresses all consumer concerns including:
in the same YouGov survey it was found 81% of respondents
had concerns about the security of contactless mobile payments. These include
the security of bank and payment details being stored on smartphones open to
hackers and the risk that, if the phone is lost or stolen, information may fall into the
wrong hands.
the solution has to be easier and more
convenient to use than existing payment methods including: cash, credit/ debit
card (contactless, magstripe and chip and pin).
whilst smartphone penetration in the UK in 2015 is
c.72% according to Statista, mobile wallets are limited to specific smartphones
and operating systems. Older devices without fingerprint recognition technology
cannot be used to verify mobile wallet transactions.
many payment transactions using mobile wallets
have a maximum transaction size (eg.£20), therefore they cannot be used on all
purchases and an alternative payment method is required.
38% of young people in the YouGov survey thought that short
battery life made it an unreliable payment method.
iPhone overtaking iPad in mobile
payments
In the fourth quarter of 2014, Apple sold
nearly 75 million iPhones with fingerprint
ID capabilities
While the mobile payments market in terms of phones and tablets remains in the
early stages of exponential growth, the next generation of product has already
arrived in the form of wearables and accessories.
Examples include:
Apple Watch, a smartwatch which gives the user the functionality of an iPhone on
the wrist, including Apple Pay;
Swatch smartwatch launched in China in partnership with China UnionPay and
Bank of Communications;
FitPay and Connectedevice for Pebble Time range of smartwatches;
UK train operator c2c, which runs services for commuters from London to
Southend and Essex, is offering free Barclaycard bPay contactless payment
wristbands; and
TopShop x bPay range - UK fashion retailer TopShop has launched a range of
accessories, such as wristbands, key chains and smartphone cases, equipped
with Barclaycard’s bPay technology that enable shoppers to make tap and go
payments at any contactless terminal.
Source: www.wareable.com Source: Google Stock Images
Source: Google Stock Images Source: Google Stock Images
Source: www.nfcworld.com
Over the last 12 months or so, we have seen the launch of Apple Pay, Android Pay,
Samsung Pay as well as payments products from Amazon and Facebook. The
advent of new products has been driven, not least, by the advent of smartphone
technology and near field communications (NFC).
The entry of new players into the markets has accelerated the evolution of the
industry and is likely to continue to do so, not least due to their ability to act in more
than one capacity.
Growth of mobile point-of-sale (mPOS) could potentially have a huge impact on the
payments industry for both hardware and software. BI Intelligence forecasts that, by
2019, nearly 80% of US retailers will have implemented an mPOS device. The move
to mPOS will continue to put pressure on incumbent hardware providers as well as
ISOs that sell legacy devices to merchants.
In this context, it is interesting to see that Ingenico has undertaken a series of
acquisitions in the US this year, perhaps as a way of repositioning itself.
It seems clear that new entrants have already played a central role in bringing down
barriers to entry and are thereby threatening to bring the historical supernormal
returns to more normal levels.
However, it could be argued that the technology companies are looking at the bigger
picture, recognising the central position that payments plays in the economy and that
the merchant/consumer interface is one of the most critical points.
From an investor’s viewpoint, it is fair to ask whether recent entrants are looking to
provide a target rate of return or whether they are looking principally to cement a
market position. Clearly, in a rapidly-changing industry there is a need to retain a seat
at the table.
It is difficult to envisage how many industry winners there may be but it could well be
that the spoils go to a few, very large, winners.
The merchant/consumer contact is not just where a transaction is made, but where
data is collected, and where data and products can be delivered and much more
cheaply and conveniently than previously, via SaaS. These could range from internal
management information such as stock and accounting records to promotional and
marketing data for loyalty schemes and offers. The information can also be used to
link to delivery and logistics systems.
In order to identify potential winners, we see four central questions:
Does the product really offer any points of technological differentiation i.e. USP’s
and, if so, is there really any Intellectual Property? As BCG asks, does it provide
any real value to consumers and merchants?
Will it make money for the provider?
As BCG adds, is it scalable?
Does the provider own a meaningful customer base? Providers with a large
customer base, such as the techco’s, clearly start from a position of strength.
While a product that offers different technology or IP looks superficially attractive, it
could be straightforwardly that the winners stem from how many consumers a
company brings to the party. This would suggest that the long term winners will be
the digital/online giants, partnering with what seem for now important partners such
as card scheme majors and mobile network operators (MNO’s).
BCG identified in its report ‘Global Payments 2014: Capturing the Next Level of
Value’ three key steps:
Seeing Payments as a Platform, not simply as a product
Identifying Initiatives That Warrant Investment
Pursuing Multiple Paths
In our view, the BCG report provides a particularly valuable summary and therefore
reproduce the below, including Figure 24, verbatim.
The digitization of banking and overall retail commerce is driving innovation in
payments services. Mobile banking is enabling financial institutions to interact with
their customers as often as they like and to deliver new services in real time.
These capabilities are providing an unprecedented opportunity to improve
customer satisfaction and deepen relationships.
At the same time, technology companies are entering the payments space and
generating new sources of value by integrating payments into broader platforms
for merchants and consumers. These companies are engaging with their
customers on a daily basis and pushing their payments capabilities.
Incumbent players must figure out how to integrate their own payments services
into platforms that contain additional benefits. Examples include Simple, PNC
Bank’s Virtual Wallet, and BankAmeriDeals. If incumbents fail to act, they risk
being relegated to the back end of the process (as has been the case with
PayPal).
Financial institutions must evaluate numerous potential initiatives, including those
related to digitization, to find the ones that merit their attention and investment.
This endeavour is best approached using a framework that poses three key
questions. (See Figure 24).
Source: BCG
What is the impact on the institution’s economics? Players must determine
whether a particular initiative will have a positive impact, improve the economics of
certain customer segments, increase (or decrease) interactions, and create a new
revenue stream. The effects on risk and fraud exposure, along with the cost of risk
management, must also be considered.
Does it provide real value to consumers and merchants? Of course, the key
criterion here is whether the initiative truly eases a pain point or provides a better
value proposition, taking into full consideration how customer needs and
expectations are evolving outside of payments.
Does it scale? It is also critical to examine whether an initiative offers economies
of scale or a potential network effect. Part of the scale requirement is ensuring that
the product or service either fits with current consumer behavior or has a
sufficiently compelling value proposition to alter that behavior.
Once a bank identifies the right initiatives, it has to make tough choices regarding
which ones to pursue and whether to build or buy—or to seek partnership
arrangements.
Because digital payments solutions are still in a relatively nascent stage, banks
need to build their knowledge through smart experimentation. We encourage them
to participate in multiple initiatives and pursue both solo efforts and partnerships.
Indeed, a few banks are adopting a technology-company approach. One leading
institution, for example, is upgrading its mobile-banking platform every 100 days.
There is good reason to believe that profit margins of large incumbent players could
be under threat and this is already being witnessed by the introduction of the Single
Euro Payments Area (SEPA) and the regulation of interchange fees in Europe which
BCG estimates could lead to a loss of EUR 8 billion of revenue annually beginning in
2015.
As regards the impact of new entrants, Square and M-Pesa in Kenya, for example,
have introduced new products which have changed the landscape at the consumer
end of the chain. However, we acknowledge that the large tech companies provide
their own threat.
There is a clear risk that large incumbents are marginalised relatively quickly, as the
tech giants become either banks, financial services and payments companies or fill
those functions indirectly, with, very probably consolidated, large incumbents who
become their low-margin suppliers.
In the mobile space already there have been significant developments which look
negative for margins, as both Apple and Android Pay have used workarounds of the
MNO’s core (SIM) security ‘moat’, to effect security, and now, Google certainly,
seems to be exploring becoming a virtual mobile network operator using mobile
incumbents as a (non-coverage) infill.
Aggregating large numbers of consumers has potentially substantial power just in
reducing the number of parties in the payment transaction and processing system, a
system that already looks cumbersome given the digital revolution.
Arguably, it has been a greater challenge for payments processors with legacy
systems to keep pace, partly due to the scale and potential cost of changes and
partly due to the changing regulatory landscape which has had to address issues
such as internet payment security, mobile payment security and cyber security.
The recent suggestion that Apple is talking to the big banks with a view to creating a
common platform highlights that disruptors can work with incumbents in mutually
beneficial relationships.
Seemingly, the banks have suggested that Apple becomes the first non-bank
customer for ClearXChange, the platform owned by five of the largest US banks. This
makes a lot of sense per Tom Noyes' starpointllp.com blog, particularly given that
ClearXChange has a new owner, Early Warning Services, the leading bank risk and
fraud business.
However, there is always the risk that, having walked down the aisle, one party walks
away.
A contrasting example would be ChasePay where it is rumoured per starpointllp.com
that Chase has cut interchange fees and is creating a new acquiring model to drive
mobile volume but which, at present, appears to have one or two missing links in the
chain. This points to a model that needs volume gains in order to offset apparently-
clear margin pressures.
Given the strong reputation concerning trust and security that the banks have with
consumers, some banks, certainly those who have adopted fast payments, do have
an opportunity to simplify the system, and benefit accordingly.
This opportunity has existed for years, and little progress has been made - even the
most committed players have taken a very long time to get their act together (Sepa,
the Single Euro Payments Area, for example). There remains the risk that they will be
overtaken by events but, nevertheless, the opportunity exists.
Banks and providers can debate with each other and the regulators whether fees will
just move along the chain due to regulatory pressure on card interchange fees, for
instance, but this is unlikely to stem the impetus for change.
We are by no means saying that the disruptors will have things all their own way. The
recently-IPO’d First Data, for instance, provides a good example of a major
incumbent which has re-invented itself by creating additional revenue streams.
We can identify a number of additional revenue streams:
Additional products: Klarna, the Swedish e-commerce payments company, is able
to offer credit to US consumers without a credit card – by entering only their email
and zip code;
New markets: First Data, the leading US payments processor, has used its EMV-
friendly Clover product to launch The Station, a till replacement screen, in 2013 to
the SME market and over the past year has rolled out Mobile and Mini versions;
Marketing and advertising revenues: as exploited by Facebook and Google;
Data Analytics: this has become a key value creator and, for some, a panacea.
Again using First Data as an example, it has partnered with Palantir Technologies
to develop the Insightics product and Levelup using predictive modelling to batch
forecast payments; and
Operational products, such as inventory and accounts, as launched by
Intuit/Quickbooks.
Or, again, should we really be looking above those payment embedded products,
and to consumer aggregation, and then the products that derive from that? Are, for
example, P2P payment products, facilitated via social media, such as Facebook,
WhatsApp and WePay more important than those enhanced by it, such as Venmo
and PayPal?
Again, this raises the question of whether it is simply about the weight of numbers
and the power they give their operators in the payments ecosystem.
If contactless mobile really does take off, clearly it is likely to accelerate disruption
and change the balance of power, but we believe it is unlikely to be critical in itself.
Huge changes have already happened and will continue to happen regardless of
Apple Pay, or Android Pay, or Samsung Pay.
The US is by some distance the largest economy in the world. It has some of the
leading payments companies in the world, is home to the digital and tech majors, and
is home to numerous digital payment innovators.
Yet it is significantly behind the rest of the world in the adoption of EMV (chip-and
pin) and also in terms of fast payments.
EMV is short for EuroPay, MasterCard and Visa. EMV cards are chip & pin cards as
opposed to magnetic stripe cards.
From October 2015, there has been a watershed change and merchants which have
not implemented EMV standards will be liable for counterfeit fraud.
The regulatory push to address this has stemmed at least in part from a rise in fraud
which should be addressed by the introduction of EMV.
Regardless of how the US arrived at that point (most probably due to the large
number of banks in the US and fragmented nature of the market plus vested interests
of and lobbying by the major incumbents), the combination of innovation and
anachronism offers significant opportunities for digital innovators, as well as more-
established overseas companies with EMV expertise.
As well as the payment incumbents’ own solutions, this is bringing numerous newer
players to the customer interface, via cost-effective MPOS (mobile point of sale)
products. This poses a threat to the margins of incumbents given that those
companies include major digital disruptors, such as Amazon and PayPal, who are
creating a two-way squeeze as mobile payment encroaches on the other side.
Equally, the Federal Reserve has been pushing banks for faster payments for some
time, and the delay in dealing with the problem in a timely manner has perhaps
enhanced the level of threat from person-to-person payment (and onward to
merchant-to-peer, peer-to merchant), via chat apps and social media, which appear
to be gaining significant traction.
However, where banks, for example, have introduced faster payments systems, such
as in the UK, they have been able to put up reasonable resistance by utilising those
systems to deliver competing, and possibly more trusted, offers (Paym).
Source: EMVCo
Alongside the push to implement EMV standards, US regulators have been keen to
promote faster payments and the benefits of this are well-recognised in the payments
eco-system:
Per the Federal Reserve Bank of Boston: ‘… faster A2A payments could provide the
following benefits:
facilitate business-to-business (B2B) payments, which are still accomplished
largely by paper check;
facilitate mobile payments, a rapidly developing payments application;
improve payment security;
availability at all times (24/7/365), unlike clearing houses run by the Bank of
England or the Federal Reserve;
facilitate person-to-person (P2P) payments, which are typically handled by cash
and check in the United States; and
facilitate faster international payments using standards such as ISO 20022.’
Source: Federal Reserve Bank of Boston: Costs and Benefits of Building Faster Payment
Systems: The U.K. Experience and Implications for the United States; Claire Greene, Marc
Rysman, Scott Schuh, and Oz Shy.
And what of developing markets and global transactions? Does the opportunity justify
the required current product investment and, more importantly, investment directly in
those overseas territories?
Globalisation, global transactions and remittances have been significantly facilitated
by digital technology and online and mobile payments, with mobile banking and
payment offering a seemingly very significant opportunity in dispersed communities in
developing countries.
However, a one-size fits all approach works neither in developing countries (where
the successful mobile payment and banking model in Kenya, MPesa, perhaps
derived from a unique and fortuitous combination of factors), or developed countries
(German payment methods, for example, differ markedly from the UK’s, whilst the US
has a disproportionate usage of cheques and, at least to date, has been pretty much
wedded to the magnetic stripe as regards payment cards).
Rapid moves from cash to non-cash payment in developing countries as well as, until
recently, strong economic growth, has meant that the chase for assets taking place in
developed markets is mirrored in developing markets.
In many developing countries, government initiatives are helping promote the move
to electronic payment, and the arrival of not just smartphones, but the ability of even
very simple phones to offer internet access, is already having a noticeable impact,
both in terms of the questions raised and in actual products.
Governments can facilitate electronic payment not just from a regulatory perspective,
but, in countries where state control of industries is prevalent, also more directly
through themselves making and accepting payments electronically, from wages,
through taxes, to utility bills, probably more critical than many in the West might
imagine given often long treks to pay for electricity for example (simple carrier-billing,
payment via mobile phone bill, can have a significant beneficial effect in this regard).
Against those positives, whether intentional or not, government strategy and attitude
towards overseas competition blows hot and cold in by far and away the two most
significant economies for major payment incumbents within a reasonable time-frame
(China and, some considerable way behind, India).
Unsurprisingly, the evidence appears to suggest that both probably will continue to
favour incumbents - look at the mandatory offer by banks of a government-backed
debit card in India, for example.
Similarly, it should be remembered that recent acceptance of overseas company
card-clearing in China was actually the result of strong US pressure. However, it is
difficult to believe that China will stand by and let overseas companies gain a
meaningful part of the payments market, at least in terms of data collection and
usage. Furthermore, the possible requirement of domestic storage and servers, and
backdoor server access, has to raise obvious questions not least of all relating to
switch on/switch off.
Meanwhile, India’s focus on robust security and oversight is commendable, but it very
likely has had, and is having, negative unintended consequences, and slowing the
pace of change. India has introduced regulations that considerably hamper PayPal,
for example.
All of these factors constitute huge risks. For investors, a key takeaway from China in
particular is that they have developed, and are developing, their own huge
incumbents and innovators in the payments/ecommerce/mobile/tech/social
media/chat space (UnionPay, AliPay/Alibaba/Xiaomi/Tencent). They themselves
have big regional and global ambitions, have significant advantages in terms of
knowledge and acceptance as regards the former and are making strong moves as
regards the latter.
The example of RuPay in India is apposite.
