This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
FIS is letting go of its Merchant Solutions business, along with the Worldpay brand, which it originally acquired for $34 billion in 2019.
The company states that Worldpay needs a different capital allocation strategy to enable the brand “to pursue more aggressive investment opportunities, including M&A.”
The spin-off is expected to take 12 months.
FISacquiredWorldpay for $34 billion in 2019, and after rumors of a break-up swirled last week, the Florida-based firm announced plans to let go of and restore the Worldpay brand. Specifically, FIS is spinning out the Merchant Solutions business it created from the Worldpay acquisition.
Jeffrey A. Goldstein, FIS Chairman of the Board, said that “… the spin-off of Worldpay will unlock shareholder value by improving both companies’ performance, enhancing client services, and simplifying operational management. We are confident that this is the right time for the separation of Worldpay.” Goldstein added that the Merchant Solutions business requires “increased investment in growth and a different capital allocation strategy” than FIS.
In its press release announcing the change, FIS explained that this different capital allocation strategy will enable Worldpay “to pursue more aggressive investment opportunities, including M&A.” The long-term goal of the spin-off is for Worldpay to expand geographic coverage of its eCommerce tools, strengthen its enterprise offerings, and shift toward software-led payments.
After the split, which is expected to be completed in the next 12 months, FIS and Worldpay will retain strong ties. As a result, FIS’ Merchant Solutions business will take on the Worldpay brand, which will be restored. Originally founded in 1971, Worldpay conducted $2 trillion in payments volume in 2022. Charles Drucker, who was Worldpay CEO from 2004 until the acquisition in 2019, will oversee the spin-off and will once again serve as the company’s CEO when the separation is finalized.
Founded in 1968, banking technology company FIS has acquired a total of 17 companies, two of which were purchased after the Worldpay acquisition in 2019. The company offers 450+ solutions and processes more than 110 million transactions each day. FIS is publicly listed on the NYSE and has a current market capitalization of almost $40 billion.
This week’s edition of Finovate Global takes a look at recent fintech developments in Germany where green banking, embedded finance, and open banking are the themes at the top of this week’s fintech headlines.
First up, Berlin-based Sustainability-as-a-Service innovator ecolytiqannounced that it was teaming up with Slovakian financial institution Tatra Banka. The climate engagement fintech will provide Tatra Banka with the technology the firm needs in order to launch new green banking functionality on its online banking brand, Blue Planet. The new feature, which will be made available to Tatra Banka’s more than 600,000 customers, will enable users to monitor the impact their transactions may have on the environment (for example, with CO2 emissions), provide users with ideas on how to reduce their environmental impact, and offer rewards for spending that is environmentally friendly.
Founded in 2020, ecolytiq demonstrated its technology at Finovate’s developer event, FinDEVr 2021, which was held as a part of FinovateSpring that year. Putting accurate data at the center of the ability to move toward greater environmental sustainability, ecolytiq demonstrated how its open knowledge graph and streaming technology keep its data relevant and current. More recently, the company announced a strategic partnership with exceet Card Group, makers of sustainable payment cards made from wood and, the following month, teamed up with French sustainable neobank Green-Got.
Peter Golha, a director at Tatra Banka said that the institution believed it had a a role to play in the transition toward a more environmentally sustainable economy. “Not only have we a chance to change our own trajectory, but also a chance to live the topic of sustainability alongside our clients,” Golha said.
Founded in 1990, Tatra Banka was the first private bank to be established in Slovakia. Winner of the TREND Bank of the Year award for two years in a row, Tatra Banka announced this spring that it had achieved its greatest profit to date, reporting $164 million (EUR 162.1) in consolidated profits for the financial year 2021.
Second, German financial management platform for businesses Airbank inked a deal with Klarna Kosma this week. Klarna Kosma is an open banking platform launched by Swedish e-commerce innovator Klarna this spring. Seen as a rival to fellow Finovate alum Tink and its open banking platform, Klarna Kosma offers financial institutions, fintechs, and merchants connectivity to more than 15,000 banks in 24 countries around the world via a single API. Kosma was made possible in many ways by Klarna’s acquisition of direct, bank-to-bank payments company SOFORT in 2014, and Klarna has been developing and expanding the service ever since.
“Over the past year, the demand for Open Banking services from financial institutions and fintech startups has reached a tipping point,” Klarna Kosma VP Wilko Klaassen said. “(This) is why we have built a dedicated business unit which brings together engineering, product management, sales and marketing all together in the same team to focus on this $15 billion, fast-growing market.”
Airbank will leverage its new relationship with Klarna Kosma to “accelerate” its expansion into European markets and beyond. Airbank enables businesses to consolidate their bank accounts in a single location, allowing them to more easily automate bill management, make payments, and manage their finances. Companies also can use Airbank’s platform to track their financial transactions and forecast future liquidity. The partnership with Klarna Kosma will make it possible for Airbank to securely access account information from thousands of banks around the world, expand more aggressively, and better serve its SME customers that have global requirements.
