trending Market Intelligence /marketintelligence/en/news-insights/trending/jkaynh-3a2in3c6fvivm7q2 content esgSubNav
In This List

The week in fintech: M&A marching on as payments IPOs ramp up in '18

Podcast

Next in Tech | Episode 50: InfoSec spending up, again…

Blog

Broadcast deal market recap 2021

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Price wars in India: Disney+ Hotstar vs. Amazon Prime Video vs. Netflix


The week in fintech: M&A marching on as payments IPOs ramp up in '18

This recap features updates on bank technology, payments, online lending and other news in the U.S. financial technology space. Send tips, ideas and chatter to rachel.stone@spglobal.com. For other recent fintech news, click here.

A Dutch financial technology company recently announced that it will launch an initial public offering, marking the latest of several large fintech companies to reveal plans to enter the public markets.

Netherlands-based Adyen BV said May 24 that it will list about 15% of its shares on Euronext Amsterdam. The decision, which had been rumored since April, came the same week that fellow fintech companies EVO Payments Inc. and GreenSky Inc. launched their IPOs. iZettle AB had planned to list on the Nasdaq Stockholm stock exchange before PayPal Holdings Inc. announced its pending $2.2 billion purchase of the mobile payments provider.

"The industry is strong [with] a lot of good tailwinds. From a fundamental perspective, it's a good business to be in," Credit Suisse analyst Paul Condra said in an interview. "You haven't really seen that much activity in the payments space in a while."

The recent spate of IPOs has not limited M&A activity in the industry, nor has it changed valuations in a meaningful way, the analyst said.

Adyen will be a strong player in the online space, competing mostly against Worldpay Inc., First Data Corp. and JPMorgan Chase & Co.'s online payments business in the U.S. market, as well as European providers Worldline SA and Wirecard AG, Condra said. Adyen's reach is "very global" and works with many multi-national companies, he added.

Listing in Amsterdam as opposed to in the U.S. is likely management's preference to list in their local market, the analyst said. Adyen's investor base is likely more focused in Europe, he said.

Investors seem "very positive" on the payment solutions provider, Condra said, but its proposed valuation could be an area of pushback. Sources close to the deal told Reuters in April that Adyen could raise about €1 billion in the IPO, which would value its whole business at €6 billion to €9 billion.

"There's a certain kind of investor that will be turned off by that, but others will not," he said. "That will be the pushback, but it should probably still I think be pretty well received as an IPO."

Elsewhere in the payments sector, PayPal continued its expansion spree, picking up a minority stake in Indian digital payments platform Pine Labs Pvt. Ltd. PayPal and Singaporean state-owned investment firm Temasek Holdings (Pte.) Ltd. now hold a combined US$125 million stake in the company.

The payment company also bought artificial intelligence platform Jetlore Inc., a move Credit Suisse's Condra believes improves PayPal's ability to extend its merchant offering to the entire customer experience rather than just at checkout. In a June 1 note, the analyst said this could improve PayPal's value proposition to merchants.

Also this week, Square Inc. closed its acquisition of Weebly Inc. and updated its guidance for the second quarter.

Visa Inc. saw its service crash in the U.K. and elsewhere in Europe on June 1. The card payment company said in a statement it is investigating the cause, and Bank of Ireland Group PLC told customers it was aware of the problems with Visa. The bank said the issue was affecting "multiple banks" across Europe. Mastercard Inc. is investigating whether it also suffered a fault in its systems.

And as competition in India continues to accelerate, Facebook Inc. may roll out its WhatsApp Inc. payment services in India as early as June 4. There are reportedly about 200 million users of WhatsApp in the country.

In banking, Ant Financial Services Group and Shanghai Pudong Development Bank Co. Ltd. entered into a strategic cooperation agreement to support Shanghai Pudong's digital transformation. The agreement will use the Alibaba Group Holding Ltd. affiliate's technologies in artificial intelligence, supply chain finance, biometric identification and risk management to help the bank prevent loan, transaction and marketing fraud.

In blockchain technology this week, Ripple said it added two international money transfer companies, Singapore-based InstaReM PTE Ltd. and São Paulo-based BeeTech, to its distributed ledger-based payments network RippleNet, CoinDesk reported.

From May 25 to May 31, the SNL U.S. Financial Technology Index fell 0.30%.

A recent report from S&P Global Market Intelligence explores how banks and insurers are embracing fintech innovation. The report looks at recent trends and provides outlooks for the insurtech, digital lending, digital investment management, digital banking, payments and distributed ledger technology sectors. Click here to read the report.