RuPay is India’s own payment gateway, launched by Prime Minister Narendra
Modi as part of the Pradhan Mantri Jan Dhan Yojana (PMJDY) financial inclusion
scheme;
Just one year old, there are now around 190m RuPay cards in issue out of a total
of 580m debit cards in India, per the Hindustan Times (‘Plastic age: India's RuPay
breaks Visa and MasterCard's grip’ August 19, 2015), with 153m issued under the
Jan Dhan scheme;
With RuPay, fees paid by banks are lower than for international players such as
Visa and MasterCard;
The Indian Railway Catering and Tourism Corporation (IRCTC), India’s biggest e-
commerce site, has launched a RuPay pre-paid card that allows railway
passengers to book tickets, shop and pay service bills.
Similarly, the move of Alibaba into India cannot be ignored.
In September, Alibaba Group and associate Ant Financial, which operates AliPay,
became the largest shareholders of One97 Communications, the parent of the
Indian e-tailer Paytm by investing $680m;
Alibaba is understood to have taken a 20%, with Ant Financial’s stake falling to
just over 20%, in a deal which values Paytm at $3.4bn.
Alibaba also recently invested in Snapdeal, a competitor of Paytm but it looks as
though Paytm will be its main vehicle in India;
Paytm has more than 104m mobile wallet users.
And, at the same time, Tencent’s investment in Kik flags further competition for the
big incumbents.
In August, China’s Tencent invested $50m in Kik Interactive, the Canadian
messaging company, in a deal which valued Kik at more than $1bn;
Kik competes with Snapchat, Facebook’s Messenger and WhatsApp but Chief
Executive Ted Livingston is aiming to replicate the success of Tencent’s WeChat
in China.
Developed markets are much more significant in economic terms (China aside) and
likely to remain so for some considerable time.
Regardless, investors always need to look at Return on Investment, and at current
valuations against likely longer term valuations.
So, in relative terms, investment at home might well offer a greater and safer return,
but even if it does, do those returns outweigh selling the business out now, while bids
are good and operating margins remain high or simply distributing cash to
shareholders in the face of probable declining returns, especially as the card
schemes and processors face not only the threats from techco’s and others outlined
above, but also from each other.
This may be particularly the case as the card scheme majors move into other parts of
the payments industry and face ongoing pressure from the power of the retailers. The
US retailers’ own payment initiative has run late, and has possibly been surpassed
due to that delay by technology, but major retailers pose another significant threat in
that they are now so large that they can, and do, move suppliers, which can have a
significant impact on revenues - American Express lost Costco, but won Target, while
Citi/Visa won Costco.
Retailers also face threats themselves. While their attitude is positive as regards
reducing the power of the payment incumbents, retailers have been somewhat
resistant in the face of those incumbents being superseded by a possibly larger
threat, especially given Apple’s initial seeming reluctance to incorporate loyalty
schemes or loyalty cards.
They very definitely recognise the existing and real threat of Amazon’s arrival in the
bricks-and-mortar space (via MPOS), and this entry at the smaller end of the market
is reflected in the resistance they initially showed to Apple, and their probable
preference for Android (open platform, more users). However, if mobile contactless is
broadly adopted, the power will very likely be with the techco’s, and recent
substantial retail adoption of Apple Pay in the US points one way.
Many of the above considerations face all companies across the industry, and
adjacent industries, but investors in early-stage innovators, or even seemingly well-
established, and sometimes quoted, innovators need to be especially wary.
Digital currencies, and Bitcoin in particular, have had a mixed press but the
underlying blockchain technology is now gathering momentum as a potential game-
changer for the settlement of transactions in financial services with a significant
number of global banks supporting the creation of a common platform.
Digital currencies are internet based mediums of exchange that enable
instantaneous transactions and cross border transfer of ownership. They display
similar characteristics to physical currencies, but provide an alternative for online
purchases and borderless transfer of ownership. Digital Currencies can either be
cryptocurrencies or non-cryptocurrencies:
Cryptocurrency is an alternative digital token that uses cryptography to secure
transactions and the creation of new units. It can be used as a medium for
exchange and importantly is decentralised, having the ability to operate
independently of a central bank. According to mapofcoins.com there are over 740
cryptocurrencies in issue, 669 of which are available to trade in online markets
and the most famous of which is the Bitcoin.
Non-Cryptocurrency is a centralised digital currency. Very few examples exist and
remain in active use. These include Ven, used as a medium of exchange on the
social network Hub Culture, whose value is linked to currencies, commodities and
carbon futures.
A Bitcoin is a cryptocurrency that can be used as a peer-to-peer electronic
payment method, with each Bitcoin consisting of 100 million smaller units called
satoshi. It was created in 2009 by Satoshi Nakamoto who invented the Bitcoin
protocol. It does not rely on a centralised issuing body to operate as its value is
created by users. Bitcoins are created by computer operations with their value
arising from computer power. Bitcoin ‘miners’ create a block after a period of time
that is equivalent to 25 Bitcoins.
Bitcoins can be purchased via exchanges or directly from individuals in the
marketplace and can be paid for using a number of different methods including
credit/debit cards, bank transfers, alternative cryptocurrencies and even physical
cash. Bitcoin exchanges include:- Mt.Gox, which is at present the largest bitcoin
exchange, CoinSecure, Coinfloor and Cryptsy.
Bitcoins can be stored in the following formats:
Desktop Wallet – Installed wallet is stored on computer as a file. Eg. Bitcoin Core,
Hive and Bither;
Mobile Wallet – Smartphone apps that store Bitcoin allowing purchases directly
with a mobile device. Eg. Xapo, CoinPunk and Aegis;
Online Hosted Wallets –Stored on a computer controlled by someone else that is
connected to the internet and allows Bitcoins to be accessed anywhere. Eg.
Coinbase, Strongcoin and Circle;
Hardware Wallets – dedicated devices that can hold private keys electronically.
Eg. Trezor, KeepKey and Ledger USB Nano; and
Paper Wallets - Bitcoins also have the ability to be stored physically in paper
format, by generating 2 QR codes – one for receiving Bitcoins and one for
spending them. Eg. Bitcoinpaperwallet.com, BitAddress and LiteAddress.
The blockchain is a chronological record of the transfer of ownership of digital assets
and is most commonly associated with the cryptocurrency Bitcoin. A blockchain is
built by recording every transaction as a ‘block’ or file of data and incorporating a
computer code referring to the preceding block to create a permanent string of
records. The blockchain is an immutable distributed ledger that cannot be altered
making it highly transparent and unable to be used for fraudulent purposes.
Source: www.intelligenthg.com
Bank of England Chief Economist Andrew Haldane recently cited blockchain
technology as an imaginative solution to solving this issue of establishing trust in
monetary economics, with the distributed payment technology embodied in bitcoin
having real potential.
Blockchain has the potential to be a highly disruptive technology due to ability to
eradicate extensive back-office bank payment networks, significantly reducing costs
through payment ledger automation.
The World Economic Forum (WEF) has identified blockchain technology as one of its
six mega-trends in a new report in which those surveyed believe the "tipping point"
for government use of the blockchain will occur by 2023. In turn, the survey
suggested bitcoin and the blockchain would reach a "tipping point", or a point at
which it becomes broadly adopted, by 2027.
More recently it was announced that a number of the world’s largest investment
banks including JP Morgan, Goldman Sachs and Credit Suisse are collaborating to
develop common standards for blockchain technology to broaden its use across
financial services.
In theory, because blockchain is a transaction database, anything can be stored on it
and it has numerous applications. Due to its transparency and proof of fairness it can
be used in lotteries, accounting audits to verify ownership of assets, medical records
and for land registry purposes.
While it seems clear that there is the potential for blockchain-based technology (and
not necessarily crypto-currency) to become the basis of the payments market,
including micro payments, interest from large payment players does not necessarily
indicate ‘belief’. Many moves by large incumbents are easily misread – what seem
like large investments to smaller companies often are effectively just minor
explorations/tests for majors, to be dropped once a development proves ineffective.
Even if crypto-currency or, more probably, blockchain, takes off, small innovators
could well (likely would?) be rapidly overtaken by incumbent adopters with greater
traction in terms of customer (consumer and merchant) numbers.
Like other areas of financial services, regulation of the payments sector has become
more complex.
Key elements of regulation include:
National regulators;
The EU;
The Single Euro Payments Area (SEPA);
The EU’s Payment Services Directive (PSD2) which is expected to come into
force in 2017;
In the UK, the new Payment Systems Regulator (PSR). The PSR is a subsidiary of
the Financial Conduct Authority (FCA) and the new economic regulator for the £75
trillion payment systems industry in the UK. It was launched on 1st April 2015;
In the US, federal, state and local laws; and
Payment scheme memberships such as Visa Europe, MasterCard International
Inc and JCB International Co Limited.
At its heart, regulation is designed to create a legal and orderly workable market but,
in developed markets, it has also focused on anti-competitive practices and, vitally,
security.
BCG has described a ‘regulatory tidal wave’ in the US and two waves in Europe: the
first being the Single Euro Payments Area (SEPA) and the second being limits on
interchange fees.
Interchange fees are the card transaction fees earned by issuing banks. These have
been under examination for some years but there is now regulatory pressure to re-
distribute fees more fairly along the chain and the EU Interchange Fee Regulation
(EU IFR) came into force on 8 June 2015.
Chart 27 shows a very helpful fan of Regulatory initiatives with the likely timeframe on
the X-axis.
The initiatives are divided into four strands:
Risk reduction;
Standardisation;
Competition; and
Transparency.
Quite simply, the volume of initiatives in progress highlights the complexity of
regulating the rapidly-evolving payments market.
Source: World Payments Report 2015; Capgemini; RBS
While 2015 saw a continued steady stream of exits in the payments sector, we have
seen a clear pick-up in the number and, particularly, in the size of IPO’s.
Per CB Insights, overall, 2014 saw 22 exits, only one of which was an IPO. Since
2010, there have been 87 total exits in the payments space, and only seven of them
were IPOs, including QIWi, which raised $884m and Xoom, which raised $509m in its
IPO, both in 2013.
We give below a selection of the key deals in 2015.
Revenue 2014 proforma ~ $697m;
Market Cap ~ £1,651m;
Valuation ~ Market Cap/Revenue 3.6x;
Terms of deal ~ Enterprise Value of Skrill EUR1.1 billion funded via a 5 for 3
Rights Issue at 166p to raise £451m plus cash and net debt of Skrill of EUR256m;
Revenue 2014 ~ $8,025m
Market Cap ~ $43,064m
Valuation ~ Market Cap/Revenue 5.4x;
Revenue 2014 ~ £3,627m
Market Cap ~ £5,280m
Valuation ~ Market Cap/Revenue 1.5x;
IPO details ~ 900m shares at 240p to raise £2,073m for 45% of the Company
giving a Market Cap of £4,800m.
Revenue 2014 ~ $11,200m;
Market Cap ~ $13,260m;
Valuation ~ Market Cap/Revenue 1.2x
Consideration up to $21bn in cash & stock, $18.2bn up-front;
Visa Europe is the largest card network in Europe;
500 million cards, issued by 3,000 financial partners in 38 countries;
Processed €2 trillion ($2.2 trillion) in payment volume from 35 billion transactions
in 2014;
Visa Inc. 2.3m card accounts that made 82 billion transactions worth $4.7 trillion
the same year.
Revenue 2014 ~ $850m;
Share Price at IPO $9 a share;
Raised $279m;
Market Cap ~ $3,900m or fully diluted $5,500m;
Valuation ~ Market Cap/Revenue 6.5x;
CEO is Jack Dorsey, also CEO of Twitter;
Major shareholders: Jack Dorsey 24.4%; Khosla Ventures 17.3%;
Merchant acquirer focussed particularly on SME sector.
Global Payments Revenue 2015 ~ $2,770m;
Global Payments Market Cap ~ $9,235m;
Valuation ~ Market Cap/Revenue 3.3x;
Offer values Heartland Payment Systems at $100 per share or $3,675m;
Offer comprises 0.6687 Global shares and $53.28 in cash per Heartland share, a
17.5% premium;
Heartland Payments Systems Revenue 2015 ~ $2,311m;
Valuation ~ Market Cap/Revenue 1.6x.
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In this section we profile a selection of the major players in the payments industry.
We provide for each:
Business Description
Revenue Breakdown, where available
By Division; and
By Geography
Recent Operational Highlights
Key Financial Highlights
Recent Financial History
The companies covered in this section are:
ATOS
Cielo
Earthport
First Data
Fiserv
Gemalto
Global Payments
Ingenico
MasterCard
Paysafe
PayPal
Proxama
Safecharge
Square
Vantiv
Verifone
Visa
Western Union
Wirecard
Worldline
Worldpay
Atos SE (Societas Europaea) is a leader in digital services with 2014 pro forma
annual revenue of around € 11 billion and 93,000 employees in 72 countries. Serving
a global client base, the Group provides Consulting & Systems Integration services,
Managed Services & BPO, Cloud operations, Big Data & Cyber-security solutions, as
well as transactional services through Worldline, the European leader in the
payments and transactional services industry.
The Group works with clients across different business sectors: Defense, Financial
Services, Health, Manufacturing, Media, Utilities, Public sector, Retail,
Telecommunications, and Transportation.
Atos is focused on business technology that powers progress and helps
organizations to create their firm of the future. The Group is the Worldwide
Information Technology Partner for the Olympic & Paralympic Games and is listed on
the Euronext Paris market. Atos operates under the brands Atos, Atos Consulting,
Atos Worldgrid, Bull, Canopy, and Worldline.
This division accounted for 51% of Group revenue in 2014. The core business is a
range of outsourced contracts across a spread of industries including Manufacturing,
Retail & Transportation, Public & Health, Telcos, Media & Utilities and Financial
Services. Clients include Siemens, the French State railway, the DWP and NS&I in
the UK, Microsoft and McGraw-Hill.
Key geographies include the UK, Germany, France, Benelux & The Nordics, Central
& Eastern Europe as well as Iberia and North America.
Price (EUR) 74.2
Market Cap (EUR m) 7667.0
Source: Bloomberg
Holder % Holding Siemens 12.1 Blackrock. 5.1 Fidelity 2.1 Vanguard 1.7 Norges 1.5 Source: Bloomberg
Thierry Breton CEO Elie Girard CFO Phillipe Llorens CEO: Canopy Adrian Gregory CEO: UK & Ireland Source: Bloomberg
This area represented 35% of Group in 2014. Key sectors and geographies are as
per Managed Services. Clients include Nokia, Transport for Greater Manchester, AIG
and LCH Clearnet.
Created as part of the Bull integration in September 2014, this division accounted for
3% of revenue in 2014 but will be correspondingly larger on a proforma basis.
Revenue growth in 2014 was driven by the Big Data practice based on strong activity
in High Performance Computing (HPC), with sales in Germany to the Climate
Computing Center and in Benelux & The Nordics to Dutch Universities, and with
sales of the newly launched bullion machine to French public organizations.
Customer demand in the Security has been boosted strongly particularly for
encryption and access management solutions.
Separately-quoted Worldline is a full service payment processing services provider
which is 73% owned by Atos and accounted for 12% of Group revenue in 2014.
Worldline’s activities encompass 1) Services & Terminals including Commercial
Acquiring, Private Label Cards & Loyalty services, and Online services; 2) Financial
Processing & Software Licensing including Online Banking Services and Payment
Software Licensing; 3) and Mobility & e-Transactional Services, including e-Ticketing
and e-Government Collection.
In 2014,Worldline renewed all its major processing contracts, notably in Germany
and in Belgium and strengthened its European leadership position in e-wallet
processing with contracts signed with Paylib in France, BCMC and Sixdots in
Belgium, and Sparda-Bank in Germany (Masterpass). Worldline also won deals
contracts in the fourth quarter, including a contract with EDF in France for multi-
channel solutions.