“By the end of this year, we will serve over 50 counties, making Airbank the most comprehensive global banking solution for SMEs in the industry, with the ability to connect bank accounts from almost anywhere in the world,” Airbank founder and CEO Christopher Zemina said. “We are delighted to have Klarna Kosma as an experienced and dynamic partner that shares our ambition to shape the future of B2B financial management.”
Lastly, early in the week we learned that Berlin-based embedded finance startup Monite had teamed up with Codat, a U.K. firm that offers a universal API to enable access to consented business data from banking, accounting, and ecommerce platforms. The partnership will enable both SaaS platforms and financial institutions to integrate invoicing and billing functionality into their apps. This will allow platforms and institutions to offer businesses a unified solution for managing their financial operations.
In a statement, the CEOs of both Monite and Codat praised the great variety of financial apps and platforms dedicated to serving SMEs. The challenge, according to both Monite CEO Ivan Maryasin and Codat CEO Pete Lord, is that the variety can be overwhelming for many small businesses. “What’s still missing are the ‘super apps’ that bring everything together,” Maryasin said. “It can be time-consuming to manage and get the most out of them all,” concurred Lord.
Founded in 2020, Monite has raised $7.8 million in funding for its technology that empowers financial institutions and platforms to offer financial services such as multi-banking, AP automation, invoicing, and more to their customers. London, U.K.-based Codat neared unicorn status last month upon raising $100 million in Series C funding. The investment took the company’s total funding to more than $176 million and gave Codat a valuation of $825 million. The round was led by JPMorgan Partners, and featured participation from Plaid and Shopify.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Entrepreneur.com featuresXero in its round up of solutions to help companies better control their business expenses.
SaaS banking engine Mambuinks deal with its first Brazilian client, Acesso.
Worldpay to deployUP eCommerce Payments solution from ACI Worldwide as part of new international partnership.
Czech Republic’s Twistoannounces plans to expand to Poland this fall, with expansion to Romania to follow.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
eToro has launched a portfolio of firms involved in Facebook’s new digital currency Libra.
Jumio to power digital identity for Brazil-based BTG Pactual.
Settlelaunches its mobile payments app in Croatia.
Worldpay and the University of Cincinnati partner to fill business talent shortfall.
Coast Capital Savings teams with OnDeck to offer small business members financing options.
Scooter fleet company Spin joinsPassport’s micro-mobility pilot program.
First Rate and HiddenLeverspartner to provide risk analytics and business intelligence to the wealth management industry.
BeSmarteeannounces direct integration with private mortgage insurance provider Arch MI.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
ACI Worldwide to help Indonesia interbank network ALTO to expand its payment capabilities.
Jack Henry & Associatesunveils its digital account opening solution, JHA OpenAnywhere.
Worldpay to releaseFraudSight machine learning-powered fraud solution.
PAUL UK selectsYoyo to introduce a combined mobile payments and personalized loyalty app to its customers.
Mintrolls out a new app experience for Android users
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
The news that payment processing giant Worldpay is expanding to Australasia comes just days after the U.K.-based company announced its pending sale to FIS.
Worldpay is making two major moves in the Australasia region. First, it opened two sales offices in Australia, enhancing the company’s market presence. Second, Worldpay launched into the New Zealand market, after having received its local license, enabling in-country payment processing.
With the new Australia locations, Melbourne and Sydney, Worldpay is ultimately aiming to gain more clients. The company already boasts clients such as VGW, Skiddoo, Lonely Planet, and Webjet. And there’s plenty of room for growth in the region– Australia’s eCommerce sector is expected to grow almost 37% in the next three years.
Having a card processing license in New Zealand will allow Worldpay to process New Zealand-based merchants’ payments domestically. Worldpay’s Global reach will create a more seamless way for those New Zealand-based companies to trade with the rest of the world economy.
“By building a team of payments experts located in Australia, alongside the addition of a domestic card payment acquiring capability in New Zealand, Worldpay can offer a service that goes beyond the transactional. Our investment and addition of this new license will enable us to further provide unparalleled access to global markets to help eCommerce businesses deliver on their international growth ambitions,” said Worldpay’s Phil Pomford, General Manager of Global Enterprise eCommerce in APAC.
Founded in 1971, Worldpay most recently participated in FinDEVr Silicon Valley 2016, where the company discussed what customers are looking for in the payment journey. Earlier this month, the company agreed to be acquired by FIS for $34 billion. The deal is expected to close at the end of this year.
Kineticaunveils its active analytics platform that makes it easier to deliver smart analytics applications at scale.
Forbes interviews co-founder and CEO of Onfido, Husayn Kassai.
Tinkoff Mobile, a subsidiary of Tinkoff Bank, announces service in six new regions.
