Jimmy Frischling’s Post

In the payments industry, companies like Mastercard are using M&A to enhance their technology capabilities and expand their service offerings. Recent acquisitions, including Mastercard's purchase of Recorded Future and Minna Technologies, highlight a trend where firms aim to create comprehensive tech stacks to compete effectively in a digital marketplace. With 62 deals announced by mid-October 2024, the M&A landscape is expected to grow, particularly in response to the Fed's interest rate cuts, which may further stimulate deal-making as companies seek to innovate and diversify their revenue models. Find out more in this article: https://heyor.ca/DBsYiy #PaymentsDive #MergersAndAcquisitionsMarket #Mastercard #MANews

In the payments industry, companies like Mastercard are using M&A to enhance their technology capabilities and expand their service offerings. Recent acquisitions, including Mastercard's purchase of Recorded Future and Minna Technologies, highlight a trend where firms aim to create comprehensive tech stacks to compete effectively in a digital marketplace. With 62 deals announced by mid-October 2024, the M&A landscape is expected to grow, particularly in response to the Fed's interest rate cuts, which may further stimulate deal-making as companies seek to innovate and diversify their revenue models. Find out more in this article: https://heyor.ca/DBsYiy #PaymentsDive #MergersAndAcquisitionsMarket #Mastercard #MANews

News analysis: Capital One’s recently announced $35.3 billion acquisition of Discover Financial isn’t just about getting bigger — gaining “scale” in Wall Street-speak — it’s a bid to protect itself against a rising tide of fintech and regulatory threats. It’s a chess move by one of the savviest long-term thinkers in American finance, Capital One CEO Richard Fairbank. As a co-founder of a top 10 U.S. bank by assets, his tenure is a rarity in a banking world dominated by institutions like JPMorgan Chase that trace their origins to shortly after the signing of the Declaration of Independence. Fairbank, who became a billionaire by building Capital One into a credit card giant since its 1994 IPO, is betting that buying rival card company Discover will better position the company for global payments’ murky future. The industry is a dynamic web where players of all stripes — from traditional banks to fintech players and tech giants — are all seeking to stake out a corner in a market worth trillions of dollars by eating into incumbents’ share amid the rapid growth of e-commerce and digital payments. The deal, if approved, enables Capital One to leapfrog JPMorgan as the biggest credit card company by loans, and solidifies its position as the third largest by purchase volume. It also adds heft to Capital One’s banking operations with $109 billion in total deposits from Discover’s digital bank and helps the combined entity shave $1.5 billion in expenses by 2027. But it’s Discover’s payments network — the “rails” that shuffle digital dollars between consumers and merchants, collecting tolls along the way — that Fairbank repeatedly praised Tuesday when analysts queried him on the strategic merits of the deal. #mergersandacquisitions #creditcards #networks https://lnkd.in/e2EGtCWz

@Tokenex and @ixopay recent merger announcement makes a lot of sense. Will it be a 1+1=3 kind of deal? Not sure but the logic for putting a deal like this together is sound. Payment optimization enables businesses to streamline their payment processes, reduce costs, and enhance the customer experience by dynamically routing transactions to the most cost-effective and reliable payment methods and processors. Tokenization, on the other hand, enhances security by replacing sensitive payment card data with unique tokens that are meaningless to cybercriminals if intercepted. This significantly reduces the risk of data breaches and fraud, safeguarding both businesses and their customers' sensitive information. This strategic merger of @Tokenex and @ixopay addresses the growing demand among merchants for solutions that streamline payment operations, reduce costs, and enhance security. With the ability to dynamically route transactions to the most cost-effective and reliable payment processors, merchants can optimize their payment acceptance strategies while ensuring compliance with regulatory requirements and industry standards. #PaymentOptimization #Tokenization #Strategy #Merger #Finance