Source: Bloomberg Source: Bloomberg
16 Dec 2015 - Atos signs contract in Spain to supply license plate recognition
services for border control
04 Dec 2015 - Atos launches Personal Financial Management as a Service
05 Nov 2015 - Atos launches new Anti Money Laundering and Fraud Analytics
service
03 Nov 2015 – Partnership agreement between Atos and the BRGM (French
Government Geological Survey)
03 Nov 2015 - Atos to acquire Unify from Gores and Siemens
28 Sept 2015 – Atos and Airbus Defence and Space sign a strategic agreement in
the field of cyber security
23 Sep 2015 – Atos launches new Advance Malware Detection and Remediation
Service
22 Sep 2015 – Atos signs a major smart meeting contract with EPS – leading
electricity provider in Serbia
30 June 2015 – Atos completes the acquisition of Xerox ITO.
17 June 2015- Siemens awards Atos contract to provide a platform built on SAP
HANA and based on the bullion Server for a range of digital services
11 June 2015 – Atos acquirers software solutions for IT monitoring
1 June 2015 - Atos Partners with Digital Guardian to launch new Cloud-based
Data Loss Prevention Service
9 June 2015 – Big Data: new synergy between Atos and Bull
In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 6458.3 6718.3 - Cash & Equivalents 1306.2 1620.3 + Preferred & Other 30.0 208.8 + Total Debt 400.8 631.2 Enterprise Value 5582.9 5938.0 Revenue 8614.6 9051.2 10768.4 11566.7 Growth %, YoY (2.6) 5.1 19.0 7.4 Gross Profit -- -- 10768.4 11566.7 Margin % -- -- 100.0 100.0 EBITDA 1024.6 1074.6 1191.3 1348.2 Margin % 11.9 11.9 11.1 11.7 Net Income 444.2 449.9 577.0 666.7 Margin % 5.2 5.0 5.4 5.8 EPS 4.6 4.5 Growth %, YoY 12.0 (3) Cash from Operations 595.6 640.4 Capital Expenditures (340.0) (354.1) (417.8) (461.6) Free Cash Flow 255.6 286.3 417.1 527.8
Source: Bloomberg
Source: Bloomberg
Cielo is no.1 in Brazil in merchant acquiring and payment processing in terms of
credit and debit card transaction volume. It has around 1.6m active merchants and is
present in the vast majority of Brazilian municipalities.
Established in 1995 with the name Visanet Brasil by Bradesco, Banco do Brasil,
Banco Real and Banco Nacional, along with international card network Visa.
IPO’d in 2009 and established numerous partnerships with financial institutions and
card networks in the country over the years.
From July 1, 2010 VisaNet was renamed Cielo and was no longer the only processor
of Visa cards in Brasil, following a change in regulation by the Brazilian government
whereby its main competitor, Rede, was allowed to process Visa cards, and Cielo
was allowed to process MasterCard, Diners Club and other cards which were only
processed by Redecard. Cielo also processes for Elo, a national network established
by Brazilian banks.
Cielo states that its systems processed the equivalent of 9.3% of the Brazilian GDP
in 2013, processing 5 billion transactions.
Services encompass not only point of sale card machines but also e-commerce
payment solutions and mobile device platforms designed for small businesses.
Price (BRL) 34.6
Market Cap (BRL m) 69071.1
Source: Bloomberg
Major Shareholders
Holder % Holding
Columbus 28.7 BB Bco De Investimento 28.7 Lazard Ltd 4.2 Tempo 1.4 Tempo 1.4
Source: Bloomberg
Romulo De Mello Dias CEO Clovis Poggetti Jr CFO Source: Bloomberg
13 October 2015 – Cielo European Recruitment Centre opens in Bucharest;
August 2015 Acquires 91% stake in M4U
10 August 2015 – Kami Bond joins Cielo as SVP of People and Culture;
June 2015 Acquires 30% stake in Stelo
17 June – Christian Scandella joins Cielo as Senior VP of Latin America;
5 May 2015 – Cielo Extends Partnership with Aglient Technologies into Asia
Pacific market;
6 April 2015 – Cielo expands Cielo Mobility Services in Middle East and Africa;
5 February 2015 – Seb O’Connell joins Cielo as MD of Europe
November 2014 Acquires 70% stake in Cateno cards JV with Banco do Brasil
July 2014 Announces Partnership with Smiles
In Millions of BRL FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 51562.1 65031.7 - Cash & Equivalents 423.1 3998.7 + Preferred & Other 12.1 15.3 + Total Debt 2488.5 7339.7 Enterprise Value 53639.5 68388.1 Revenue, Comparable 6734.2 7725.6 11640.9 13043.3 Growth %, YoY 24.1 14.7 50.7 12.0 Gross Profit 4184.6 4675.0 6775.0 7721.6 Margin % 62.1 60.5 58.2 59.2 EBITDA 3575.2 3838.9 5827.2 6514.6 Margin % 53.1 49.7 50.1 49.9 Net Inc, Comparable 2673.6 3219.8 3781.5 4242.6 Margin % 39.7 41.7 32.5 32.5 EPS, Comparable 1.4 2.0 2.0 2.2 Growth %, YoY 15.2 37.7 1.1 12.0 Cash from Operations 1999.5 1834.6 Capital Expenditures (91.0) (673.4) (686.1) (777.3) Free Cash Flow 1908.5 1161.2 4705.6 2252.3
Source: Bloomberg
Source: Bloomberg
Earthport offers an innovative payments framework, which is specifically designed for
high volumes of low value cross-border payments, including, but not limited to:
commercial trade transactions, pension payments and accounts payables.
Earthport’s infrastructure allows clients to clear and settle payments directly to
banked beneficiaries in over 60 countries, in an automated clearing house (ACH) like
motion. Due to its connection with local clearing capabilities across six continents,
Earthport is able to facilitate a lower cost service for money transfer companies and
more competitive remittance products.
Bank of America and BB&T use Earthport’s payments services for trade, pension and
remittance payments. Earthport is able to clear these payments through a network of
banking partners including Barclays, Bank of America, Maybank, SEB and Standard
Bank.
In relation to e-commerce, Earthport is able to offer itself as the sole provider of the
commercial agreement, with one technical connection, which can be used to send
payments to multiple locations in practically any currency. Payoneer and
hyperWALLET already use Earthport for their direct-to-bank e-commerce payments.
Source: Bloomberg Source: Bloomberg
12
5
1 1
United Kingdom
North America
Rest of the World
Rest of Europe64%
24%
6% 6%
United Kingdom
North America
Rest of the World
Rest of Europe
Price (GBp) 34.8
Market Cap (GBP m) 164.5
Source: Bloomberg
Holder % Holding Massmutual Financial Group 10.4 Henderson Global Investors 8.0 International Finance Corp 7 Norges Bank 6.5 Schroders Plc 6.2 Source: Bloomberg
Hank Uberoi CEO Christopher Cowlard COO Sajeev Viswanathan Global Strategy Daniel Marovitz President, Europe Source: Bloomberg
12 Jan 2016 – Earthport announces further expansion of its growing capabilities
with the launch of its Distributed Ledger Hub.
17 Nov 2015 - Continental Money Transfer teams up with Earthport Payment
Network for East Africa Payments
10 Sep 2015 - Japan Post Bank chooses Earthport Payment Network to provide
cross-border
18 August 2015 – Earthport announces that it has launched its first fully compliant
gateway to provide Real Time Payments via distributed ledger. Earthport
partnered with Ripple Labs, the creator and a developer of the Ripple payment
protocol and exchange network.
11 August 2015 – The Company announced an agreement to enable cross-border
services for Japan Post Bank, Japan’s largest retail bank in terms of deposits. This
partnership will provide improved customer experience and reach for cross border
consumer remittances.
6 August 2015 – Earthport announced ‘CurrencyFair,’ the peer-to-peer currency
exchange company, signed as a new client. This follows the signing of
TransferWise, Fexco Pacific, WorldRemit and BEO Group in the last 12 months.
30 July 2015 – Earthport announced that it had been selected by ‘Stripe’, the
online payments platform to provide foreign currency payment services in selected
markets.
28 July 2015 – Earthport announced Singapore as its new regional base in Asia.
The new office was chosen with the intention of providing a physical base in
Singapore as a FinTech hub for the region, supporting further expansion in
emerging trading nations across South East Asia.
22 July 2015 – The Company highlighted that it had gained 31 new customers in
2015, with 22 customers going live in 2015.
09 Dec 2014 - Standard Chartered Chooses Earthport for Global Payments
In Millions of GBP FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 06/30/2014 06/30/2015 06/30/2016 06/30/2017 Market Capitalisation 169.9 181.0 - Cash & Equivalents 9.5 30.2 + Preferred & Other 0.0 0.0 + Total Debt 0.3 0.0 Enterprise Value 160.8 150.8 Revenue, Comparable 10.8 19.3 30.0 48.0 Growth %, YoY 161.2 78.1 55.7 60.0 Gross Profit 8.6 15.7 Margin % 79.2 81.3 EBITDA (2.3) (5.3) 2.3 12.8 Margin % (21.7) (27.7) 7.8 26.7 Net Inc, Comparable (6.8) (9.0) Margin % (62.8) (46.5) EPS, Comparable (0.0) (0.0) 0.0 0.0 Growth %, YoY 15.0 (11.8) 94.7 Cash from Operations (4.4) (2.9) Capital Expenditures (0.2) (0.8) Free Cash Flow (4.6) (3.7)
Source: Bloomberg
Source: Bloomberg
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First Data’s services enable businesses to accept electronic payments, help financial institutions issue credit, debit and prepaid cards, and assist in routing secure transactions between merchants and customers.
First Data has three primary lines of business:
Global Business Solutions (GBS) which provides retail point-of-sale (POS)
merchant acquiring and eCommerce services as well as next-generation offerings
such as mobile payment services, webstore-in-a-box solutions, and the cloud-
based Clover point-of-sale operating system, which includes a marketplace for
proprietary and third-party business apps.
Global Financial Solutions (GFS) provides credit solutions for bank and non-bank
issuers. These include credit and retail private-label card processing within the US
and international markets, as well as licensed financial software systems, such as
the VisionPLUS bank processing application, and lending solutions. GFS also
provides financial institutions with a suite of related services including card
personalization and embossing, statement printing, client service, and remittance
processing.
Network & Security Solutions (NSS) provides a wide range of value-added
solutions sold to clients of GBS and GFS, smaller financial institutions, and other
clients. These solutions include electronic funds transfer (EFT) network solutions,
such as the STAR Network, debit card processing solutions, stored value network
solutions, such as Money Network, ValueLink, Gyft, and Transaction Wireless,
and security and fraud solutions, such as TransArmor and TeleCheck. This
segment also supports other digital strategies, including online and mobile
banking, and business supporting mobile wallets.
Globally, First Data believes it is:
The no.1 merchant acquirer; and
The no.1 issuer processor;
It operates in 36 countries and has clients in 118 countries.
First Data believes it has the industry’s largest network of bank partnerships for
merchant acquiring, including equity alliances with eight large banks around the
world and over 80 revenue sharing partnerships. Bank partnerships include Bank
of America Corporation, Wells Fargo, The PNC Financial Services Group,
Price (USD) 14.6
Market Cap (USD m) 13110.4
Source: Bloomberg
Frank J Bisignano CEO Joseph J Plumeri II Vice Chairman Guy Chiarello President Thomas Higgins Exec VP/CAO Christine Larsen Exec VP/COO Source: Bloomberg
Winslow Capital Management Inc 14.6 Citadel Advisors LLC 5.3 EJF Capital LLC 5.3 Goldman Sachs Asset Management 1.3 Source: Bloomberg
Citigroup, SunTrust Banks, Lloyds Banking Group, Allied Irish Banks, ICICI Bank,
and ABN AMRO Group.
The Company has a large direct sales force, and partners with over 1,100 third
parties who actively re-sell its solutions, including independent sales agents,
independent sales organizations (ISOs), payment services providers (PSPs),
independent software vendors (ISVs), and value-added resellers (VARs) who
often have specialized sales capabilities to reach into local communities, small
businesses, eCommerce channels, or specific industry verticals. It also has over
1,600 referral arrangements with bank and non-bank partners.
For GFS, First Data has a large direct sales force and reaches a broad base of
smaller financial institutions through group service providers (GSPs).
For NSS, it leverages the distribution platforms of GBS and GFS, and also
distributes through a direct sales force.
Over last three years, First Data has acquired six commerce-focused technology
start-ups: Clover, Perka, Gyft, SpreeCommerce, EasyWay Ordering, and
Transaction Wireless.
Clover is an open-architecture tablet-based integrated POS system aimed at the
SME market;
Insightics is a cloud-based analytics solution using big data behind payment
transactions for the SMB market;
TransArmor is an encryption and tokenization solution for business owners;
The acquisitions of Gyft and Transaction Wireless significantly increased
capabilities in the issuance and distribution of virtual cards.
Source: Bloomberg Source: Bloomberg
16 November 2015 - First Data and NCR Sign Strategic Commercial Agreement
15 October 2015 – First Data list on the NYSE;
1 October 2015 – First Data announces the launch of its Initial Public Offering
23 September 2015 - First Data and Pivotal Team Up to Deliver Simple and
Secure Payment Services to Spring Developers
17 September 2015 – Himanshu Patel appointed CFO of First Data;
20 July 2015 – First Data files registration statement for proposed Initial Public
Offering;
08 June 2015 - First Data to Support Launch of Apple Pay in the UK;
03 June 2015 - First Data Announces New $1.25 Billion Revolving Credit Facility;
5 February 2015 – First Data and Capgemini form Global Alliance to Deliver Next
Generation Payment Solutions;
4 February 2015 – First Data receives Data security approval from UK information
Commissioner’s Office
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- -- - Cash & Equivalents 425.3 358.4 + Preferred & Other 3251.5 3170.1 + Total Debt 22703.1 20872.2 Enterprise Value -- -- Revenue, Comparable -- -- 11377.0 11741.0 Growth %, YoY -- -- 3.2 Gross Profit 4158.7 4469.8 Margin % -- -- EBITDA 2390.5 2615.8 2619.0 2933.5 Margin % -- -- 23.0 25.0 Net Inc, Comparable -- -- 834.0 1214.0 Margin % -- -- 7.3 10.3 EPS, Comparable -- -- 0.5 1.2 Growth %, YoY -- -- 151.6 Cash from Operations 672.7 1013.2 Capital Expenditures (194.1) (308.0) (280.0) (360.0) Free Cash Flow 478.6 705.2 922.0 1246.0
Source: Bloomberg
Source: Bloomberg
Fiserv is a global provider of financial services technology. Its operations consist of
payments products and financial institution services. It is active in a broad range of
areas including e-payments, card-based transaction processing, ACH transaction
processing, account-to-account transfers and person-to-person payments, internet
and mobile banking systems.
ACH Solutions – Automated Clearing House solutions from Fiserv are intended
to increase efficiency and handle easily ever-increasing transaction volumes. Their
solution offers real time online access, automated settlement, multi-institutional
processing as well as risk mitigation tools.
ATM Solutions—Fiserv provides ATMs and card payment solutions to more than
3,200 financial institutions. Fiserv also offers total management and operations
support focused on the management of ATM networks.
Bank Platforms – Fiserv offers bank platforms around the world, and more than
one in three US banks operates on a Fiserv platform, including the Premier Bank
Platform which is used by more US financial institutions than any other account
processing platform.
Biller Solutions – Biller Solutions from Fiserv allow users to manage their bills
and payments when, how and where they want. It also lets them meet their
customers via their preferred billing and payment channels (mobile, online, phone,
in-person or mail)
Card Solutions – Card solutions from Fiserv provide complete debit, credit,
prepaid and ATM payment services to financial institutions as well as Accel, a
premier payments network. Case Management & Resolution – Fiserv offer case management, dispute
resolution systems and exceptions management technology for all payment
options
Credit & Debit Solutions - Fiserv offers an integrated, full-service credit card
management solution using a globally recognised processing platform and also
debit card processing services for Visa Debit, Debit MaterCard and Discover Debit
via the Accel debit payments network
Credit Union Platforms – Fiserv maintains one of the most complete portfolios of
account processing systems
Price (USD) 88.2
Market Cap (USD m) 20159.4
Source: Bloomberg
Holder % Holding T Rowe Price Associates 15.2 Vanguard Group Inc. 8.5 Blackrock 5.7 FMR LLC 4.3 State Street Corp 4.3 Longview Partners 3.6 Massachusetts Financial Services 3.3 Source: Bloomberg
Jeffery W Yabuki President/CEO Lynn S McCreary Chief Legal Officer Mark A Ernst Exec VP/COO Source: Bloomberg
Mobile Solutions – Fiserv offers a vast range of mobile banking , database
access and payment solutions, including Mobiliti for community banks and credit
unions which is available as an Application Service Provision (ASP) or Software
as a Service (SaaS) product and SpotPay which enables small businesses to
accept credit and debit mobile payments anywhere using a secure card reader
attached to iOS or Android mobile devices
Prepaid Solutions- Fiserv offer prepaid cards carrying the Visa or MasterCard
brands. Customers can acquire new accounts and generate year-round fee
income
Remittance Solutions – offering solutions that can help institutions to enhance
customer relationships and grow fee-based revenues and deposits
Treasury Management – designed to address the management of cash and
assets globally via a customer-centric solution which helps to increase operational
efficiencies while eliminating unnecessary capital expenditures, reducing costs
and improving and minimising losses through fraud
Walk-In Solutions – CheckFreePay has nearly 25,000 walk-in payment centres in
50 states in the US which allow customers to pay their bills in cash, in person.
