Booming Payment Processing Industry: Wirecard Surpasses Deutsche Bank's Market Capitalization
Major U.S. payment processor announces third merger of significant scale in 20XX
The payment processing industry is witnessing a surge in growth, with companies like Wirecard, based in the Munich suburb of Aschheim, capitalising on this global boom. In a notable development, Wirecard's market capitalization has surpassed that of Deutsche Bank, reaching around €20 billion as of the first quarter.
This growth is not limited to Wirecard alone. The third major deal in the industry this year is in the payment processing sector, with U.S. financial services provider Fidelity National Information Services making a $35 billion offer for Worldpay in March. Similarly, at the beginning of the year, Fiserv announced plans to acquire rival First Data for $22 billion.
Wirecard's success is evident in its impressive financial performance. The company's operating profit increased by 41% to €158 million in the first quarter, while its revenue soared by 35% to €567 million. These figures underscore the rapid growth the industry is experiencing, driven by the shift of funds to the internet and the increasing adoption of digital payment methods.
Online Retail Driving Industry Growth
Online retail is a significant factor driving the growth in the industry. As more consumers turn to e-commerce, the need for secure and efficient payment processing solutions is paramount. Wirecard, for instance, generates most of its business in Asia, where the e-commerce market is rapidly expanding.
The Total System-Wirecard Merger
Another significant development in the industry is the upcoming merger between Wirecard and Total System. The premium for Total System shareholders is around 20% over Monday's closing price, and they will receive $119.86 per share as part of the deal. The transaction is expected to close in the fourth quarter, further consolidating the industry and creating a formidable player.
The Future of the Payment Processing Industry
By 2023, the market for payment processing is expected to reach an annual volume of around $3 trillion, according to a study by consulting firm McKinsey. This growth reflects the increasing adoption of digital payment methods and the ongoing evolution of payment systems. The industry is expected to continue benefiting from technological advancements and changing consumer behaviours towards more digital and secure payment methods.
In conclusion, the payment processing industry is undergoing a transformation, driven by technological advancements and the shift towards digital payments. Companies like Wirecard are at the forefront of this change, leveraging their position to capitalise on the growing demand for efficient and secure payment solutions. The upcoming Total System-Wirecard merger and other significant deals in the industry are indicative of this trend, and the future of the industry looks promising.
The online retail sector is a significant driver of growth within the payment processing industry, as more consumers turn to e-commerce, the demand for secure and efficient payment processing solutions increases.
The upcoming merger between Wirecard and Total System, expected to close in the fourth quarter, is a testament to the industry's consolidation and the creation of formidable players, further signifying the industry's promising future.
