The market for payment services is growing. More and more payments are processed online. Above all in Europe, countless payment service providers are struggling to get a share of the cake. Online retail alone, in which payment service providers want to earn money, is said to be heavy at 2.5 trillion euros.
In the struggle for market share and market leadership in Europe, Wirecard, with its own statements of a good 313,000 customers, saw itself well on the way. After the bankruptcy application, the question remains: who is going to grab the business of the Bavarian company?
According to the massive fraud allegations, he doesn’t believe Wirecard will survive the bankruptcy proceedings, says Marcus Mosen.
The former board of directors of Wirecard competitor Concardis assumes that many Wirecard customers have been looking for alternatives for handling their payment business for weeks. However, the market in Europe is extremely fragmented.
Who will be the market leader in Europe?
Companies that could be among the leading payment service providers in Europe have emerged hesitantly.
This includes, above all, the French company Wordline, which only merged in February with the French payment specialist Ingenico, which costs around eight billion euros, to become the fourth largest payment service provider worldwide.
In the past two days after Wirecard’s insolvency application, Worldline’s share had risen by almost ten percent. Secondly, an important player in the market is the Danish company Nets, which, according to its own information, manages the money transfer between 700,000 dealers and 250 banks across Europe.
Only last year, Nets merged with the Hessian Concardis, which in turn offer digital payment solutions in Germany, Austria, Switzerland and Southeast Europe. Concardis offers all payment services from a single source – from card acceptance and payment processing to payment devices and payment solutions for online business.
Larger Wirecard competitors are also the Italian Nexi, the German companies Computop and Heidelpay, and Payone, in which the savings banks hold a stake and recently acquired 40 percent of Wordline.
Adyen could move up to the Eurostoxx
One of the largest European players is the Dutch company Adyen, which could soon even climb into the EuroStoxx 50, the most important stock index in the Eurozone. The research company Jeffries believes that the Dutch could win over a good number of Wirecard customers. Adyen generated 2.66 billion euros last year alone.
Unlike most payment service providers, who cover the entire range of software and payment solutions from stationary to online retail to mobile payments, after a 75 percent increase in the share price, it is now worth almost 40 billion euros and can therefore be used by the big US – Connect service providers.
The market in the United States is far less fragmented, with some large providers such as FIS, Fiserv and Global Payments implementing the vast majority of all money transfers.
Startups can get into trouble
Mosen says that Wirecard’s failure could be particularly problematic for the start-up industry, where the insolvent company had many customers.
Mosen may see the Solarisbank or N24 as a replacement. However, some start-ups may well lack the money to set up a new payment system with another provider.
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However, there is increasing doubt about the size of the cake that can be distributed after Wirecard bankruptcy. The industry service finance scene assumes that the gap in the balance sheet will go far beyond the missing 1.9 billion and that Wirecard may even have generated operating losses.
In 2018, the “Wirtschaftswoche” had already analyzed Wirecard’s market position in Germany and came to the conclusion that the company only processes 5.9 percent of all sales in the 29 largest online shops in Germany. Only four of the 29 companies were customers of Wirecard.
Merrill Lynch, too, had expressed doubts about Wirecard’s market position. The US bank asked the 100 largest online retailers about their payment service providers. 69 companies supplied data, only five of them were customers of Wirecard.
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