Source: Bloomberg Source: Bloomberg
-1,000 0 1,000 2,000 3,000
Payments
Financial
Corporate and Other
4,219
847
United States
International
3 November 2015 - Fiserv and Early Warning Partner to Enable Real-Time Bill
Payment and Real-Time Deposit Services for U.S. Financial Institutions
6 October 2015 – 1st Advantage Federal Credit Union adds Mobiliti, Popmoney
and Mobile Source Capture to their offerings
21 September 2015 – InfoLink Services Ltd selects Fiserv as its single technology
partner for payment transaction processing
15 September 2015 – Introduces new AML compliance solution for the casino and
gaming industry
14 September 2015 - Successfully Pilots CardFree Cash at ATMs Via Accel Debit
Payments Network
4 March 2015 - Fiserv Delivers Four New Solutions for Financial Crime Risk
Management Platform
26 January 2015 - Introduces LoanLaunch to help lenders originate and close
more loans, more efficiently
15 January 2015 - Partners with HedgeACT, a hedge fund asset management
platform, to provide access to Hedge Funds in managed accounts
14 January 2015 - Launches mobile card management application
30 October 2014 – Fiserv launches Popmoney® for disbursements streamlining
payments from businesses to consumers
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 15158.1 17054.1 - Cash & Equivalents 400.0 294.0 + Preferred & Other 0.0 0.0 + Total Debt 3848.0 3803.0 Enterprise Value 18606.1 20563.1 Revenue, Adj 4814.0 5066.0 5290.7 5594.4 Growth %, YoY 8.5 5.2 4.4 5.7 Gross Profit, Adj 2078.0 2185.0 2349.1 2750.6 Margin % 43.2 43.1 44.4 49.2 EBITDA, Adj 1557.0 1648.0 1772.6 1894.4 Margin % 32.3 32.5 33.5 33.9 Net Income, Adj 658.0 717.2 929.8 998.8 Margin % 13.7 14.2 17.6 17.9 EPS, Adj 2.5 2.8 3.9 4.3 Growth %, YoY 15.7 14.8 36.1 12.2 Cash from Operations 1039.0 1307.0 Capital Expenditures (236.0) (292.0) (316.6) (289.7) Free Cash Flow 803.0 1015.0 1015.8 1098.0
Source: Bloomberg
Source Bloomberg
Price (EUR) 51.3
Market Cap (EUR m) 5117.9
Gemalto is a world leader in digital security, offering software applications and secure
devices to their clients (comprised of companies and governments). Their clients are
thus able to offer personal mobile services, payment security, authenticated cloud
access and many other services.
Gemalto’s clients come from over 180 countries and are comprised of over 30,000
enterprises, 450 mobile operators, and over 3,000 financial institutions. Some of their
most well-known clients include Banco Santander, China Mobile and Audi as well as
the governments of Algeria, South Africa and The Netherlands. The digital safety
software is developed and installed in a diverse range of products, including SIMs,
the payment cards and eID documents and others that are used to access digital
services.
In payments, Gemalto have created many products all using EMV as the underlying
technology. Their mobile products include Contactless MicroSD, The Contactless
MiniTag and The Contactless Sticker.
Contactless MicroSD - To use this product, a personalized Secure Digital card is
inserted into the mobile phone. The user is then required to download the branded
application associated with the mobile phone. This product can be used with many
of the most prominent mobile phone brands including HTC, Samsung, LG,
Motorola and Sony. This product is targeted at financial institutions, and enables
the client to own the entire mobile payment solution.
Contactless MiniTag –A product for mobile payments consisting of a tag worn
often as a watch. It is marketed as a way to pay without having to use a plastic
card, and is promoted as being more versatile than other mobile payment
solutions. This product targets young people and sports fans, as it seeks to
capitalise on emerging sectors including stadiums and corporate events. The
Source: Bloomberg
Holder % Holding Capital Group Companies Inc 14.9 Groupe BPI 8.4 Quandt S N 7.2 Euro Pacific Growth Fund 5.1 Massmutual Financial Group 3.1 Source: Bloomberg
Olivier Piou CEO Philippe Cambriel President - Europe Jacques Tierny CFO Philippe Vallee COO Claude Dahan Operations Martin McCourt Strategy & Innovation Source: Bloomberg
MiniTag can be used on public transport, social media, access control as well as
general payments.
Contactless Sticker - A sticker attached to the mobile device. Accompanied by a
downloaded app or SMS alerts, the user is able to make payments and is able to
keep a record of payments that have been made. Gemalto also advertises this
product as a strategic intermediate product, which financial institutions can use in
the transition from banking cards to mobile payments.
iPay Cover – Many versions of the iPhone do not come with NFC (near field
communication) support, meaning they cannot communicate with other devices
through touch. Gemalto offers a solution, which is a cover to place on the iPhone
which houses a Contactless MicroSD card holder. Thus the MicroSD can be
inserted, and the iPhone can be used to make payments. The iPay cover is thin,
light and discreet.
Contactless EMV Cards – EMV (the technical standard for smart payment cards
– chip and pin or contactless) is central to mobile payments. Gemalto combines
the contactless technology with the EMV technology, offering a faster and more
convenient way to make a purchase. Gemalto offers optimized chips and
operating systems for high level security and quicker transaction times. It also
offers a way to penetrate new markets (young, unbanked) and to increase the
number of transactions generating additional revenue streams.
Gemalto also provides digital security software for clients other than financial institutions such as governments. The main focus of the technology aimed at governments is to increase security and privacy. Its software has been used in applications for on-line eVoting, on-line tax payments, medical expense eClaims and on-line driving license services amongst others.
Gemalto also caters to the needs of enterprises, providing products to protect their sensitive data. The product Gemalto Identity and Data Protection enables organisations to take a data-centric approach to their security posture, while controlling access to the infrastructure and applications they rely upon. Sensitive data can thus be protected and controlled, both on-premise and in public or private clouds.
Source: Bloomberg Source: Bloomberg
0.0 500.0 1,000.0 1,500.0
Mobile Communications
Payment & Identification
Patents
1,127.8
500.9
478.7
357.7
Europe, Middle-East,and Africa
Asia
United States OfAmerica
North & SouthAmerica
4 December 2015 - Gemalto, Orange, RATP and SNCF join forces to create
Wizway Solutions
17 November 2015 - Gemalto partners with NetApp to deliver integrated cloud
storage and data security solution for Amazon Web Services customers
29 September 2015 –launches Saudi Arabia’s first contactless EMV bank card
with Riyad Bank
14 September 2015 – introduced the Cinterion Secure Element – a tamper-
resistant component embedded in industrial Internet of Things (IoT) solutions to
enable advanced digital security and lifecycle management.
3 September 2015 –announced a partnership with Samsung to accelerate the use
of Samsung Pay through Gemalto’s Allynis Trusted Service Hub (TSH).
1 September 2015 –announced the launch of the industry’s first LTE Category 1
wireless module to revolutionise highly efficient 4G LTE connectivity.
29 July 2015 – announced SafeNet Luna SA 6, the first hardware security module
(HSM) purpose-built for service providers to offer on-demand crypto processing,
key management and key storage in the cloud.
6 July 2015 –announced the launch of wristbands embedded with its Optelio
Contactless Chip for NFC transport in Wuhan, China.
2 July 2015 –NTT Docomo, the largest mobile operator in Japan, selected
Gemalto to enable connectivity for IoT applications.
30 June 2015 –released SafeNet Multi-Link High Speed Encryptor (HSE) which
provides the equivalent of 10 by 10 Gbps high-speed encryptors in one unit.
19 May 2015 – Gemalto announced it was selected by BancNet, a Philippines-
based interbank network, to secure its mobile banking services.
6 May 2015 – Gemalto announced the launch of Sealys Premium inlays and
eCovers for electronic passports.
5 May 2015 – supplies Saracens rugby club prepaid wristbands which offer fans
fast and secure contactless payment for food and drink at Allianz Park stadium.
In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 6902.7 5897.2 - Cash & Equivalents 456.4 1059.6 + Preferred & Other 5.1 5.5 + Total Debt 6.9 566.2 Enterprise Value 6458.3 5409.3 Revenue, Adj 2388.6 2465.2 3121.9 3358.5 Growth %, YoY 6.4 3.2 26.6 7.6 Gross Profit, Adj 929.1 943.1 1223.8 1340.8 Margin % 38.9 38.3 39.2 39.9 EBITDA, Adj 398.3 422.8 554.4 607.5 Margin % 16.7 17.2 17.8 18.1 Net Income, Adj 258.9 240.4 293.8 364.7 Margin % 10.8 9.8 9.4 10.9 EPS, Adj 2.9 2.7 Growth %, YoY 26.2 (7.5) Cash from Operations 259.5 296.4 Capital Expenditures (63.4) (81.9) (149.5) (143.7) Free Cash Flow 196.1 214.5 149.6 293.1
Source: Bloomberg
Source: Bloomberg
Global Payments Inc provides full-service payment processing and also PCI
compliance assistance and integrated solutions. Headquartered in Atlanta, Georgia
with approximately 4,500 employees worldwide, Global Payments is a Fortune 1000
Company with merchants and partners in 29 countries throughout North America,
Europe, the Asia-Pacific region and Brazil. it is authorised to transact in more than 80
currencies, servicing 1.5m merchants, and processing over 6.5bn transactions
settling $400bn per annum.
The Group provides customers with the ability to accept all payment types across a
variety of distribution channels, including ecommerce online and mobile payment
solutions, in-person purchasing and merchant tools. Global Payments Inc's
integrated technology solutions division includes the OpenEdge platform and
extended payment gateway, supported by the Value Added Reseller (VARs)
programme. In addition, Global Payments Inc has forged many successful
partnerships with enterprises, banks and ISAs to provide acquiring, processing,
network communication and consumer money transfer services.
Bigcommerce- online ecommerce solution is a fully integrated, robust
ecommerce platform that provides simple, easy configuration and branding of an
online store to quickly enable ecommerce sales and revenue. It provides fast,
reliable processing of online sales all in one PCI-certified solution.
PayApp – an MPOS mobile card reader and app that allows merchants to accept
card payments from their iPhone, iPad or Android Smartphone. It includes a free
mobile application, a free card reader and a PayApp Mobile account which offers
useful features like discounts, sales tax, inventory mode and email receipts.
Mobile Register & Talech POS - an iPad point of sale that is ready to go in
minutes. Process credit cards, accept cash or cheque, with sales and inventory
insights available right from a mobile phone.
In-Person Solutions - provide access to all major forms of payment processing
including: credit/debit and purchasing card, electronic benefits transfer processing,
financial EDI services, money transfer, stored valued cards, gift & loyalty cards,
Source: Bloomberg
Price (US$) 61.4
Market Cap (USD m) 7969.7
Holder % Holding T Rowe Price Associates 8.2 FMR LLC 7.4 Vanguard 6.9 Blackrock 6.7 Artisan Partners Ltd 3.7 Source: Bloomberg
Jeffrey S Sloan CEO Cameron M Bready CFO David E Magnum COO Source: Bloomberg
POS equipment, verification and recovery services and merchant accounting and
web-based reporting.
Merchant Tools – include a smart dispute manager portal to access cases online;
Global Access @dvantage an integrated, web-based payment information
management tool and e-statements electronic access to reporting statements.
Enterprise- Adopt a partnership approach to deliver creative, reliable secure
payment solutions that provide long-term value. International eCommerce
capability for multinational merchants who require "card not present" support
across multiple countries which includes approximately 140 transaction currencies
and 15 like-for-like settlement currencies A broad range of value-added services
and products including dynamic currency conversion, tax-free, loyalty, card types.
Banks- Merchant referral programme, provides preferred pricing with no hidden
fees or added costs, unparalleled customer service and best-in-class payment
processing solutions.
Independent Sales Organisations (ISOs) - innovative point-of-sale equipment,
fully compliant to PCI standards. My.GlobalPay is a secure, web-based data and
business management tool designed to help ISOs effectively manage a growing
merchant portfolio. Use for merchant enrolment, transaction information, reporting
and archiving, and risk management.
Independent Sales Agents (ISAs) – provide credit/debit and cheque services All-
in-one statements for MasterCard, Visa, and Discover. The jump start programme
provides an income source while the business and sales portfolio expands. Allows
for an aggressive revenue share compensation and equipment sales and leasing
programmes to add further income.
Source: Bloomberg Source: Bloomberg
1,656 616
313
189
United States
Europe
Canada
Asia-Pacific
60%
22%
11% 7%
United States
Europe
Canada
Asia-Pacific
15 December 2015 - Global Payments to acquire Heartland Payment Systems for
$4.3bn, combining leading payments technology company
23 November 2015 - Global Payments Partners with talech to Offer Industry-
Leading EMV Tablet Solution to U.S. Merchants
17 November 2015 – announces support for apple Pay in Canada
7 October 2015—announce Q1 Earnings and raises Annual Fiscal 2016 Outlook
10 September 2015 - announces full support for android pay in the US.
8 September 2015 – Yiftee a leading worldwide provider of payment technology
services is to enable seamless mobile gift card solution for Global Payments'
merchants
25 August 2015 – signs an agreement with Apriva to provide secure, EMV™
Mobile Point of Sale Solutions to U.S. Merchants
27 July 2015 - Global Payments and CaixaBank announce Central and Eastern
European joint venture with Erste Group Bank
22 June 2015 - announces full-service acquiring for American Express small
business merchants with the roll-out of OptBlue™ in Canada
15 June 2015 - announces support for Apple Pay in the UK
4 June 2015 - partners with Virtual Next to offer mobile payment, gift and loyalty
solution to Canadian merchants
27 April 2015 - launches EMV™ and contactless mobile payments solution in
Canada
25 March 2015 - acquires Realex Payments, a payment gateway for online
retailers, expanding its International e-commerce offerings
17 December 2014 - Global Payments and Bank of the Philippine Islands form
strategic Joint Venture
In Millions of USD FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 05/31/2014 05/31/2015 05/31/2016 05/31/2017 Market Capitalisation 4720.1 6813.8 - Cash & Equivalents 581.9 650.7 + Preferred & Other 135.6 105.6 + Total Debt 1833.8 2335.1 Enterprise Value 6107.6 8603.8 Revenue, Adj 2554.2 2773.7 2932.2 3086.9 Growth %, YoY 7.5 8.6 5.7 5.3 Gross Profit, Adj 1602.0 1751.6 1848.5 1937.3 Margin % 62.7 63.2 63.0 62.8 EBITDA, Adj 526.0 602.7 669.9 722.9 Margin % 20.6 21.7 22.8 23.4 Net Income, Adj 244.2 282.4 378.1 414.9 Margin % 9.6 10.2 12.9 13.4 EPS, Adj 1.7 2.1 3.0 3.3 Growth %, YoY 4.7 24.7 41.4 11.1 Cash from Operations 194.1 424.7 Capital Expenditures (81.4) (92.6) (95.6) (102.1) Free Cash Flow 112.7 332.2 441.8 460.9
Source: Bloomberg
Source: Bloomberg
Ingenico Group is a provider of payment solutions, enabling banks and merchants to
manage their payment activities across all sale channels (in-store, on-line and
mobile). The focus is on innovation and transaction security, and it considers itself as
a 'leading global digital payment service provider.' Products & services are split into
three categories: Smart Terminals, Payment Services and Mobile Solutions.
The focus is on ensuring merchants are equipped to offer customers payment
convenience, simplicity and fluidity, with the aim of increasing sales conversion rates.
The group offers a range of smart terminals, including desktop terminals, portable
terminals, unattended terminals, biometric terminals (operated by use of fingerprints)
and retail terminals. Ingenico has been regarded as a terminal industry leader for the
last 30 years. It deploys the largest number of terminals with the most advanced
technologies. The operating system used by these terminals is branded as having
security at the core, with an openness to the web standard and web-based
environment.
This service is part of the overall group and focuses on ensuring that payment
services are seamless, regardless of the channel they are being used for. Payment
Services provide merchants with solutions across 170 countries. This is achieved
through offering over 150 local and international payment methods whether they are
card-based, in apps or via digital wallets or QR codes. With Ingenico Collect, a one-
stop payment solution is provided for merchants looking to grow their business in
Europe by expanding into new countries, through a single provider for all payments.
Alternatively GlobalCollect is aimed at merchants looking to expand to new
geographies who are looking to outsource their payment processes. This takes care
of risk management, FX management, settlement of funds, reporting and remittance
of collected funds, with the aim of enabling the merchant to focus on other areas of
their business.