DocuSignlaunches its DocuSign Agreement Cloud to help companies better manage business agreements digitally.
Capsilonannounces the beta launch of its digital underwriter solution.
AlphaPointadds DiamondBack stablecoin to its crypto exchange.
Sri Lanka’s Bank of Ceylon goes live with Clari5 Anti-Money Laundering (AML) Solution to address money laundering threats.
PYMNTS: Amazon and Worldpayteam up on one-click commerce.
NetGuardians‘ AI fraud-prevention software available on Microsoft Azure.
TurnKey Lendersigns partnership agreement with Refinitiv.
MX and Personeticspartner to bring AI-driven insights to financial institution customers.
ICBA and Jack Henry’s ProfitStars expand preferred service provider program with remote deposit capture solutions.
Insuritas and Oregon Mutual announce partnership to offer auto and home insurance solutions through meta-agency platform.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Banking technology giant FIS is acquiring payments firm Worldpay via a cash and stock combination – bringing Worldpay’s enterprise value to approximately $43 billion (including the assumption of Worldpay debt, which FIS expects to refinance), reports Henry Vilar of Fintech Futures (Finovate’s sister publication).
According to Bloomberg, FIS is spending $34 billion on this purchase.
“Scale matters in our rapidly changing industry,” said Gary Norcross, chairman, president and CEO, FIS. “Upon closing later this year, our two powerhouse organisations will combine forces to offer a customer-driven combination of scale, global presence and the industry’s broadest range of global financial solutions.”
“At Worldpay, our focus has always been on delivering more value to our clients and partners and making decisions that achieve our growth and performance objectives,” said Charles Drucker, executive chairman and chief executive officer, Worldpay.
Organic revenue growth outlook has grown from 6% to 9% through 2021 for FIS, in conjunction with $700 million of total EBITDA synergies from the combination of revenue and expense opportunities over the next three years.
This acquisition comes hot on the heels of another massive deal in the payments space: Fiserv, another US heavyweight and direct rival of FIS, buying First Data.
The combined company of Worldpay and FIS will have pro forma 2018 annual revenue and adjusted EBITDA of approximately $12.3 billion and $4.9 billion, respectively.
Upon closing, the combined company’s Board of Directors will consist of 12 members, seven of which will come from FIS’ board of directors and five of which will come from Worldpay’s.
Gary Norcross will remain as FIS chairman of the board, president and chief executive officer. Charles Drucker, Worldpay’s current executive chairman and CEO, will serve as the executive vice-chairman of the board.
The transaction is subject to receipt of required regulatory and shareholder approvals and other customary closing conditions and is expected to close in the second half of 2019.
FIS demonstrated its Cardless Cash solution at FinovateFall 2016. Cardless Cash provides consumers with faster, more secure options when it comes to sending and accessing cash via ATMs, including the ability to pre-order funds from their mobile banking app.
Founded in 1958 and headquartered in Jacksonville, Florida, FIS trades on the New York Stock Exchange under the ticker “FIS.” The company has a market capitalization of $35 billion.
Worldpay participated in our developers conference, FinDEVrSiliconValley 2015. The company’s Head of Strategic Partnerships discussed how businesses can add secure payments to any website, app, or mobile device via the Worldpay Securenet API.
Worldpay was founded in 1971 (as Midwest Payment Systems) and is headquartered in Cincinnati, Ohio. With a market capitalization of $33 billion, Worldpay trades on the NYSE under the ticker “WP.”
IBMDebuts Blockchain Network for Cross-Border Payments.
Finovate Global:PayPal in Argentina; TemenosBacks African Challenger Bank.
Around the web
Envestnet to acquire PIEtech, maker of MoneyGuide, in $500 million deal.
HooYupartners with online lottery betting operator, Lottomart, to help the Gibraltar-based firm meet AML requirements.
Wiprolaunches its AI and machine learning-powered accounts payable, KYC, and other solutions on Amazon Web Services.
Polish neo bank Nest Bank unveils new lifestyle services module, Finanteq’sSuperWallet, to its mobile banking app.
FindBiometrics interviewsBiometric Signature ID CEO, President, and founder, Jeff Maynard.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
Glacier Bancorp Deploys RoostifyPowered Digital Mortgage Solution.
Around the web
Fiserv Announces Plans to Acquire First Data in $22 Billion Deal.
Forrester namesCREALOGIX as a leader in the Now Tech: Digital Banking Engagement platforms, Q4 2018.
Worldpay and Revel Systems announce enhanced partnership to provide consolidated POS and payments solution.
International bookmaker and gaming operator SKS365 picks ARIC Fraud Hub from Featurespace for real-time fraud protection.
PayPalappoints marketing executive Allison Johnson to EVP and Chief Marketing Officer.
Forbes featuresiProov in article discussing identity and blockchain technology.
FICOteams up with electronics payments specialist Conductor to support payment card fraud protection in Brazil.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.