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Global merchant acquiring volume is set to hit $41 trillion in volume by 2026, with fresh impetus coming from skyrocketing e-commerce growth, soaring contactless usage and a reshaping of business models.
Merchant acquiring in the Med – A hot business
The wave of merchant acquirer consolidation seen over the past few years is set to become a tsunami, as long-standing independent and bank-owned entities finally succumb to global titans that have been steadily picking off smaller competitors across several European markets.
Italy and Greece are the two markets where much of the merger and acquisition action is taking place.
2021 saw France’s Worldline acquire 80% of Italy’s Axepta, the merchant acquiring entity of the BNL banking group in Italy.
Founded in 2006, Axepta Italy is one of the large bank-owned acquirers in the country. It acquires around 200 million acquiring transactions per year (giving it a 5% market share) from a 220,000-strong POS terminal acceptance network.
In the continuity of Worldline’s existing partnerships with more than 17 banks and banking federations in Italy, the creation of a joint venture with BNL (BNL retaining a 20% ownership in Axepta Italy) is also designed to be an open vehicle for welcoming existing partners and other Italian banks looking for enhanced scaling and cost efficiencies.
Most recently, in November 2022, Worldline announced it had signed a binding agreement for the acquisition of Banco Desio’s merchant acquiring activities and the planned set-up of a commercial partnership aiming to leverage Banco Desio’s banking network, in order to distribute Worldline’s payment products and services to merchant customers of the bank in Italy.
Banco Desio Group’s merchant acquiring portfolio delivers payment solutions to around 15,000 merchants generating 40 million transactions per year, representing €2 billion of acquired transaction value. It also manages the marketing and distribution of more than 19,000 POS terminals to the merchants within the bank’s network.
As part of the transaction, Worldline will enter a long-term commercial partnership with Banco Desio as a key commercial channel in order to distribute Worldline’s payment product and services to merchants.
But Nexi, the Italian behemoth formed from absorbing Nets and SIA, is also making more moves in acquiring. In November 2021, Intesa Sanpaolo teamed up with Nexi for the transfer of the POS acquiring business line of the former UBI banking entity, which Intesa Sanpaolo acquired.
The deal is in keeping with the strategic partnership launched with the Nexi Group in June 2020 with the contribution of Intesa’s acquiring business line. Nexi followed up that deal in June 2022 with its acquisitions of the acquirer businesses of BPER Banca and Banco di Sardegna.
Greece is also a hotbed of acquiring activity, with Worldline sealing a €256 million deal for Eurobank Merchant Acquiring, one of the main acquirers in Greece with a 20% market share.
Eurobank Merchant Acquiring manages 219 million transactions acquired per year, representing a payment volume of €7 billion from a 190,000-strong POS network and a portfolio of 123,000 merchants.
Not to be outdone in Greece, in August 2021, Nexi acquired Alpha Bank’s merchant acquiring business, by way of a spin-off to a newly-incorporated entity in which Nexi will hold a 51% stake. In November 2021, the 100% subsidiary company of Alpha Bank, Alpha Payment Services, was established.
While Nexi and Worldline have been playing merchant acquiring chess with each other, In December 2021, National Bank of Greece announced a strategic cooperation with EVO Payments on its merchant acquiring business.
NBG’s Merchant Acquiring Business will form the basis of the new company and in addition, there will be a long-term exclusive distribution agreement where NBG will offer its merchants card acceptance solutions through proprietary products and processing platforms of EVO. As of 2021, NBG’s merchant acquiring services covered 203,000 merchants.
In March 2022, Greece’s Piraeus Bank completed the spin-off of its merchant acquiring services to a new company and its subsequent sale to Euronet Worldwide.
In 2021, Piraeus Bank’s merchant acquiring unit recorded card transactions increasing by 23% in terms of turnover value, 19% in terms of transactions volume and 40% in terms of net result from 2020.
At the end of the year, Piraeus Bank had 243,000 EFT/POS terminals installed in more than 200,000 points of sale.
The pool of merchant acquiring acquisition targets dwindles by the day. How long before the acquiring giants turn directly on each other?
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