Price (EUR) 112.7
Market Cap (EUR m) 6873.6
Source: Bloomberg
Holder % Holding Jupiter Investment Mgmt 5.5 BPI Financial Corp 5.5 Allianz Global Investors Europe 5.3 Allianz SE 4.5 BNP Paribas 4.1 Source: Bloomberg
Philippe Lazare CEO Davud Szczepanski COO Stephen Buchner e-Payments Michel Leger Innovation Kesh Talwar Payment Strategy Nathalie Lomon Finance Source: Bloomberg
The third strand of Ingenico provides mobile Point of Sale solutions to more than
100,000 merchants worldwide with the aim of boosting sales for their merchant
clients. It offers three different products:
In Store mobile point of sale - this technology enables customers to check
inventory and product information using their mobile device, which eliminates lost
sales from long queues and service interruptions. It enables customers to check
out from the aisles and provides a more personal shopping experience as the
customer is able to provide recommendations and review past orders.
Out of store mobile point of sale - this allows card payments out of the store. This
could include in pop-up stores, or even when delivering products to a house. This
enables growth of business outside a shop creating new revenue channels. The
card payments are securely accepted in real time, reducing risk of fraud or
chargebacks.
On-board mobile point of sale - this is targeted at customers that are travelling. It
offers services such as seat upgrades, booking management, onward travel, on
board purchases whilst customers are travelling on planes or other forms of public
transport. The advantages of this include improved fare enforcement as well as
reduced queues and increasing customer satisfaction.
Ingenico’s ethos is rooted in a drive for innovation which is built on a strong focus on
research and development activity, and targeted acquisitions.
Source: Bloomberg Source: Bloomberg
0
1,001
1001
472 0 0 Revenue by
Measure
Terminals andSolutions forElectronicTransactionsRevenue byGeography
Europe - SEPACountries
0%
41%
40%
19% 0% 0%
Revenue by Measure
Terminals andSolutions forElectronicTransactions
Revenue byGeography
12 January 2016 - Ingenico Group presents The Estate Manager, its new terminal
management solution
23 November 2015 - Ingenico Group joins forces with Think&Go to deploy a first
connected screen integrating contactless multi-payment for BNP Paribas
12 November 2015 - Ingenico Group and Aava Mobile launch the first fully
integrated tablet with contactless payment
28 October 2015 - Ingenico Group’s ePayments division launches Ingenico
Connect, a new Integration and Mobile-Optimized Checkout Solution
18 June 2015 – Ingenico Payment Services, the flagship brand for digital
transactions, teams up with Google Inc. to help online merchants boost their
business abroad with a joint programme called the Export Accelerator.
2 April 2015 – Ingenico Group and Intel Corporation announced a collaboration to
combine Intel technology and Ingenico Group secure payment acceptance for the
Internet of Things.
17 March 2015 – Ingenico Group announced the launch of a payment acceptance
pilot solution specifically designed for the Curie Institute’s campaign against
cancer in France (A daffodil for Curie), enabling passers-by with contactless
payment cards to make a donation to the Curie Institute by flashing their cards in
front of advertising screens.
3 March 2015 – Ingenico Group announced that Allianz Hungaria, a leading
insurance company, chose Ingenico Mobile Solutions’ mPOS to fully equip the 800
sales agents of its network with mobile payment solutions by the end of the year.
20 January 2015 – Ingenico Group announced that it owned 100% of ROAM,
who's mCommerce platform consists of secure mobile card readers, mobile Point-
of-Sale (mPOS) application, an innovative mobile payments engine.
In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 3093.9 5013.1 - Cash & Equivalents 352.1 426.4 + Preferred & Other 1.2 2.1 + Total Debt 648.5 1190.6 Enterprise Value 3391.5 5779.4 Revenue, Adj 1370.9 1607.3 2186.8 2400.5 Growth %, YoY 13.6 17.2 36.0 9.8 Gross Profit, Adj 599.7 729.9 983.6 1075.9 Margin % 43.7 45.4 45.0 44.8 EBITDA, Adj 280.0 370.3 500.7 555.7 Margin % 20.4 23.0 22.9 23.1 Net Income, Adj 130.5 182.9 274.1 313.0 Margin % 9.5 11.4 12.5 13.0 EPS, Adj 2.3 3.1 Growth %, YoY 31.4 33.3 Cash from Operations 216.4 304.9 Capital Expenditures (40.2) (51.7) (63.6) (67.3) Free Cash Flow 176.2 253.2 289.3 313.1
Source: Bloomberg
MasterCard operates the world’s fastest payment processing network, operating in
more than 210 countries and territories. It offers end-to-end processing products and
solutions, processing billions of payments across the globe and building economic
connections that accelerate business.
Its three-tiered approach starts with a franchise model, which boasts a strong
portfolio of brands and products including MasterCard, Maestro, Cirrus and
MasterCard PayPass. The processing tranche allows rapid adoption of new ways to
pay and finally the advisory portion of the business provides industry leading insight
and solutions that advance commerce by making the payment process faster and
more secure. MasterCard is the only payment brand that provides its US cardholders
with identity theft protection and detection services free of charge via its partnership
with CSID.
MasterCard PayPass is a “tap n go” purchase system, which allows consumers to
use their contactless cards to pay for their items via the NFC chip. The chip passes
sends payment information to a secure reader at the point of sale
Along with the MasterCard debit card, Maestro offers a debit card service from
MasterCard. It is a Global network, with 1.2 million retail locations in the UK, 13
million around the world and 1.9 million ATMs. It provides PIN-based, direct cash
access from your bank account home and abroad.
Cirrus is a worldwide interbank network operated by MasterCard Worldwide. It links
MasterCard, Maestro, Diners Club credit, debit and prepaid cards to a network of
around 1 million ATMs globally.
The MasterPass by MasterCard is a digital wallet designed to make online shopping
safe and easy, by enabling the user to store all of their information in one convenient
and secure place. MasterPass is currently live in 24 countries.
Price (USD) 91.6
Market Cap (USD m) 102890.5
Source: Bloomberg
Holder % Holding
Mastercard Foundation 10.5 Blackrock 5.2 Vanguard Group 5.1 FMR LLC 4.7 T Rowe Price Associates 3.3 Source: Bloomberg
Ajaypal S Banga President/CEO Martina Hund-Mejean CFO Timothy H Murphy Chief Franchise Officer Walter M Macnee Vice Chairman Juan Rajlin Treasurer Barbara L Gasper Senior VP Julienne Loh Senior VP Source: Bloomberg
MasterCard rePower allows eligible MasterCard or Maestro prepaid cards to be
topped-up via a rePower merchant. Customers can take their card into the merchant
along with the cash they want to load onto the card. The card is then verified by the
merchant's Mastercard rePower device, either by swipe or Chip & Pin and the money
is then loaded onto the card.
MasterCard supports the use of MasterCard cards with Apple Pay.
Source: Bloomberg Source: Bloomberg
(4,000)(2,250) (500) 1,250 3,000 4,750
Transaction Processing…
Domestic Assessments
Cross-border Volume Fees
Other Revenues
Rebates and Incentives…
5,778.5
3,694.5
Other
United States
6 January 2016 - MasterCard and Coin Sign Agreement to Power Wearable
Payments
16 September 2015 – MasterCard launches its “Take 5 to Protect Yourself”
initiative to encourage cardholders to sign up for MasterCard ID Theft Alerts
10 September 2015 – MasterCard Digital Enablement Service (MDES) announces
it will power safe and secure payments with Android Pay
8 September 2015 – MasterCard announced the launch of Digital Enablement
Express, which expedites the process of digitising and tokenising MasterCard
accounts through the MDES
18 August 2015 –Announces a pilot programme with First Tech Federal Credit
Union that will enable First Tech employees to verify transactions using biometrics
30 July 2015 – Citibank India and MasterCard launch Citi MasterPass; the first
global wallet in India
30 July 2015 – MasterCard and Samsung Electronics announced they are
leveraging MDES to deliver Samsung Pay in Europe
15 July 2015 – MasterPass launches in Brazil
14 July 2015 – MasterPass launches in Hong Kong
14 July 2015 – Apple Pay available to MasterCard customers in the UK
30 June 2015 – MasterCard and Parkeon announced the launch of “City
Connector”, a unique means to deliver offers and services from local businesses
via on-street parking meters
19 May 2015 – MasterCard launches MasterCard Send, a personal payments
service that enables funds to be sent quickly and securely to consumers
domestically and internationally
27 April 2015 – MasterCard announces the acquisition of Applied Predictive
Technologies, the leading cloud-based analytics provider
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 99769.7 99304.7 - Cash & Equivalents 6295.0 6305.0 + Preferred & Other 11.0 34.0 + Total Debt 0.0 1494.0 Enterprise Value 93485.7 94527.7 Revenue, Adj 8346.0 9473.0 9713.9 10827.3 Growth %, YoY 12.9 13.5 2.5 11.5 Gross Profit, Adj -- -- 8353.9 9311.5 Margin % -- -- 86.0 86.0 EBITDA, Adj 4856.0 6276.9 5652.0 6470.6 Margin % 58.2 66.3 58.2 59.8 Net Income, Adj 3173.8 3721.6 3822.0 4332.4 Margin % 38.0 39.3 39.3 40.0 EPS, Adj 2.6 3.2 3.3 3.9 Growth %, YoY 18.8 22.1 4.8 16.8 Cash from Operations 4135.0 3407.0 Capital Expenditures (155.0) (175.0) (185.9) (210.9) Free Cash Flow 3980.0 3232.0 3922.6 4240.4
Source: Bloomberg
Source: Bloomberg
Paysafe is a global provider of online and mobile payment processing services, to
both merchants and customers. It is active in over 200 countries with over 100 types
of payment and multi-currency options. Its Payment Cloud allows instant, on demand
and unbreakable frictionless commerce through all payment channels.
Within its services, Paysafe offers:
Paysafe Processing - a secure payment gateway. Paysafe is able to process
payments between merchants, banks and card schemes and facilitates a broad
range of payment types, including customisation and real-time options;
Own-branded digital wallets and stored value cards – NETELLER and Skrill which
allow the consumer to hold cash on-line or offline through prepaid Mastercards;
paysafecard – which is a Pay As You Go top up card designed for the consumer
who does not have a bank account or credit card. Paysafecard is a world leader,
available at 500,000 sales outlets in 41 countries;
Paysafe Card Solutions – Paysafe is a MasterCard-authorised issuer and so is
able to issue MasterCard products, thereby acting as the issuing bank, including
its Net+ card which can be used anywhere MasterCard is accepted;
Paysafe Acquiring which operates merchant accounts, enabling businesses to be
able to collect Visa and MasterCard payments;
White label solutions - Payolution provides payment in instalment and monthly
invoicing for merchants in the D-A-CH (Germany-Austria-Switzerland) region and
includes a 100% payment guarantee for the merchant; and
Mobile Engagement through Fans Entertainment which provides data analytics for
sports teams, artists, promoters and festivals.
Price (GBp) 351.8
Market Cap (GBP m) 1646.0
Source: Bloomberg
Old Mutual Global Investors 12.2 Franklin Resources 7.2 Ameriprise Fin Grp 4.7 Fidelity Management & Research 4.6 Thornburg Investment Management 4.4 Source: Bloomberg
Joel Leonoff President/CEO Brian David McArthur-Muscroft
CFO
Danny Chazanoff COO Matthew Jones Secretary Jessica Stalley Head of Investor
Relations Elliott Wiseman General Counsel Source: Bloomberg
Source: Bloomberg Source: Bloomberg
25%
31%
44% Prepaid
Digital Wallet
Processing
50%
26%
24%
Europe
N America
Asia / ROW
8 January 2016 – Trading update – 2015 revenue and adjusted EBITDA expected
to be ahead of market expectations.
23 December 2015 – First day of dealings on the Main Market of London Stock
Exchange
11 December 2015 – Placing of 35,106,454 shares held by CVC Capital Partners
and Investcorp at 346p. Following Placing CVC and Investcorp no longer hold
shares in the Company.
9 November 2015 – Optimal Payments Plc renamed Paysafe Group Plc and the
new website address is www.paysafe.com;
13 October 2015 –Continuing to seek admission to listing on the premium
segment of the Official List on the London Stock Exchange’s Main Market. On
completion, it is expected to be eligible for inclusion in the FTSE 250, though the
earliest possible date is expected to be the quarterly review in March 2016;
29 October 2015 – Customers Personal Data Breaches. As a result of media
enquiries, the Company was made aware that a small amount of customers’
personal data is in the public domain resulting from data breaches in 2011 or
before in NETELLER and in 2012 or before in Moneybookers (now part of Skrill);
3 September 2015 – Moody’s assigned a definitive Ba2 rating to Optimal
Payments following the Skrill acquisition.
20 August 2015 – Optimal Payments announced the completion of the acquisition
of Skrill. The Skrill Group is one of Europe’s leading digital payments businesses
providing digital wallet solutions and online payment processing;
28 May 2015 –acquired a Montreal – based mobile platform developer FANS
Entertainment Inc. for C$16m. It was acquired to offer an application with analytics
for merchants to engage more directly with their customers;
21 May 2015 – Announced the consolidation of Meritus and GMA, acquired in July
2014, are being managed as one integrated business unit together with the
NETBANX Straight Through Processing business.
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 883.6 870.6 - Cash & Equivalents 164.4 142.3 + Preferred & Other 0.0 0.0 + Total Debt 10.9 127.8 Enterprise Value 730.2 856.0 Revenue, Comparable 253.4 365.0 581.6 851.6 Growth %, YoY 41.5 44.0 59.4 46.4 Gross Profit 131.9 189.1 293.7 446.7 Margin % 52.1 51.8 50.5 52.5 EBITDA 46.8 80.9 129.7 241.2 Margin % 18.5 22.2 22.3 28.3 Net Inc, Comparable 32.0 68.1 85.7 168.8 Margin % 12.6 18.7 14.7 19.8 EPS, Comparable 0.1 0.2 0.3 0.4 Growth %, YoY 1353.3 93.6 7.8 38.6 Cash from Operations 100.3 47.4 Capital Expenditures (13.6) (11.1) (19.2) (25.5) Free Cash Flow 86.7 36.3 87.3 209.6
Source: Bloomberg
Source: Bloomberg
PayPal is a convenient and cost effective global payments platform that is available
in 203 markets, and over 100 countries. It has a customer account network of 169
million which contributes towards creating an open and secure payments ecosystem.
New customers can simply register to PayPal, providing card details which are saved
to their account. Once they have registered they are provided with a username and
password, which is all that is required going forward to make online payments.
In addition, users can withdraw funds from their PayPal account straight into their
bank account in 57 currencies, and hold balances in their PayPal account in 26
currencies.
In November, PayPal completed the acquisition of Xoom which will broaden its reach
for affordable payments around the world, using a mobile phone, tablet or computer
in 40 countries including Mexico, India, the Philippines, China and Brazil.
PayPal offers a solution for merchants to be able to manage all of their payments via
a single PayPal account. Once they have signed up, businesses can immediately
start accepting payments online. The PayPal checkout button can be added to the
website to allow express checkout for customers. They also offer Website Payments
Pro, which unites the merchant account, payment gateway and PayPal checkout for
£20 per month plus transaction fee.
PayPal Here is an app which is designed to allow retailers to start accepting card
payments in store immediately. A one-off fee buys the card reader which can be
positioned at the checkout. The merchant can then download the PayPal Here app
on their smartphone or tablet and sign up to the service, linking their account to their
merchant bank account. Once they have completed the registration, the app can be
linked to the card reader via Bluetooth. The system is then ready for use. The app
also allows for receipts to be printed or, alternatively, to send them to the customer
via text or email. The card reader is able to accept contactless payment and also
NFC enabled devices such as a smartphone mobile wallet, or smart watch. The
retailer will only incur the original one-off fee of the card reader (between £49-£60),
and then a 2.75% fee per transaction.
Price (USD) 33.1
Market Cap (USD m) 40474.6
Source: Bloomberg
Holder % Holding Omidyar Pierre 7.1 Vanguard Group Inc. 5.0 Fidelity Management 2.2 Blackrock 1.4 Oppenheimer Funds Inc. 1.4 Source: Bloomberg
Daniel Schulman CEO John Rainey CFO Tom Keithley Chief Risk Officer James Barrese Chief Technology Officer Source: Bloomberg
Venmo is an authorised delegate of PayPal, which enables users to send money
instantly using money held in their Venmo account or they can link up their account to
a bank account or debit card. Simple payments such as splitting the bill for a meal or
paying back money owed to friends can be made by the press of a button. Money
held in a Venmo account can then be moved to the user’s bank account in one
business day.
