An analysis of future developments of cash accep-

tance by merchants

It is common knowledge in the world of payments

that cash – consisting of bills and coins – is the single

legal tender. This means that by law cash has to be

accepted by merchants as a payment in return for

their goods and services. It also implies that all other

payment methods can be refused by merchants,

including also the most common alternatives such as

debit and credit cards. The key advantages of cash are

straightforward: it is publicly accessible, can be used

immediately, it is independent of technical logistics

and therefore always available and last but not least it

is anonymous.

Merchants like to get rid of cash

Keeping this in mind, it is not surprising that cash is

the most-used payment method at the point of sale

(POS) in Germany, accounting for 53 per cent of all

transactions in 20151. However, there are several

trends that result in declining cash payments. For sev-

eral reasons, not only debit and credit cards, but also

innovative mobile payment methods such as Apple

Pay and other solutions are gaining in relevance.

Based on INNOVALUE research, cash is the most

expensive payment method at the POS out of a total

cost perspective. Main cost drivers are manual pro-

cesses linked to handling cash that does not occur

with electronic and digital payments. This can be

interpreted as a main reason why we are seeing more

and more merchants pushing electronic POS pay-

ment methods such as (contactless) credit and debit

cards. It is to mention, that these payment methods

can additionally accelerate the checkout process as

they are much faster and convenient to process,

especially when it comes to small transactions

Will merchants start to refuse cash acceptance anytime soon?

florian seeh

Junior Associate

thomas Grohnert

Director

paymentsInsight. Opinion.

vol 14

COntent

1 Will merchants start to refuse

cash acceptance anytime soon?

Thomas Grohnert and Florian Seeh discuss whether mer-

chants might start to refuse to accept cash anytime soon.

3 apple pay on the Web –

a short revieW

Jan Lettow gives an update on the latest developments of

Apple Pay and the possible next steps.

4 public market valuations and

the market environment

Markus Massem elaborates the most recent market tur

bulences and its reaction on UKs decision to leave the EU.

6 m&a deal activity

Which transactions were the most interesting in the last

quarter? What are the current M&A drivers and what can

we expect in remaining year 2016? Robert Kayser, Aposto-

los Psaras and Philipp Steinbrück answer these questions.

9 venture capital activity

Stefan Thomalla and Eduardo Cenci review the latest pay-

ment start-up funding activities of Q2 2016 and elaborate

the strategic thinking.

11 m&a deal activity

Transaction overview

14 venture capital activity

Transaction overview

1 EHI inquiry 2015 at 522 companies with total revenue of EUR 245 billion, reflecting 57 per cent of total retail revenue

(without car trade, petrol stations and drug stores)

payments Insight. Opinion.

figure 1: Cash payment limitations in europe (source: european Consumer Center Germany)

that can be paid contactless without two-factor

authentication. The current limit for such transac-

tions is for example EUR 25 in Germany and is

expected to slowly rise after adoption. This has

already occurred in the UK where the limit was

raised from GBP 20 to GBP 30. These combined fac-

tors result in some merchants wanting to get rid of

cash.

Legislative changes support the process

Besides merchants pushing cashless payment

methods, we also see legislative initiatives that limit

cash acceptance in general. One example is cash

limits, whose potential introduction was discussed

very controversially and emotionally in Germany

but is already reality in many European countries. A

look at European countries

shows that legislation

regarding cash limits varies

strongly between different

nations and can be consid-

ered in three groups: Ger-

many, Austria, Iceland and

the two Baltic states Latvia

and Lithuania are countries

where cash transactions

are not limited at all. Several countries including the

Nordics, UK and the Netherlands have no limit in

the referring legislation; however the use in practice

is restricted. An example of such restrictions is the

fact that UK merchants, who want to accept cash

payments in excess of EUR 15,000, need to register

themselves with tax authorities as 'High Value Deal-

ers'. In Sweden, for another instance, accepted pay-

ment instruments may be limited on a contractual

basis; a merchant is not obliged to accept cash as

payment, if the limitation is stated clearly before

making the sale. The third group includes nearly all

of the southern European countries. Here legislative

cash limits range between EUR 1,000 and EUR

15,000 often differentiating between residents and

non-residents – usually allowing non-residents to

pay higher amounts in cash.

