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Table of Contents

Lead Story

Merchants profit from automated retail sytems

Ann Train

News

Michael Grossman
July 5, 1955 to Oct. 22, 2015

Big week for payment IPOs

NFC specs aim for widespread adoption

Losses mount from fraud, cyber-attacks

Features

Mobile deposit continues to grow, despite naysayers

Patti Murphy
ProScribes Inc.

When biometrics and engineering collide

Opportunities, challenges for mobile payments

ISOMetrics:
Merchant guide to online payment journey

Views

Assessing the U.S. EMV rollout – Part 2

Growth ahead for payments, but beware the disruptors

Patti Murphy
ProScribes Inc.

The counterintuitive, paradoxical nature of large merchant accounts

Adam Hark
MerchantPortfolios.com

Education

Street SmartsSM:
When networking, think ROT

Jeffrey I. Shavitz
TrafficJamming LLC

Industry tradeshows and the law

Adam Atlas
Attorney at Law

Conduct your own personal audit

Jeff Fortney
Clearent LLC

The one man show: Approaches in B2B sales - part two

John Tucker
1st Capital Loans LLC

Company Profile

Lion Capital Group LLC

Payoneer Inc.

New Products

Integrated, secure, virtual POS platform

Virtual Terminal
Clearent LLC

High-speed, fast-casual POS tablet solution

AirREGI for QSRs
Recruit Holdings Co. Ltd.

Inspiration

Organization, the key to productivity

Departments

Letter from the editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

November 09, 2015  •  Issue 15:11:01

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Big week for payment IPOs

The week of Oct. 12 to 16, 2015, was a historic one for payments industry IPOs, with Worldpay Group plc going public Oct. 13 on the London Stock Exchange and two days later First Data Corp. on the New York Stock Exchange. Before the week was over, two more companies had filed registration statements with the U.S. Securities and Exchange Commission for proposed IPOs, Square Inc. on Oct. 14 and TransFirst LLC on Oct. 16.

Worldpay made history by becoming the U.K.'s largest fintech IPO to date, launching a £4.8 billion IPO, which raised total gross proceeds of £2.16 billion. In the months preceding the IPO, Worldpay declined acquisition bids from Ingenico Group, Wirecard AG, JPMorgan Chase & Co, and several private-equity firms; bidding topped $9 billion at one point. First Data debuted on the NYSE as the largest listing of 2015, raising $2.6 billion in its initial offering.

Capital investment in the financial technology sector has been consistent as competition heats up nationally and globally. "Current public payment stocks such as Visa, Vantiv and MA [MasterCard] have been strong performers," said Jared Drieling, Business Intelligence Manager for The Strawhecker Group. "This clearly indicates that some of the major investment firms and equity groups feel that this is an ideal time to offload or minimize their investments in these payment companies since the payments market is hot."

Unique challenges

The latest round of IPOs comes with a price tag, however, as the ability to explore and invest in emerging growth opportunities that will bring new revenue-generating possibilities to the forefront is far from cheap. First Data, with a reported debt load of $21 billion, needs the financial springboard to move forward, and others face different challenges.

"First Data obviously has a huge debt load, so trying to balance out the debt load with potentially acquiring another company or acquiring talent, that's going to be a tough ball to juggle, and I think we've seen that in the IPO," Drieling said, adding that the company must also continue to upgrade legacy platforms in tandem with front-end products in the queue.

He believes Worldpay is in an excellent position to take advantage of opportunities that present themselves. For example, he pointed out that Worldpay now has the funds to invest in smaller companies and push its footprint into new geographies around the globe.

Worldpay Chief Executive Officer Philip Jansen, in acknowledging the significance of the IPO, confirmed that his company is on solid financial footing. "We have already invested over £1 billion in our technology, people and capabilities, helping us to become a modern and sophisticated technology-led organization with great potential," he said.

Different rationales

The reasoning behind Square's IPO could tell a different story. "For Square, the honeymoon may be over," Drieling said. "Initially, there was a lot of investment in Square, and for them it was hard to become profitable, so an IPO may help fund some of the strategic initiatives that they're targeting."

TransFirst Holdings Corp., which was the last to file for an IPO in mid-October and is primarily focused on merchant acquiring and payment technology for small to midsize businesses, has taken an approach that is similar to Worldpay's in that it built a strong book of business through strategic alliances before its planned IPO.

In the final analysis, as each of these companies goes public, the public scrutiny and pressure to remain profitable could force positive changes, which could transform the fintech market for years to come.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Impact Paysystems | Electronic Merchant Systems