PayPal One Touch simplifies PayPal’s checkout experience even more by recording
the username and password of a user’s PayPal account for 6 months. Customers are
able to click “checkout with PayPal” to complete a purchase, removing any need for
typing in bank details or re-entering login details each time.
PayPal Beacon allows merchants to make check in pretty much automatic for
consumers, by letting them pay with an image of their face that appears on a
merchant’s POS screen, or alternatively via a Payment Code. This technology
enables consumers to make purchases by scanning a QR code on their mobile
phone, or receiving a four-digit code on their phone to complete a purchase. Once
ready to pay, the user opens the PayPal app, or the merchant’s app and checks in.
Once complete, the app prompts you with a QR code or a four-digit code to
authenticate the purchase. If the merchant has a barcode/QR scanner they can scan
the relevant code to complete the payment. If they do not, they can enter the four-
digit code into the PIN pad at checkout to finish.
This service is only offered by PayPal through Samsung fingerprint enabled devices.
This system saves your fingerprint to the PayPal app, and allows customers to pay
with just a swipe of their finger. Consequently, users no longer need to share their
bank information with the merchant as it is kept safely stored with PayPal.
PayPal PassPort is designed to help merchants expand their sales internationally by
providing country specific guidance around cultural customs, shipping and distribution
logistics, customs and taxes, currency exchange and seasonal sales peaks and
troughs. It is a website focused around educating small businesses on how they
might best tap into the international market.
Source: Bloomberg Source: Bloomberg
0 2,000 4,000 6,000 8,000
Transaction Revenues
Other Value Added Services
3,877.02,993.0
1,155.0
U.S.
Rest of World
United Kingdom
10 December 2015 - PayPal Launches Merchant Pilot with Alibaba Wholesaler
20 November 2015 - PayPal Partners with Airbnb to Let Friends & Family Meet
Halfway
12 November 2015 – PayPal completes acquisition of Xoom
19 August 2015 – PayPal acquires Modest, a service which allows merchants to
offer an end-to-end experience that makes selling on any platform easier and
simpler. This means PayPal will offer a complete commerce solution including
payments and order management;
6 August 2015 – Samsung smart TV users now able to pay with PayPal on their
TV;
28 July 2015 – PayPal unveils new research on Chinese cross-border shoppers,
revealing opportunity for U.S. merchants to expand global sales;
20 July 2015 – PayPal lists on Nasdaq and completes separation from eBay Inc;
1 July 2015 – PayPal acquires Xoom Corporation, a leader in international
remittances, for $25 per share;
9 April 2015 - PayPal makes acquisition of CyActive official;
2 April 2015 – PayPal makes acquisition of Paydiant
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- -- - Cash & Equivalents 1925.0 2230.0 + Preferred & Other 0.0 0.0 + Total Debt 1103.0 1093.0 Enterprise Value -- -- Revenue, Comparable -- -- 9199.4 10686.6 Growth %, YoY -- -- 16.2 Gross Profit -- -- 5832.4 6700.5 Margin % -- -- 63.4 62.7 EBITDA 1544.0 1784.0 2496.6 2911.5 Margin % -- -- 27.1 27.2 Net Inc, Comparable -- -- 1548.3 1848.0 Margin % -- -- 16.8 17.3 EPS, Comparable -- -- 1.3 1.5 Growth %, YoY -- -- 18.6 Cash from Operations 1993.0 2220.0 Capital Expenditures (391.0) (492.0) (817.6) (870.9) Free Cash Flow 1602.0 1728.0 1831.3 2003.4
Source: Bloomberg
Source Bloomberg
Proxama PLC is an international mobile commerce company operating across two
divisions specialising in proximity marketing via mobile and providing end-to-end
solutions for card issuers to migrate customers from magnetic stripe credit and debit
cards to contactless mobile payments.
Proxama provide end-to-end digital solutions to banks and card issuers to securely
transition their card portfolio onto mobile for Near Field Communication (NFC)
contactless payments as well as solutions for EMV enablement, Electronic PIN
Delivery, tokenisation and card issuance management.
Proxama provides end-to-end support for cloud based (HCE) payments and
network/vendor payment models, combining Proxama’s trusted and mature EMV
(Europay, Mastercard, Visa) components with Token and Credential Management.
The Proxama Network (TapPoint) is the UK’s largest independent network of
Bluetooth beacons. By partnering with media owners to deploy beacons across their
media real estate – this gives media operators the opportunity to engage in real-time
with millions of consumers via their mobiles, in high footfall locations and in areas of
high dwell.
Price (GBp) 1.6
Market Cap (GBP m) 15.8
Source: Bloomberg
Holder % Holding Breeze Gavin 14.7 Octopus Investment Ltd 12.1 Garnel Neil 11.8 Hargreave Hale Lts 7.4 TD Direct Investing 3.5 Source: Bloomberg
John Kennedy Interim CEO/CFO Mike Woods CEO: Payments Source: Bloomberg
Source: AWS RoadShow Cambridge – Proxama Customer Presentation
Source: www.nfc-ready.eu Source: Google Stock Image
Source: Bloomberg Source: Bloomberg
0.00 0.20 0.40 0.60 0.80
Investment Activities
78%
18%
4%
UnitedKingdom
Rest of World
United Statesof America
17 December 2015 - Proxama Announces New Contract the client has agreed to
an upfront payment of close to $1 million to have total access to Proxama's EMV
processing services
10 December 2015 - New contract win with a North American bank. A two year
contract to supply, install and maintain a network of proximity services for 10,000
mobile touch points across the bank's national branch network in North America
8 December 2015 – Proxama announces Eddystone compatability to enhance
mobile proximity technology offering.
17 November 2015 - Proxama Network™ brings beacon technology to blowUP
media’s East London banner package.
21 September 2015 - Half Yearly Results For the six months to 30 June 2015
16 September 2015 - New Contract Win. new contract win with a leading Middle
Eastern bank, commencing in September 2015
7 September 2015 - Proxama and Stanchion join forces allowing card issuers to
plug-and-play new mobile services
27 August 2015 - Proxama and Sygnity join forces allowing card issuers to plug-
and-play new mobile services
31 July 2015 - New Contract Win. new contract win with the South African
franchise of the Standard Bank of South Africa-owned Diners Club. The contract
commences in July 2015
22 July 2015 - Proxama provides enhanced electronic PIN distribution for major
European Payment Processor customer
19 May 2015 - Proxama Announces New Contract with Exterion Media and The
Award of a £1 million Government Grant
18 May 2015 - Proxama and Eye Airports Bring Beacon Technology to UK’s
Busiest Airports
18 March 2015 - South Africa’s Tutuka Joins EMV Club with Proxama
In Millions of GBP FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 22.4 22.2 -- -- - Cash & Equivalents 7.5 5.5 -- -- + Preferred & Other 0.0 0.0 -- -- + Total Debt 0.5 1.1 -- -- Enterprise Value 15.5 17.8 -- -- Revenue, Comparable 0.8 0.7 6.9 16.0 Growth %, YoY -- (19.9) 959.9 131.9 Gross Profit 0.4 (0.1) -- -- Margin % 48.1 (13.9) -- -- EBITDA (3.1) (5.6) (2.2) 4.5 Margin % (386.8) (863.1) (31.9) 28.1 Net Inc, Comparable (3.2) (5.5) -- -- Margin % (390.7) (851.5) -- -- EPS, Comparable 0.0 0.0 0.0 0.0 Growth %, YoY -- 12.5 71.4 -- Cash from Operations (2.4) (5.8) -- -- Capital Expenditures 0.0 (0.2) -- -- Free Cash Flow (2.4) (6.0) -- --
Source: Bloomberg
Source: Bloomberg
SafeCharge provides advanced technologies and services that simplify online and
mobile payments, maximising the performance of each merchant checkout flow. They
have a diversified, blue chip client base and are a trusted payment partner for
customers from various e-commerce verticals.
SafeCharge's advanced personalised check-out solutions (“Cashier”) allows
merchants to customise the experience across all digital devices, and provides a
comprehensive payment solution that includes secured connectivity to financial
institutions, advanced risk management platform and a Payments Management and
Analytics component.
Cashier is a payment page solution designed to deliver a personalised experience at
checkout. It is able to offer options including language, currency and previous
payment methods and remember those choices for the future via an easy-to-use
interface.
SafeCharge’s Merchant Risk Support Interface (MRSI) lets merchants interact with
each case logged. It also supplies real time alerts for flagged transactions and
documents the actions on each transaction for internal auditing.
The SafeCharge Payment Processing Platform links merchants to a network of
acquiring banks and local alternative payment providers. The platform makes use of
Smart Routing to ensure merchant payments are sent to the most suitable payment
facility.
Price (GBp) 249.5
Market Cap (GBP m) 370.6
Source: Bloomberg
Holder % Holding
Northernstar Investments Ltd 66.1 JPMorgan Cahse & Co 8.3 Henderson Group Plc 5.0 Hargreave Hale Ltd 1.7 Legal & General Investment Management Ltd
1.3
Source: Bloomberg
David Avgi CEO Ali Farid Khwaja CFO Yuval Ziv COO Tsach Einav CFO Israel Noam Grinberg Head of Risk Management Oded Kovach Head of R&D Source: Bloomberg
This provides a single location to monitor and control all of the components of the
SafeCharge system, including Cashier, processing and risk management. It enables
merchants to query and access information from the processing and risk platforms.
SafeCharge Card Services provides the complete value chain for prepaid card
issuance from program management technologies to full scope licensed issuing, risk
management and financial control. Brands are able to issue loyalty and gift cards via
this service.
Pay.com is the new digital wallet from SafeCharge, which is yet to be launched.
Merchants will be able to allow clients to load money onto their accounts and then
pay digitally.
Source: Bloomberg Source: Bloomberg
36%
43%
21%
Sport & Leisure
Digital Goods &ServicesFinancialServices
56%
26%
18%
UK
Cont. Europe &CISRest of theWorld
7 January 2016 - Saxo Payments and Safecharge collaborate to simplify cross
border settlement accounts
3 June 2015 – SafeCharge announced it entered into a strategic partnership with
German based FinTech Group AG to develop banking services in areas including
banking transaction services, mobile payments and debit cards.
1 May 2015 – SafeCharge announced it agreed to enter into a partnership with
South East Asia-focused payment services company 2C2P.
23 April 2015 – SafeCharge announced that it launched a PokerStars branded
prepaid MasterCard that allows poker players in the UK to withdraw from and
deposit direct into their bank account.
23 December 2014 – SafeCharge announced the acquisition of 3V Transaction
Services Limited for a consideration of €14.5 million.
10 December 2014 – SafeCharge announced the Group had been granted
approval for Issuing Activity from MasterCard Europe, which grants approval for
the Company to issue pre-paid MasterCard products.
16 September 2014 – SafeCharge announced that it had received authorisation as
an Electronic Money Institution (EMI).
26 August 2014 – SafeCharge announced it had been granted principal
membership status for merchant acquiring by VISA Europe.
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- 624.34 - Cash & Equivalents 11.82 146.51 + Preferred & Other 0.00 0.00 + Total Debt 0.00 0.00 Enterprise Value -- 477.83 Revenue, Comparable -- -- 102.50 124.00 Growth %, YoY -- -- 20.98 Gross Profit 24.90 44.49 Margin % -- -- EBITDA 0.87 22.77 30.77 38.30 Margin % -- -- 30.02 30.89 Net Inc, Comparable -- -- 25.67 31.17 Margin % -- -- 25.04 25.13 EPS, Comparable -- -- 0.17 0.21 Growth %, YoY -- -- 21.76 Cash from Operations 10.30 19.97 Capital Expenditures (0.58) (1.99) (2.60) (3.20) Free Cash Flow 9.72 17.98
Source: Bloomberg
Source: Bloomberg
Square, Inc. develops and provides point-of-sale software worldwide. Its main
product is Square Register, a point-of-sale system that generates digital receipts,
inventory, and sales reports, as well as provides analytics and feedback.
Square Inc serves big and small businesses from bakeries to retailers. Its product,
Square Register, is available in the App Store and on Google Play, and it is designed
to run on a smartphone or tablet, and on counter. Square, Inc. is headquartered in
San Francisco, California.
Square Register is a free point-of-sale (POS) application offered by Square, a rapidly
growing credit card processor founded by Twitter co-founder Jack Dorsey. Designed
as a cloud-based replacement for traditional cash registers. Square Register can be
downloaded to multiple devices including the iPad, iPhone and other Android
devices.
However, while Square Register is optimized using the iPad, this service can also
use the standard Square card reader to accept swiped payments.
Square offers the app for free with a flat rate of 2.75% per transaction, no monthly
fee. Features include:
In-app inventory
E-invoicing
Stock ordering system
Basic customer management
Advanced analytics
Customer feedback option
Loyalty/rewards program
Source: Bloomberg
Price (USD) 11.2
Market Cap (USD m) 3705.1
Holder % Holding Capital World Investors 12.4 SCGE Management LP 8.1 Source: Bloomberg
Jack Dorsey CEO/President/Co-Founder Sarah Friar CFO Dana Wagner Secretary Source: Bloomberg
The Square card reader is a free EMV accessory in which individuals and businesses
can take payments with debit and credit cards. Square’s card reader is compatible
with iPhone, iPad and Android devices by simply connecting it via an auxiliary
connection.
Source: www.squareup.com Source: www.squareup.com
Source: Bloomberg Source: Bloomberg
98%
2%
Transaction
Software andHardware
97%
3%
United States
International
Source: www.squareup.com
24th
November 2015 – Square announces closing of initial public offering and full
exercise of underwriters’ option to purchase additional shares.
23rd
November 2015 – Local sellers across the country are the first to accept
mobile payment with squares new reader.
27th
August 2015 – Square launches new Appointments application.
18th
August 2015 – Square cash launches on Apple Watch for instant easy
payments.
15th
July 2015 – Square launches new employee management application.
30th
June 2015 – Square introduces square payroll, a quick and easy way to pay
your employees.
8th
June 2015 – Square announces Apple Pay reader.
7th
April 2015 – Square introduces powerful marketing tools for the offline world.
11th
March – Square acquires Kill Technology.
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- -- - Cash & Equivalents 166.18 225.30 + Preferred & Other 366.20 514.95 + Total Debt 0.00 30.00 Enterprise Value -- -- Revenue, Comparable -- -- 1252.00 1678.67 Growth %, YoY -- -- 34.08 Gross Profit 128.79 226.07 Margin % -- -- EBITDA (94.24) (131.91) (48.05) 8.65 Margin % -- -- (3.84) 0.52 Net Inc, Comparable -- -- (184.33) (129.00) Margin % -- -- (14.72) (7.68) EPS, Comparable -- -- (0.64) (0.28) Growth %, YoY -- -- 56.25 Cash from Operations (60.58) (109.39) Capital Expenditures (47.93) (28.79) (41.30) (34.00) Free Cash Flow (108.51) (138.19) (115.13) (201.47)
Source: Bloomberg
Source: Bloomberg
Vantiv is the no.2 merchant acquirer and the largest PIN debit acquirer in the U.S.
based on number of transactions. The company's growth strategy includes
expanding further into high-growth channels and verticals, including integrated
payments, ecommerce, and merchant bank.
The Company enables merchants of all sizes to accept and process credit, debit and
prepaid payments and provide them supporting services, such as information
solutions, interchange management and fraud management, as well as vertical-
specific solutions in sectors such as grocery, pharmacy, retail, petroleum and
restaurants.
Vantiv offers global payments technology across the world; eligible in more than 200
countries and territories worldwide. As of March 2015, there were 2.4 billion Visa
cards in use with 103.2 billion transactions having taken place June 2014 – June
2015.
Vantiv delivers innovative online payment acceptance and processing for all major
card brands plus popular alternative payment options in card-not-present situations. It
also aims to help small businesses grow revenue, mitigate risk and secure
cardholder data.
Vanitv offers an omni-channel approach which provides customised solutions for
businesses of all sizes, whether e-commerce of bricks & mortar. It also offers data
analytics and security services including PCI Assist, Encryption and Tokenization.
This arm serves the gaming and entertainment markets including Casinos & Resorts,
Lotteries, Digital Gaming, Entertainment Venues and Digital Licensed Content. As
well as Payment Processing, Security & Fraud Prevention and Data & Analytics,
solutions include Cashless Gaming and Network Management.
