{"id":4525,"date":"2019-03-20T19:16:37","date_gmt":"2019-03-20T19:16:37","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=4525"},"modified":"2022-08-09T11:28:17","modified_gmt":"2022-08-09T17:28:17","slug":"another-huge-processing-ma-deal-why-the-fis-worldpay-merger-could-create-opening-for-payment-facilitators","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/archive\/another-huge-processing-ma-deal-why-the-fis-worldpay-merger-could-create-opening-for-payment-facilitators\/","title":{"rendered":"Another Huge Processing M&A Deal: Why the FIS \/ Worldpay Merger Could Create An Opening for Payment Facilitators"},"content":{"rendered":"\n


This week, the\nconsolidation wave continued as FIS and Worldpay announced their plans to\nmerge, creating another behemoth in the financial technology industry. <\/strong><\/p>\n\n\n\n

But the fact that\nwe\u2019re running out of synonyms for \u201cbig\u201d may create an even greater opening for\npayment facilitators than existed before.  <\/strong><\/p>\n\n\n\n

FIS announced\non Monday that it plans to acquire Worldpay in a stock and cash deal worth\nabout $43 billion. This comes quickly on the heels of Fiserv\u2019s January news\nthat it plans\nto acquire First Data in a deal worth $22 billion. <\/p>\n\n\n\n

According to Rick Oglesby, president of AZ Payments Group, the\nFIS \/ Worldpay deal has more in common with the Fiserv \/ First Data deal than\ntiming. Also similar is the fact that Worldpay and First Data are huge merchant\nacquiring companies that are being acquired by companies that have\ntraditionally focused on banking technology. <\/p>\n\n\n\n

\u201cThrough these deals,\u201d Oglesby told PaymentFacilitator,\n\u201cFiserv and FIS get to expand their target markets by extending their\nplatform-as-a-service business models beyond banking services and into offering\nfinance-related services in higher growth segments (to retailers and software\ncompanies).\u201d<\/p>\n\n\n\n

\u201cThat\u2019s a strategy that makes sense for bolstering the\nvaluation of their respective firms: expanding their business model into new,\nlarge markets with higher growth rates than their traditional businesses,\u201d he\nsaid.<\/p>\n\n\n\n

What makes sense for valuation doesn\u2019t always make sense for\nthe customer, however, and Oglesby believes service has the potential to suffer.\nAs the merchant acquirers are swallowed into huge conglomerates, \u201cthey are\nlikely to lose skilled staff, struggle with managing their many tech platforms,\nstruggle to find synergistic strategies across their lines of business, and to\nincorporate new priorities driven by their parent companies.\u201d<\/p>\n\n\n\n

But Oglesby argues that this has the potential to create\neven more opportunity for payment facilitators, who are known for delivering\nmore personalized, merchant-centric service. <\/p>\n\n\n\n

\u201cAs the major processors consolidate and add scale, PF\nsponsorship and processing will be available at lower costs which increases the\npotential margin available to PFs,\u201d he said. <\/p>\n\n\n\n

Additionally, the larger companies will likely be focused on\nscaling their businesses, which could lead to a greater need for third parties\nto manage direct relationships with smaller merchants, Oglesby said.<\/p>\n\n\n\n

\u201cAs these companies get bigger, they will naturally focus on\nlarger business opportunities and increasingly concede smaller ones to third\nparties by enabling PFs and other integration deals. Specialized product\nofferings and niche-oriented distribution are not part of the program for a\nscale business,\u201d he said.<\/p>\n\n\n\n

For now, however, the merger continues a trend that is\ngetting the attention of the broader business world, as evidenced by this\narticle<\/a> from CNN, which cites a McKinsey estimate that payments are expected\nto reach nearly $3 trillion in the next five years.<\/p>\n\n\n\n

\u201cIt\u2019s very hard to predict what it will mean this early\u2014the\nsize and scope is so vast it will take quite some time to see,\u201d said Todd\nAblowitz, CEO of Infinicept, which provides payment facilitator enablement\nsoftware and APIs. <\/p>\n\n\n\n

\u201cWhat is clear, however, is that the payment processing\nbusiness is consolidating again. This consolidation of players of increasing scale\ncreates opportunities across the industry and will continue to bring attention\nto payments,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

This week, the consolidation wave continued as FIS and Worldpay announced their plans to merge, creating another behemoth in the financial technology industry. <\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1015],"tags":[70,308,309,404,489,990],"class_list":["post-4525","post","type-post","status-publish","format-standard","hentry","category-archive","tag-az-payments","tag-first-data","tag-fis","tag-infinicept","tag-ma","tag-worldpay"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4525","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=4525"}],"version-history":[{"count":3,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4525\/revisions"}],"predecessor-version":[{"id":8811,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4525\/revisions\/8811"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=4525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=4525"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=4525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}