The most cash-adverse legislation probably can be

observed in Denmark: In May 2015, the former gov-

ernment proposed a law that would have allowed

most retailers such as

restaurants, clothing

stores and gas stations

to refuse payments in

cash completely, start-

ing January 1st, 2016.

However, the proposal

did not find a majority in

the parliament at the

time. Similar movements

can be observed in Sweden, where the majority of

bank branches no longer keep cash on hand or take

cash deposits – and many, especially in rural areas,

no longer have ATMs.

Also the European Commission’s Payment Services

Directive 2 (PSD2) can be interpreted as an initia-

tive favouring cashless societies and causing mer-

chants to prefer cashless payments as it ‘focuses on

electronic payments, which are more cost-efficient

than cash and which also stimulate consumption

and economic growth’, as stated in the Memo2 of

the European Commission published alongside

PSD2.

European trends, Germany's Holy Grail

To sum things up, there are several trends that imply

reduced cash acceptance by merchants in some

European counties, especially the Nordics, yet none

of them can be observed in Germany. Nevertheless,

we expect German merchants to push electronic

and digital payments because of lower costs and

faster checkout processes, leading to a slowly but

surely declining number of transactions made in

cash. However, if there ever was a train with cash-

less societies, Germany is going to be one of the last

to jump on.

Based on InnOVaLUe research, cash is the

most expensive payment method at the pOs out of a total cost perspective

2 European Commission, MEMO/15/5793

No limit

No limit in the referring legislation however restricted use in practice

Cash payment limited

2

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payments Insight. Opinion.

What’s new?

About two years ago, Apple introduced Apple Pay

to the broader public. Since then Apple Pay has

been one of the hot topics in payments. Apple has

been able to set a benchmark in terms of adoption

rate and usage of mobile payment methods.

Observers have mainly attributed this to the very

convenient consumer experience and the attrac-

tiveness of the brand for consumers as well as

merchants.

However, the use of Apple Pay has until now been

limited to the use cases of POS payment and in-

app purchases. On this year’s Worldwide Develop-

ers Conference in San Francisco, Craig Federighi,

SVP of software engineering, announced that

Apple Pay will now move into the web. Taking into

account certain open questions, this article will

highlight some of the benefits and disadvantages

of this step from different perspectives.

What is known?

Timing: The introduction is announced for this fall.

Regional scope: Presumably in all countries

where Apple Pay is already available (United

States, United Kingdom, Canada, Australia, China

and Singapore with Switzerland, France and Hong

Kong coming up).

Merchants: Multiple large online merchants

have already been announced by Apple to offer

web payment from the start (e.g. easyJet, Expedia

and Target).

Architecture: Apple Pay on the web will be inte-

grated into the existing Apple Pay architecture and

thus be based on the payment card infrastructure.

Hence the incumbent players within the payment

card value chain, i.e. issuer, acquirer and schemes

as well as a possible payment service provider

(PSP), will still participate in the processing of the

transaction.

Payment process: After selecting Apple Pay

within the checkout process, the transaction will be

prompted to the iPhone or Apple Watch, where the

user has to authorize it by Touch ID.

apple pay on the Web – a short revieW

Jan lettoW

Manager

From a consumer perspective, apple has once

again enriched the apple ecosystem

Restrictions: The use of Apple Pay on the web

will only be possible within the Apple ecosystem.

This implies having to use a Safari browser in com-

bination with an iPhone or an Apple Watch. Due to

the use of Apple’s Continuity (seamless connec-

tion of Apple devices) the devices must also be

connected to the same Wi-Fi.

Revenue model: It is not yet clear whether

the current revenue model of Apple Pay will be

replicated, i.e. issuers will need to share their inter-

change revenue with Apple.

Merchant integration: Also unclear is the mer-

chant integration of Apple Pay, especially whether

and which PSPs will be supporting an integration of

Apple Pay.