Price (USD) 46.4
Market Cap (USD m) 8871.5
Source: Bloomberg
VANGUARD GROUP 7.0 T ROWE PRICE ASSOCIATES 6.8 WELLINGTON MANAGEMENT GROUP LLP
5.4
ALLIANCEBERNSTEIN LP 5.3 JENNISON ASSOCIATES LLC 5.1 Source: Bloomberg
Charles D Drucker President/CEO Mark L Heimbouch CFO/COO Source: Bloomberg
Vantiv offers a range of end-to-end solutions for credit, debit and prepaid card issuing
and payment processing can be tailored to keep the card top-of wallet and increase
transaction revenue. Vantiv MobiMoney puts cardholders in control of card
management via a mobile app.
Vantiv acts for over 2,800 agencies including cities, schools, transit authorities and
federal agencies. With the constant evolution of the payments processing landscape,
Vantiv recognises the importance of accountability and security and emphasises the
need to keep up-to-date with rules and regulations, EMV and PCI compliance,
convenience fees, interchange management and emerging payment technologies.
For Payment Facilitators who service many merchants, Vantiv PayFac provides both
fast, reliable and secure payments for the merchants and control over how and when
they paid for the facilitator. Vantiv PayFac assists in on-boarding sub-merchants
quickly and accepts Credit, Debit, Cheque, PIN/PIN-less Debit Gift Card, JCB and
PayPal as well as Visa, MasterCard, Discover and AMEX.
Source: Bloomberg Source: Bloomberg
2 December 2015 - Vantiv Announces Secondary Public Offering, Partial Warrant
Cancellation and Partial Net Exercise of Warrant
28 October 2015 – Vantiv Reports Third Quarter 2015 Results
22 October 2015 – Vantiv announces new e Commerce Fraud Toolkit services
levels
9 September 2015 – Rabobank N.A chooses Vantiv to grow its merchant services
division
8 September 2015 –Vantiv Launches OmniShield Assure(TM), a New Payments
Security Suite to Protect Small and Medium-Sized Businesses
8 July 2015 –Capital One Teams with Vantiv to Enhance Payment Processing
Solutions for Merchant Services Customers
21 May 2015 - Ingenico Group Adds Vantiv's EMV-certified Application to Smart
Terminals for Small- and Medium-sized Businesses
31 March 2015 – Vantiv becomes second largest merchant acquirer in the U.S
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 6214.9 6393.8 - Cash & Equivalents 171.4 411.6 + Preferred & Other 408.4 397.6 + Total Debt 1827.6 3416.7 Enterprise Value 8279.4 9796.5 Revenue 2108.1 2577.2 1666.5 1815.9 Growth %, YoY 13.1 22.3 (35.3) 9.0 Gross Profit 1172.6 1402.5 Margin % 55.6 54.4 EBITDA 553.3 594.0 801.3 886.8 Margin % 26.2 23.0 48.1 48.8 Net Income 156.4 150.3 446.3 506.7 Margin % 7.4 5.8 26.8 27.9 EPS 1.0 0.9 2.2 2.6 Growth %, YoY 19.7 (10.7) 154.1 16.9 Cash from Operations 480.6 592.9 Capital Expenditures (61.6) (103.2) (91.4) (107.0) Free Cash Flow 419.0 489.7 518.3 585.6
Source: Bloomberg
Source: Bloomberg
Headquartered in San Jose, California, Verifone is a leader in providing trusted,
secure and innovative payment terminals, global payment as a service, and
commerce enablement solutions that ease interactions between consumers and
merchants.
The company's products and services include mobile, countertop and self-service
payment devices, software, and web-based gateways. It has one of the leading
electronic payment solutions brands and is one of the largest providers of electronic
payment systems worldwide.
With 5,300 employees worldwide, and partnerships with local distributors, Verifone
operates in 150 countries and across vertical markets.
The Company's customers include financial institutions, payment processors,
petroleum companies, large retailers, government organizations and healthcare
companies, as well as independent sales organizations.
Verifone’s system solutions consist of point of sale electronic payment devices that
run proprietary operating systems, security and encryption software and certified
payment software as well as third party, value-added applications. its system
solutions are able to process a wide range of payment types including signature and
PIN-based debit cards, credit cards, contactless/radio frequency identification (RFID)
cards, smart cards, pre-paid gift and other stored-value cards, electronic bill payment,
cheque authorization and conversion, signature capture and electronic benefits
transfer (EBT).
Its proprietary architecture was the first to enable multiple value-added applications,
such as gift card and loyalty card programs, healthcare insurance eligibility and time
and attendance tracking, to sit on the same system without requiring recertification on
the addition of new applications and it is an industry leader in multi-application
payment systems.
Verifone’s system solutions are selected for their robust functionality, intuitive user
interface and modular design. Functionality includes transaction security, connectivity
and compliance with certification standards, as well as the flexibility to execute a
variety of payment and non-payment applications on a single system solution.
Price (USD) 26.1
Market Cap (USD m) 2837.4
Source: Bloomberg
Jackson Square Partners LLC 8.0 FMR LLC 7.3 Blackrock 6.5 Manning & Napier Advisors INC 6.5 Vanguard Group 6.4 Source: Bloomberg
Paul S Galant CEO Jennifer Miles President:Americas June Yee Felix President:Europe Bulent Ozayaz President:Southern Europe Marc E Rothman Exec VP/CFO Source: Bloomberg
Solutions and services include:
Mobile which provides mPOS capabilities that include accepting all leading mobile
wallets and NFC payment solutions as well as data analytics for retailing and
remote inventory management;
Payment Gateways which reduce PCI compliance scope and provide secured
payments and powerful business analytics tools. Easy-to-use, cloud-based
solutions streamline transactions and provide robust reporting to improve
operational efficiency and identify trends;
Payment and Data Security - security is tightly integrated into every part of the
business and Verifone prides itself on being at the forefront of creating policies
and guidelines that secure vital cardholder and transaction data against theft and
misuse;
Payment-as-a-Service - simplifies payment with one, convenient cloud-based
platform. With Verifone Point, payment logic moves from the POS to the payment
device which reduces PCI scope, simplifies EMV adoption and maintenance and
fosters rapid integration of mobile wallets and emerging payments.
Source: Bloomberg Source: Bloomberg
16 December 2015 - Verifone Announces Comprehensive and Flexible Mobile
Point-of-Sale Solution for Merchants of All Sizes
24 November 2015 - Verifone teams up with Danish Swipp app to bring mobile
payments in store
11 November 2015 - Verifone Adds Payment as Service Capabilities in Germany
with Acquisition of InterCard AG;
13 October 2015 – Verifone expands Taxi e-Hail, e Payments, and Media
Business with Curb;
3 September 2015 Verifone reports Third Quarter results;
1 September 2015 - Verifone and Aava Mobile Partner to Offer First Intel-
Powered, “Pocketable” mobile point of sale Solution;
10 June 2015 – Verifone supports launch of new store rewards offering within
Apple Pay;
3 June 2015 - Visa Inc. and Verifone Join Forces to Accelerate Omni Commerce
Globally;
30 April 2015 - Harbortouch Selects Verifone Terminal Solutions to Meet EMV
(technical standard for smartcards), Next-Generation Payment Needs;
30 March 2015 - Heartland and Verifone Renew Alliance; Announce EMV and
Encryption Initiative;
10 January 2015 - Verifone and Samsung Collaborate to Bring Android-Based
mPOS to Enterprise & Multi-Lane Retailers.
In Millions of USD FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 10/31/2014 10/31/2015 10/31/2016 10/31/2017 Market Capitalisation 4222.1 3464.5 - Cash & Equivalents 250.2 208.9 + Preferred & Other 36.9 34.9 + Total Debt 883.2 799.3 Enterprise Value 4891.9 4089.8 Revenue, Adj 1868.9 2001.5 2102.7 2231.9 Growth %, YoY 9.8 7.1 5.1 6.1 Gross Profit, Adj 724.7 831.0 907.6 972.1 Margin % 38.8 41.5 43.2 43.6 EBITDA, Adj 254.5 311.4 392.0 420.6 Margin % 13.6 15.6 18.6 18.8 Net Income, Adj (8.1) 105.3 249.9 289.4 Margin % (0.4) 5.3 11.9 13.0 EPS, Adj (0.1) 0.9 2.1 2.5 Growth %, YoY 96.3 -- 133.7 15.9 Cash from Operations 199.1 249.3 Capital Expenditures (85.0) (106.4) (110.9) (108.8) Free Cash Flow 114.1 142.9 187.7 237.6
Source: Bloomberg
Source: Bloomberg
Visa Inc. offers a full service via a four pronged facility which enables Visa to
represent the merchant, which accepts Visa payments, the acquirer which is the
financial institution that enables merchants to be paid, the issuer which is the
financial institution that provides Visa cards and payment products and finally the
cardholder who is the consumer using Visa cards and payment products.
It offers global payments technology across the world; eligible in more than 200
countries and territories worldwide. As of March 2015, there were 2.4 billion Visa
cards in use with 103.2 billion transactions having taken place June 2014 – June
2015.
Visa Inc. cites VisaNet as “the technology behind the Visa brand” - it is the name of
the global payments network that provides domestic processing for hundreds of
countries. It has multiple, synchronised data centres around the world and thousands
of secure endpoints on every continent.
VisaNet has:
an average transaction time of under 1 second
a total volume of US$6.3 trillion (payments volume of US$3.9 trillion)
2 million ATMs worldwide
Tens of millions Visa acceptance locations worldwide
14,800 Visa Financial Institutions worldwide
2.1 billion Visa cards worldwide
175 authorisation currencies; and
Processes 150 million transactions every day
Visa Checkout enables consumers to create an account with them by inputting their
details and card information. Once this is complete, they are able to shop online and
checkout out at the end of their shopping experience via their username and
Price (USD) 73.8
Market Cap (USD m) 162395.0
Source: Bloomberg
Holder % Holding Blackrock 6.0 Vanguard Group Inc. 5.4 FMR LLC 5.3 T Rowe Price Group Inc 4.7 State Street Corp 3.9 Source: Bloomberg
Charles W. Scharf Chief Executive Officer Ryan McInerney President Kelly Mahon Tullier Executive VP Jim McCarthy Global Head of Innovation Vasant Prabhu CFO Ellen Richey Vice Chairman Michael Ross Global Head of HR Bill Sheedy Global Exec Rajat Taneja Executive VP Source: investor.visa.com
password from Visa Checkout, providing the merchant website has signed up to use
the system.
Visa Checkout helps prevent fraud by offering a verification service in order to ensure
that cardholders are legitimate before they make a purchase. It is designed to reduce
fraudulent transactions through the use of device fingerprinting and step-up
authentication.
Currently Visa Checkout is supported by over 180 financial institutions and is
available for use at many online stores.
Visa supports the use of Visa Cards with Apple Pay.
Source: Bloomberg Source: Bloomberg
-4000 -2000 0 2000 4000 6000 8000
Service fees
Data processing fees
International transaction…
Other revenues
Client incentives6,847.0
5,629.0
226.0
U.S. OperatingRevenues
Rest Of WorldOperating Revenues
EU Fee OperatingRevenues
2 November 2015 - Visa Inc. to Acquire Visa Europe
6 October 2015 - Visa and Chevron Bring Mobile Payments to the Pump
15 September 2015 – Visa introduces EMV Chip-based Biometrics, with South
Africa's Absa Bank the first to trial the fingerprint validation at chip ATMs
24 August 2015 – Visa Checkout expands global availability with new merchants
and issuers in China and the UAE
17 September 2015 - Samsung joins the Visa Digital Enablement Program, which
offers a commercial framework that makes it easier for issuers and technology
companies to access the Visa Token Service (VTS).
28 July 2015 – Visa and Stripe, a mobile and online payment provider, partner to
support new technologies for merchants, developers and consumers worldwide.
3 June 2015 – Visa and FireEye join forces to co-develop tools and services to
help merchants and issuers protect against advanced cyber-attacks targeting
payment data.
3 June 2015 – Visa Inc. and Verifone, a leader in point of sale payments,
announced a partnership to enable merchants to offer their customers a more
streamlined, secure purchase experience across digital face-to-face commerce
environments (omni-channel)
2 March 2015 – Visa and Bharti Airtel, a leading telecommunications services
provider, extend mobile payments to seven African countries including Gabon,
Ghana, Kenya, Madagascar, Rwanda, Seychelles and Tanzania
1 March 2015 – Visa and Samsung bring mobile payments to the new Samsung
Galaxy S6 using secure Visa payments with Samsung Pay
27 February 2015 – Visa announced an agreement to acquire TrialPay, a privately
held company with an offers platform that connects merchants with millions of
consumers through targeted promotions
13 February 2015 – Visa announced that it is expanding the use of new security
technology that replaces the traditional 16-digit Visa account number
In Millions of USD FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 09/30/2014 09/30/2015 09/30/2016 09/30/2017 Market Capitalisation 131862.7 169552.4 - Cash & Equivalents 6965.0 9399.0 + Preferred & Other 0.0 0.0 + Total Debt 0.0 0.0 Enterprise Value 124897.7 160153.4 Revenue, Adj 12702.0 13880.0 15229.9 17107.7 Growth %, YoY 7.8 9.3 9.7 12.3 Gross Profit, Adj -- -- 15229.9 17107.7 Margin % -- -- 100.0 100.0 EBITDA, Adj 8585.0 9682.0 10578.5 12047.8 Margin % 67.6 69.8 69.5 70.4 Net Income, Adj 5721.0 6208.1 6914.5 7880.4 Margin % 45.0 44.7 45.4 46.1 EPS, Adj 1.9 2.3 2.9 3.3 Growth %, YoY 19.2 20.8 25.3 16.2 Cash from Operations 7205.0 6584.0 Capital Expenditures (553.0) (414.0) (516.9) (551.6) Free Cash Flow 6652.0 6170.0 6913.2 7947.8
Source: Bloomberg
Source: Bloomberg
Western Union aims to meet consumer needs through providing new, innovative
solutions. The company provides innovative solutions, high service levels, and omni-
channel integration for cross-border, cross-currency money transfer.
The company has a strong foundation in delivering such services to customers and
businesses around the globe. They have an extensive network, including more than
500,000 agent locations in more than 200 countries and territories as of December
31, 2014. This combines with a strong global brand, tailored solutions for businesses,
and compliance and regulatory capabilities that allow them to operate in a complex
environment.
WU enables customers to:
Send and receive money
Pay bills
Provide business solutions
Facilitate prepaid phone and gift cards and money orders
This is carried out via a network of more than 500,000 Western Union, Orlandi Valuta and Vigo Agent locations in more than 200 countries and territories and over 100,000 ATMs and kiosks.
In 2014, The Western Union Company completed 255m consumer-to-consumer
transactions worldwide, moving $85 billion of principal between consumers, and
484m business payments.
Price (USD) 17.1
Market Cap (USD m) 8615.0
Source: Bloomberg
Holder % Holding Capital Group Companies 13.2 Capital Resources 12.6 Fidelity 9.1 Vanguard 9.0 T Rowe Source: Bloomberg
Hikmet Ersek Chief Executive Officer
Elizabeth Chambers Chief Strategist Ragesh Agrawal CFO
Source: investor.visa.com
Source: Bloomberg Source: Bloomberg
19 November 2015 – Western union has submitted a non-binding proposal to buy
OzForex, the Australian Forex company.
17 November 2015 – Offers new global money transfer service in WeChat, the
social media platform owned by Tencent Holdings Limited.
30 September 2015 – Western Union takes Bill Payment Service to Walgreens.
4 August 2015 – Western Union renews agreement with Cash Money in Canada.
20 July 2015 – Western Union and Kroger extend more than 30 year relationship.
6 June 2015 – Western Union enhances Mobile Money transfer capabilities in
Africa.
19 May 2015 – Sainsbury’s Bank announces new relationship with Western Union.
3 May 2015 – Western Union and Belgian post group expand relationship.
29 April 2015 – Western Union and US bank extend relationship.
11 February 2015 – Western Union and Meijer Ink Deal to continue long standing
relationship.
In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 9466.8 9340.1 - Cash & Equivalents 2073.1 1783.2 + Preferred & Other 0.0 0.0 + Total Debt 4213.0 3720.4 Enterprise Value 11606.7 11277.3 Revenue 5542.0 5607.2 5501.5 5625.0 Growth %, YoY (2.2) 1.2 (1.9) 2.2 Gross Profit 2307.0 2309.8 2288.9 2318.6 Margin % 41.6 41.2 41.6 41.2 EBITDA 1389.5 1412.4 1398.9 1420.4 Margin % 25.1 25.2 25.4 25.3 Net Income 810.9 852.4 855.6 859.8 Margin % 14.6 15.2 15.6 15.3 EPS 1.5 1.6 1.7 1.7 Growth %, YoY (17.9) 9.5 4.5 3.6 Cash from Operations 1088.6 1045.9 Capital Expenditures (80.2) (105.9) (200.0) (202.3) Free Cash Flow 1008.4 940.0 925.7 959.9
Source: Bloomberg
Source: Bloomberg
Wirecard is one of the world’s leading companies for payment processing and risk
management. Its aim is to provide an all-in-one payment service that can take the
user through their entire checkout experience, starting with the payment system,
through to risk management and banking. Its aim is to pave the way towards a one-
stop cashless payment process.
