Gilles Grapinet (Worldline): “The pandemic will accelerate the disappearance of cash in Europe”

How has the takeover of Ingenico changed Worldline’s place in the digital payment solutions market in 2020?

It has made us double in size in the business of payment services to merchants, which represents half of our turnover. In this sector, we are the leader in Germany, Switzerland, Belgium, the Netherlands, Austria, Luxembourg … Since our IPO in June 2014, with a market capitalization of 2 billion euros and a turnover of 1 billion euros, we have thus multiplied our capitalization by ten and our turnover by five in six years. In all of our other businesses (payment solutions for banks, sale of payment terminals and ticketing), we rely on the dematerialization of paper media in favor of digital and electronic versions of payment methods.

How do you see the acceleration of the disappearance of cash in Europe?

It is a fascinating phenomenon that has been accelerating for twenty years. In Europe, the annual growth rate of electronic digital transactions increased from 5% in the years 2000-2010, to 7% per year from 2015. Before the pandemic, two thirds of payment transactions in number (65% ) were still made in cash in Europe. With very contrasting situations: the penetration rate of electronic transactions being greater than 85% in Northern Europe, and less than 25% for Italy or Greece, or Germany, Switzerland and Austria where the cash is still very established.

How do you plan to take advantage of it?

This is an industrial opportunity for us because in Europe there is still a huge prospect of moving from physical to electronic payment with the tremendous growth of e-commerce and the increase of “contactless”. The smartphone is still very much in the minority as a means of mass payment, except in the United Kingdom where Apple Pay has experienced very strong penetration. And “in app” payment through applications (Uber, Spotify, etc.) is developing very quickly.

We have undoubtedly gained three to four years by accelerating the transition to digital payment.

What will be the impact of the pandemic on these long-term trends?

Three phenomena have been observed. The first is a cash collapse in the first half of 2020. Even today, cash withdrawals from ATMs are 20% lower than they were in 2019. Withdrawals have sometimes dropped by 80 % at the peak of the crisis in some countries. Even after deconfinement, they remain much lower. The second phenomenon is the explosion of contactless payment. Almost everywhere in Europe, banks have practically doubled the limits for contactless (from 30 to 50 euros in France). What is most striking is that there has been an immediate massive adaptation by consumers in Europe. In most countries, more than half of transactions are made without contact (compared to 40% before the Covid). And that has not decreased since: the contactless has been acclaimed. The third change is an explosion in e-commerce and Internet sales. We have undoubtedly gained three to four years by accelerating the transition to digital payment.