Consumer perspective

From a consumer perspec-

tive, Apple has once again

enriched the Apple eco-

system. This increases the

value proposition of the

ecosystem, making it more

attractive on the one hand

but on the other hand also increases the lock-in

effect for the consumer. To use Apple Pay on the

web, consumers will need to use a Mac or iPad

running Safari as well as an iPhone or Apple Watch.

From a user experience perspective, Apple again

sets a benchmark in light of upcoming regulation

regarding strong / two-factor authentication. Almost

en passant Apple presented a solution for integrat-

ing the second factor into the online payment pro-

cess. Most importantly, the solution seems to be

almost seamless from a consumer perspective, at

least on the basis of what is known today.

Merchant’s perspective

From a merchant’s perspective, Apple Pay will be

another online payment method in the world of

hundreds of online payment methods. The differ-

entiating factor will, however, be the access to an

affluent group of consumers as well as a conve-

nient and secure payment process.

Possible drawbacks for merchants are the restricted

consumer reach of Apple Pay on the web due to the

requirement of having to be completely inside of the

Apple ecosystem (Safari has a global browser mar-

ket share of ~12.5 %). In addition, the integration of

Apple Pay into the web shops as well as the pricing

and liability allocation are not yet clear.

Competitor’s perspective

The focus of Apple is to enrich its own ecosystem.

Hence, Apple Pay on the web is “just” another fea-

ture of Apple which differentiates Apple from its

direct competitors, e.g. Samsung and Google.

However, both are currently working on equivalent

features.

The implications for online payment providers

such as PayPal are much more severe. Up until

now, none of the relevant players have solved the

dilemma of strong customer authentication in

combination with seamless customer experience.

In addition, the costs for merchants will presum-

ably be in the range of accepting credit cards, i.e.

comparably low after the

interchange fee regulation.

This leads to the conclu-

sion that significant con-

sumer adoption and

merchant acceptance

might be possible for

Apple Pay to achieve and

thereby become a strong competitor for the

incumbent player.

From the perspective of banks, the move of Apple

Pay into the web can be as interesting as the move

into payment in general, as long as they stay in the

value chain as issuers and acquirers (i.e. Apple

does not move away from the payment card-based

infrastructure). In this case, they will benefit from

increasing transaction volumes as well as main-

taining the customer relationship. This benefit,

however, comes at the cost of a share of the inter-

change fees and at the risk of Apple moving

beyond payment and further into the realms of

banking / financial services.

Possible next steps

The step of Apple Pay into the web was not sur-

prising but rather conditional for further develop-

ments. Payment is no longer channel-bound but

covers all relevant channels, from the physical POS

to online. Once it has achieved this omni-channel

experience, Apple might further expand the Pay

feature with functions such as P2P-payment or

support of voice commerce. From there, steps

beyond payment might be expected, which could

cover topics such as banking, financing or savings.

3

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payments Insight. Opinion.

Following the sell-off experienced earlier in the year

during February 2016, the UK vote in favour of an

exit from the European Union put stock markets

onto yet another rollercoaster

ride. Following the vote on June

23rd, global stock markets took

an immediate dive and more

than $2 trillion of market value

was whipped out in the after-

math. Especially financial

stocks were among the hardest

hit, as some analysts described

the events and potential impli-

cations among the most

impactful for the financial services industry in

decades. In line with the initial stock market reac-

tion, the pound took a significant hit, falling strongly

against the dollar and reaching lows that were not

seen in 31 years.

public market valuations and the market environment

markus massem

Manager

Following the vote on June 23rd, global stock

markets took an immediate dive and more than $2 trillion of market value was whipped out

What followed the sharp declines in global stock

market as a consequence of the vote, however, was

a recovery that led to the main global indices recu-

perating most if not all of the losses. The FTSE 100

had recovered all of the losses by early July, while

the wider FTSE 250 is still trading below the low

points reached immediately after the Brexit reac-

tion. Overall, the current

volatility in the markets

is unlikely to disappear,

as great uncertainty

around the timing and

impact of the UK’s next

steps and potential

implications persists.