Wirecard Checkout Page – The Wirecard checkout page supports all popular
payment methods and can be quickly and easily integrated into an online store. It
offers an intuitive user interface, and customers can choose whether they want to
pay via their mobile in store or online. All payments are verified online, in real time,
and the customer receives a confirmation, which enables immediate processing of
the order. The checkout is currently available in 26 languages.
Credit Card Processing – Wirecard is a payment service provider and bank, and
consequently it is able to offer a full end-to-end service that can be used in
conjunction with all major credit and debit cards, and all common transaction
currencies.
SEPA Direct Debit – In an effort to reduce costs and minimise administration
expenses, Wirecard offers automated processing of SEPA (single euro payment
area) direct debits in all 33 countries of SEPA.
Online Banking Payments – Wirecard is able to offer customers who do not have
a credit or debit card a way to make purchases online securely. These service
providers include:
CIMB clicks – Extensively used throughout Asia
Debito Bradesco –operated by Banco Bradesco, one of Brazil’s biggest banks
Giropay – This service has 1,500 participating banks in Germany and almost 17
million users
iDEAL – Used for the processing of over 60% of all Dutch e-commerce
Trustly – Open to all customers holding bank accounts in any of the supporting
countries (Estonia, Finland, Poland and Sweden)
Price (EUR) 45.8
Market Cap (EUR m) 5547.6
Source: Bloomberg
Holder % Holding Jupiter Investment Management 8.1 MB Beteilgungsgesellschaft 6.1 Alken Asset Management Ltd 4.9 Ameriprise Fin Grp 3.8 T Rowe Price Group Inc 3.2 Source: Bloomberg
Markus Braun Chairman Burkhard Ley CFO Jan Marsalek COO Iris Stoeckl Investor Relations
Source: Bloomberg
Maybank2u.com – Offered by Maybank, Malaysia, allowing customers to pay
online directly from their bank accounts
POLi – Supported by 14 Australian and 8 New Zealand banks, and is currently the
preferred method for over 50% of online purchases
Przelewy24 (P24) – More than 80% of online purchasers use P24 in Poland and
over 8,000 retailers are using it for processing payments
Alternative Payments – Wirecard is able to offer 20 different national and
international payment methods for e-commerce such as e-wallets, prepaid
vouchers and purchase on account. Examples include:
Skrill Digital Wallet
PayPal (e-wallet)
Paysafecard (prepaid voucher)
RatePay (payment by instalment, payment by direct debit and buying on account)
Wirecard Checkout Portal – This portal offers small and medium-sized
companies and start-ups the ability to choose a method of payment that they
would like to provide on their website, and simply set it up through online
registration and a plugin tool. The process is easy and quick to apply and, pricing
is a one-off fee.
Wirecard’s system of risk management begins with the implementation of its fraud
prevention system. This is designed to recognise irregular transactions before
completion, and also to limit and avoid the possibility of unnecessarily flagging a
transaction as fraudulent. Part of the risk management system also supplies
analytics, simulation, rule processing and case management.
Wirecard Bank is a wholly owned subsidiary of the Wirecard Group, which offers
combined payment processing and banking services. It is a Principal Member of
Visa, MasterCard and JCB and operates as an acquirer in over 69 countries, offering
merchants in retail and mail order more than 100 transaction and 15 payment
currencies.
Source: Bloomberg Source: Bloomberg
68%
31%
1%
Electronic Payment& Risk Management
Acquiring & Issuing
Call Center &CommunicationServices
49%
28%
19%
4%
Revenue by Origin
Germany
Europe
Rest of the World
11 December 2015 - Wirecard and Alipay sign agreement for innovative POS
payment acceptance
27 October 2015 - Wirecard acquires payments business of Great Indian (GI)
Retail Group
23 September 2015 – Wirecard Payment Services now available for all Sky
subscriptions.
27 July 2015– partners with Sparhandy.de, a German online reseller of
smartphones
7 July 2015 – MyOrder an mCommerce platform selects Wirecard for host card
emulation technology solutions.
29 June 2015 - launches mobile checkout development platform for retailers
8 June 2015 – Wirecard launches B2B payment solution for the Chinese market.
21 April 2015 – CIMB Bank Singapore teams up with Wirecard to embark on
merchant acquisition business
18 March 2015 – opentab launches payment via Wirecard Checkout Portal
16 March 2015 – signs mobile payment cooperation agreement with Drillisch
10 February 2015 – announces Wearable Payments Developer Kit
27 January 2015 – expands European collaboration with Triumph
13 January 2015 – teams up with Bank Mega to support Carrefour Indonesia
11 December 2014 – acquires GFG Group Limited, New Zealand
In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 3224.5 4501.8 - Cash & Equivalents 547.2 818.0 + Preferred & Other 0.0 0.0 + Total Debt 233.1 98.4 Enterprise Value 2910.3 3782.2 Revenue, Comparable 481.7 601.0 758.0 934.5 Growth %, YoY 22.1 24.8 26.1 23.3 Gross Profit -- -- 345.0 421.9 Margin % -- -- 45.5 45.2 EBITDA 125.4 174.3 227.1 282.0 Margin % 26.0 29.0 30.0 30.2 Net Inc, Comparable 82.7 107.9 152.6 193.7 Margin % 17.2 18.0 20.1 20.7 EPS, Comparable 0.7 0.9 1.3 1.6 Growth %, YoY 10.8 20.4 41.3 26.7 Cash from Operations 124.2 126.5 Capital Expenditures (51.3) (75.0) (57.0) (73.7) Free Cash Flow 72.9 51.5 136.6 162.0
Source: Bloomberg
Source: Bloomberg
Worldline is an End to End digital service provider, designing and providing solutions
and processing services around payment. The company was spun out of Atos, the
French computer-services provider in June 2014, which still owns a 73% stake. It
aims to cover the whole payment value chain through the creation of digital platforms
that handle all the transactions between a company, its partners and its customers.
Worldline seeks to do this through a three pillared approach.
Worldline seek to facilitate consumer engagement with cutting-edge and seamless
services for merchants on their devices, whether it is before or after the point of sale.
It designs services and solutions and implements them for clients.
Commercial Acquiring – Worldline offers a wide range of payment solutions for
Point of Sale, online and mobile payments, whether they are cash or non-cash. Its
aim is to help create new customer experience around payments, such as
customer surveys, terminal advertising and loyalty.
Multichannel Payment Acceptance – Worldline covers the multichannel and
centralised payment acceptance for both remote and face-to-face payments for
merchants & banks. Merchants are able to accept all payment types including
bank cards, bank transfers, digital wallet payments or private cards. This is
intended to improve their clients conversion rate.
Electronic & Mobile Commerce – Worldline offer an intelligent search engine,
Smart Finder, which makes finding, comparing and buying products smooth and
easy. The e-Merchandising function makes it possible to increase the customer
basket amount and order frequency based on the consumer’s profile.
Worldline aims to create digital products for business innovation and operational
efficiency.
Connected Living – this enables vehicles and household items to provide internet
access, enabling services such as in-car payment and a mass market automotive
e-store.
E-Ticketing – Electronic ticketing is a service provided by Worldline, assisting the
transport operators to optimize the management, control, planning and operation
Price (EUR) 22.1
Market Cap (EUR m) 2920.9
Source: Bloomberg
Holder % Holding
Atos 73.3 Blackrock 5.0 Financiere De L’Echiquier 2.5 Fidelity Management 0.9 Norges Bank Investment Management
0.8
Source: Bloomberg
Thierry Breton Chairman Gilles Grapinet CEO Bruno Vaffier CFO Source: Bloomberg
of their passenger services. This can all be done on mobile devices, providing a
platform for smart ticketing and fare collection.
E-Government Collection Platforms – Worldline provides digitization services,
which ensure that paperless, secured systems are put in place within public
services. The services can also be used for tolling, based on satellite
technologies. Their eHealth realm allows digital healthcare information to be
available to public sector entities and process health insurance card systems.
Worldline aims to help clients anticipate major changes in the industry, through
transformative technologies like mobile, big data or electronic wallet, enabling
processes to be optimised.
Acquiring Processing and Value Added Services – Worldline offers a complete
acquiring processing solution ranging from merchant contract set-up to merchant
post–settlement activities. It is optimised for domestic and international card
schemes on any transactional device: Point Of Sale, ATM, and for epayments.
Issuing Processing and Value Added services – Worldline also offers powerful
and secure technical and financial issuing processing services. Value-added
services include customised cardholder services, enhanced security through
Access Control Server and Efficient Fraud and Risk Management.
Online Banking - Worldline offers online banking through a set of non-card
Payment services and eBanking services for customer-centric transactions. This
product is focused in the retail banking market across all channels.
Worldline considers itself a European leader, and global player in the payments and
transaction services industry. It has over 40 years of experience and employs more
than 7,200 people worldwide in 17 countries.
Source: Bloomberg Source: Bloomberg
360 370 380 390 400
Merchant Services &Terminals
Financial Processing &Software Licensing
Mobility & e-TransactionalServices
36%
29%
13%
11%
6% 5% France
Belgium andNetherlands
United Kingdom
Germany and Centraland Eastern Europe
Iberia and LatinAmerica
Asia and India
8 December 2015 - Worldline teams up with MICHELIN® Solutions to launch
EFFITRAILERTM, a new connected solution for managing truck trailers
22 October 2015 - Worldline and Auriga partner to deliver an integrated Multivendor ATM Software solution
10th September 2015 - Carrefour Belgium, Visa and Worldline enable contactless payments in Belgian retail
26th
August 2015 - Luxembourg’s banks choose Worldline’s Access Control Server (ACS) solution to secure e-commerce with 3D-Secure
29th
May 2015 – Fuelgenie (Worldline subsidiary) works its magic with Sainsbury's partnership
21st May 2015 - Worldline launches first HCE (near field communications Mobile
Payment) solution in Germany.
20th
May 2015 - Worldline secures First Great Western contract to digitise the railway
13th
May 2015 - Worldline and ING Belgium together for MyBank eMandate solution
30th
April 2015 - Worldline selects Transatel to enhance its connected objects solutions and mobile payment terminals
11th
March 2015 - Worldline supports D8 with the first ever Twitter-based TV voting system
19th
February 2015 - Major Dutch Banks choose Worldline to manage SEPA eMandate services and iDEAL transactions
4th
November 2014 - Worldline partners with Powa Technologies to offer tablet-based POS terminals across Europe, Middle East and Africa
8th
October 2014 - Worldline and Alpha Card sign new American Express merchant agreement
In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- 2110.8 - Cash & Equivalents 542.0 215.6 + Preferred & Other 0.0 0.0 + Total Debt 641.6 12.5 Enterprise Value -- 1907.7 Revenue, Comparable -- 1149.3 1223.6 1313.5 Growth %, YoY -- -- 6.5 7.4 Gross Profit -- -- 277.7 303.4 Margin % -- -- 22.7 23.1 EBITDA 207.1 194.2 233.3 257.4 Margin % -- 16.9 19.1 19.6 Net Inc, Comparable -- 113.8 122.1 133.3 Margin % -- 9.9 10.0 10.1 EPS, Comparable -- 0.9 0.9 1.0 Growth %, YoY -- -- 8.2 8.9 Cash from Operations 161.8 184.4 Capital Expenditures (61.7) (68.9) (71.5) (75.7) Free Cash Flow 100.1 115.5 125.1 133.2
Source: Bloomberg
Source: Bloomberg
.
Worldpay is headquartered in London, UK. It has 25 offices in 11 countries and around
4,500 employees.
The Group has three operating divisions: Global eCom, Worldpay US and Worldpay UK.
Global eCom serves large and fast growing internet-led multinationals with complex
payment needs in emerging markets such as Brazil, India and China as well as in
developed markets. It is focused on five key industry verticals which have complex
and different payment needs: Digital Content, global Retail, Airlines, Regulated
Gambling and Travel.
Worldpay UK (WPUK) provides local in-store, online and mobile payment acceptance
solutions for UK-based merchants, from large corporates to small and medium-sized
enterprises (SMEs/SMBs) and micro merchants, accounting for approximately 42% of
UK card payments by volume of PoS transactions in 2014;
Worldpay US (WPUS) provides local in-store, online and mobile payment acceptance
solutions for US-based merchants, with a focus on integrated payments for SME
customers and vertical-specific solutions for those in the Grocery, Petroleum,
Restaurant and Retail industries. In addition, Worldpay US operates ATM processing
services, including transaction processing for cash dispensing, account deposit
services and certain advanced services, such as bill payment and mobile top up, to
third-party organisations that own or deploy ATMs.
Digital payments whether in-store , online or mobile. In-store includes traditional PoS
terminals and virtual terminals that allow processing of payments over the phone
using web-based technology. Online, mobile and multi-channel payments include a
variety of online payment gateways and can be standalone or integrated systems that
can act as a hosted omni-channel payments service operating over terminals,
websites and apps in a bundled service.
Alternative payments ~ Worldpay offers over 326 alternative payment methods
outside the global card schemes in 126 different transaction currencies. It can tailor
where payment methods range from mobile payments, signed and unsigned direct
debits, e-wallets, offline/online/real-time bank transfers, cash on delivery, cheques, bill
payments and e-banking.
Price (GBp) 306.8
Market Cap (GBP m) 6140.4
Source: Bloomberg
Holder % Holding Ship Investors 42.0 Blackrock 4.3
Source: Bloomberg
Phillip Jansenf Chief Executive Officer Ron Kalifa Vice Chairman Richard Medlockr CFO Source: investor.visa.com
Value-adding services including fraud and risk management, treasury management
and FX services and business insights such as payment analytics, acceptance
optimisation and business management software. Being able to drive up transaction
acceptance rates is one of the main ways in which Worldpay can help customers
increase their sales.
In 2014, Worldpay processed 11.5 billion transactions with a value of around £370
billion.
Worldpay operates in 146 countries, in 126 currencies through 326 payment types
and has 400,000 customers.
Online transactions, including Cardholder Not Present, accounted for 41% of the total.
Source: Bloomberg Source: Bloomberg
15 September 2015 – Worldpay and Zuora team up on Subscription based payments;
27 August 2015 – Worldpay enters Chinese software export market with Wondershare;
22 July 2015 – Missguided turns to Worldpay for global expansion;
15 July 2015 – Worldpay appoints Sir Michael Rake as Chairman;
08 June 2015 – Apple Pay coming to Worldpay’s customers In the UK from launch;
26 May 2015 – Contactless is king as Worldpay transactions soar past £2billion;
20 May 2015 – Worldpay extends global payment acceptance capabilities to India;
11 March 2015 – HK Express to reach new heights with Worldpay
In Millions of GBP FY 2013 FY 2014 Current/LTM 12 Months Ending 12/31/2013 12/31/2014 06/30/2015 Market Capitalisation -- -- 5545.0 - Cash & Equivalents 181.6 168.7 99.5 + Preferred & Other 0.0 0.0 0.0 + Total Debt 2236.7 2422.8 2375.8 Enterprise Value -- -- 7821.3 Turnover 799.2 863.4 918.5 Growth %, YoY 11.4 8.0 13.4 Gross Profit 704.1 765.3 806.7 Margin % 88.1 88.6 87.8 EBITDA 349.3 392.9 409.1 Margin % 43.7 45.5 44.5 Net Income Before XO (164.8) (50.0) (11.9) Margin % (20.6) (5.8) (1.3) Adjusted EPS -- -- Growth %, YoY -- -- Cash from Operations 69.7 142.6 179.9 Capital Expenditures (57.0) (26.4) (29.7) Free Cash Flow 12.7 116.2 150.2
Source: Bloomberg
Source: Bloomberg
Company Code Disclosure All companies listed below: Proxama:
3,6 7
Source: Daniel Stewart 1. Within the past twelve months Daniel Stewart & Co plc and/or its affiliates has managed or co-managed an offering for this Company, for which it received fees or the promise of
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Companies to which disclosures apply: ATOS, Cielo, Earthport, First Data, Fiserv, Gemalto, Global Payments, Ingenico, MasterCard, Paysafe, PayPal, Proxama, Safecharge,
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