Good news for the recovery for Enterprise FinTech M&A. Private Equity are paying up for growth, margin, and stability for high quality FinTech assets. Q1’s increase in deal count was driven by Fintech/Payments’ who dominate with strong operating performance. Q1 emphasized that industry specific payments tools, combined with workflow software, can generate the kind of revenue growth and margin that create attractive buyout returns. Many of these combined payments and software businesses have a moat that is hard to penetrate as well as an existing customer base that is sticky. According to PitchBook The PE buyout comeback continued from Q423 into Q1,which saw 32 PE and corporate B2B FinTech acquisitions and will likely reach 42 to 46 deals. Q1 deal count is higher than Q4’s 27 logged deals (31 to 33 estimated) and Q1 2023’s 30 deals. Q1 deals exit deals included MuniciPAY (enterprise payments), Jobox (payments platform & POS), Arryved (mobile POS), Zafin (banking platform), Ireland Pay (enterprise payments), Payment Cloud (enterprise payments) and Feather Pay (enterprise payments). #payments #PE #M&A #FinTech #RetailTech #VC #PayTech #acquisitions #software #enterprisetech

Mergers remain slow but there are still those out looking for a deal. Consider Celero Commerce, backed by LLR Partners, which is up for sale and the JPMorgan-backed Finexio, which is looking for investors. #deals #privateequity #fintech #payments

Robert Kraal's excellent insights highlight the struggles of large, legacy acquirers as they try to outpace innovation through M&A, oftentimes putting themselves further behind as they have difficulty merging disparate systems and technologies into a cohesive acquiring platform. When will the broader investor community realize that constant M&A activity, done primarily as a mechanism of financial engineering for quarterly reports, may be blocking innovation and revenue growth in the payments world? https://lnkd.in/gqXCNP8F #payments #merchantacquiring #worldline #crossborderecommerce #visa #mastercard #paymentserviceproviders #acquirers #paymentprocessing

Worldline: A Cautionary Tale of Growth and the Risk of Falling Behind For years, Worldline has been a cornerstone in the European payments landscape, expanding through key acquisitions like SIX Payment Services and Ingenico On paper, these moves should have cemented their leadership. But what we’ve seen is a different story: a company trying to integrate a patchwork of platforms, struggling to build a cohesive infrastructure that can keep up with the pace of change in today’s market. Despite their size and presence, Worldline's growth has stalled. Revenue projections for 2024 show just 1.3% organic growth—down significantly from the 6% they posted in 2023. Their EBITDA margins have also flattened around 24%, and while cost-cutting efforts like the Power24 program may keep them afloat, they are not enough to ignite meaningful, long-term growth. I can't help but wonder if this stagnation highlights a larger issue. Worldline’s reliance on legacy systems, which it inherited through a series of mergers, left it bogged down by complexity, preventing the agility needed to compete in a rapidly evolving payments space? I believe that this is where the opportunity lies for new acquirers and PSPs who are thinking about becoming acquirers themselves. As Worldline tries to simplify and catch up, the door is wide open for those who are unburdened by legacy infrastructure. The payments landscape is evolving quickly—merchants are no longer just looking for reliable systems; they demand speed, flexibility, and innovation. And that’s where modern, cloud-native solutions shine. Acquirers and PSPs that can offer seamless, real-time payment processing, flexible integrations, and cross-border capabilities are positioned to fill the gaps left by companies like Worldline. The lesson here is that size and legacy are no longer enough to maintain leadership. Agility and innovation are the new currency in payments. To me, Worldline’s story is a reminder that growth through acquisition isn’t always a straight path to success. The companies that thrive in the next wave of payments will be those who can build for the future, not just manage the past. If you want to learn more about how we help new acquirers be agile and innovative, sign up to our newsletter https://lnkd.in/e5bF_5mX

This article points out very well the challenges of the big tanker ships in the payment space today and the next years. While we again see a numerous number of current M&A deals the innovative and flexible speedboats in the market are attempting to overtake the tankers...

Interesting perspective and analysis, especially regarding the complexity of integrating multiple platforms. This can 'make or break' the value of the acquisitions, highlighting the importance of a clear, strategic technical integration plan. Failing to do so can lead to long-term technical debt, which Worldline is experiencing now. Relying on legacy infrastructure limits innovation and creates significant barriers to scaling and maintaining the agility needed to stay competitive in today's fast-moving payments landscape.