On more positive eco-

nomic news, the US

reported the addition of

287,000 new jobs in June but also market fears

such a slowdown in Chinese economic growth and

interest rate decisions by the Fed have not disap-

peared at all.

In light of the aforementioned market turbulences

that occurred at the end of June, about half of the

public companies in our payments universe (see end

of article for composition) have shown negative

returns over the past three-month period up to July

6th, with 11 out of 21 stocks posting share price

decreases. Since the beginning of the year, 11 out of

the 21 stocks are in negative territory. The overall pay-

ment index is down by about 1 % over the past three

months and down 2 % since the beginning of 2016.

The acceptance bucket realised a loss of 5 % over

the three-month period (-8 % year to date). Veri-

fone suffered the biggest single day drop in more

The payments universe (alphabetical order):

Acceptance: First Data Corp, Global Payments,

Ingenico, PayPoint, Vantiv, Verifone, WorldPay

Processing: Cielo, Euronet Worldwide, FIS, Fiserv,

Total System Services

PSP/Online payments: PayPal, Paysafe, Wirecard

Issuing/Prepaid solutions: FleetCor, Green Dot, WEX

Schemes: American Express, MasterCard, Visa

Sources: INNOVALUE research and company filings;

Google Finance for share price data

than three years, plunging by as much as 30 % after

the release of the 2nd quarter results, before recov-

ering some of the losses later in the trading session.

The plunge in the share price was driven by a num-

ber of reasons. Verifone missed the analysts' esti-

mates for the quarter and management also ended

up reducing the revenue estimates for the year to

$2.1 billion, down from the previous range of $2.15

billion to $2.17 billion. Earnings per share estimates

for the full year were also significantly reduced to

$1.85, down from a previous range of $2.21 to $2.24.

The company announced a plan for job cuts, which

could result in cost savings of about $30 million

next year. One of the drivers behind the more pes-

simistic outlook are US certification delays in chip-

enabled equipment, especially for small and

mid-sized companies. Also the persistent struggle

of Verifone to compete in Asia remains a challenge

that analysts continue to point out. Ingenico, Veri-

fone’s biggest competitor in Europe, slipped as

much as 7 % on the back of the Verifone results. ABI

Research estimates that Verifone and Ingenico

accounted for almost 80 % of the global payment

terminal market in 2014.

Another underperformer of 2016 so far is First

Data, which at $11 is down more than 30 % since

the beginning of the year and still significantly below

the IPO price of $16 per share. UK listed WorldPay

was the acceptance stock most heavily impacted by

the initial market decline in the context of the Brexit

vote, while PayPoint, another London listed com-

pany, was the strongest overall performer in the

acceptance bucket over the past three months,

gaining 13 %.

The comparables in the processing bucket increased

figure 1: Indexed stock price performance year to date till July 6th 2016

Acceptance Processing PSP/Online payments Issuing/Prepaid Schemes S&P 500

115

120

110

105

100

95

90

85

80Feb 16 Apr 16Jan 16 Mar 16 May 16 Jun 16 Jul 16

Last 3 months

4

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payments Insight. Opinion.

figure 3: payments universe trading multiples as of July 6th 2016

Acceptance Processing PSP/Online payments Issuing/Prepaid Schemes

Acceptance Processing PSP/Online payments Issuing/Prepaid Schemes

70%

60%

50%

40%

30%

20%

10%

0%

8% 7%

22%

15%

39%

30%

24%

46%

39%

29%25%

37%

63%

figure 2: payments universe operational metrics as of July 6th 2016

Revenue growth CY 14-15 EbItdA margin CY 14 EbItdA margin CY 15

2%

61%

by about 7 % over the last three months (+16 %

year to date). Cielo continued to perform strongly,

gaining about 13 %, while FIS was the strongest per-

forming stock within the category, up by more than

15 % over the same three-month period.

The comparables within the PSP and online pay-

ments category lost about 3 % over the last three

months (-4 % year to date). Wirecard has been

able to further recover losses that resulted from the

accusations of misleading accounting and fraud.

