Dealmaking in global payments to record heights

Rapid growth driven by a transformation in the way consumers pay for products has pushed dealmaking in the global payments industry to record heights, with 2018 already the biggest year ever for acquisitions in the sector. Payments technology — including consumer-facing products such as Apple Pay as well as the back-end infrastructure that enables transactions — has stood out even amid a general boom in merger and acquisition activity. There were 102 transactions worth a total of $46 billion in the first six months of the year… surpassing 2017’s full-year figure of $32.9 billion. PayPal alone made four acquisitions in five weeks in May and June, including swooping on Swedish group iZettle with a $2.2 billion deal just weeks before it was due to list on the stock market. Innovations such as contactless payments and online shopping have prompted massive changes in consumer behaviour… Such consumer products have increased demand from merchants for ways to cater to different customers… Investor enthusiasm has been reflected in public markets — shares in Dutch group Adyen doubled on their first day of trading after its initial public offering last month. PayPal’s own shares have risen 60 per cent over the past 12 months… Payments companies’ high cash flow and relatively asset-light businesses have also made them attractive to private equity groups.
Nicholas Megaw