The company has gained about 12 % over the last

three months but is still down 16 % since the begin-

ning of the year. Paysafe took a hit in the context of

the negative market movements following the Brexit

vote, but was able to recover all of those losses by

June 29th.

The comparables of the issuing / prepaid solutions

bucket continued to gain over the past three

months, however, the 2 % increase was substan-

tially below the gains realized previously in the year.

WEX continued to recover losses since the low

point reached in early February, and the company is

up 3 % compared to the beginning of the year.

Green Dot, which is still the best performing stock

since the beginning of the year, gained another 4 %

over the past three months and is now up 43 %

since the start of 2016.

The schemes bucket continued to lose ground over

the past three months, shedding 5 % over the period

and 8 % since the beginning of the year. Master-

Card was the underperformer in this category, los-

ing 8 % over the three-month period, followed by

VISA which lost 5 %. Both companies reacted nega-

tively to the news that a federal appeals court had

thrown out a $7.25 billion antitrust settlement

reached by Visa and MasterCard with millions of

retailers, which had accused both companies of

improperly fixing credit and debit card fees.

0.0x

4.45.5

4.2 4.8

23.2

10.610.0x

20.0x

25.0x

6.74.9 5.3

18.117.916.2

9.8

4.7

12.0

14.8

12.7

16.8

18.9

EV/REV CY 14 EV/REV CY 15 EV/EbItdA CY 14 EV/EbItdA CY 15

15.0x

5.0x

10.1

5

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payments Insight. Opinion.

1%1%6%

30%

49%

13%

16x

14x

2x

12x

10x

8x

6x

4x

The second quarter of 2016 showed a new peak

in terms of the number of M&A transactions

within the payment industry. A total of 70 deals

have been reported with a total disclosed value

of USD 6.1 billion. Among those deals there is

one that stands out: the USD 1.2 billion acquisi-

tion of ISP Processing by private equity owned

ICBPI. Other transactions we look at in this issue

are the acquisitions of Cardtech and ICP Interna-

tional Cash Processing by Concardis and merger

of Payleven and SumUp.

M&A activity and deal characteristics

A total of 70 M&A transactions were announced

in the second quarter of 2016. This represents a

67 % increase over the 42 deals communicated in

the same period of 2015. The financial terms of 17

transactions, with a total volume of USD 6.1 bil-

lion, were disclosed, a 280 % increase compared

to the same period of 2015.

The total disclosed deal value of Q2 2016 was

heavily driven by the acquisition of Setefi Services,

(Setefi Processing) and Intesa Sanpaolo Card (ISP

Card), (together ISP Processing) by Mercury UK

for USD 1.2 billion (18.6 % of disclosed volume).

The underlying enterprise value multiple was 10.6x

EBITDA. Mercury UK is the holding company of

Istituto Centrale delle Banche Popolari Italiane

(ICBPI) and is owned by a consortium of funds

managed by private equity houses Advent Interna-

tional, Bain Capital and Clessidra. Setefi processed

995 million credit card transactions in 2015 worth

a total of USD 78.6 billion. The seller, Intesa San-

paolo, the leading Italian commercial banking

group will record a net capital gain of USD 1 billion

from the transaction and has entered into a 10-year

service contract for using the processing services

of ISP Processing. Via this divestment, Intesa San-

paolo will be able to focus on the core commercial

robert kayser

Senior Associate

apostolos psaras

Associate

philipp steinbrück

Associate

m&a activity

North America Europe Asia

Middle East, Africa (MEA) Australia South America

figure 3: targets by region (funding)

figure 1: m&a market development

disclosed value [USd billion]Number of transactions

acquiring and issuing activities and increase its

business focus on other areas of retail and corpo-

rate banking. For the buyer consortium and ICBPI,

the transaction will allow them to increase scale in

their processing platform and solidify their foot-

hold in the Italian payments market by adding the

largest commercial bank in the country as a

customer.

The median EBITDA multiple from 2015 to 2016

decreased from 13.1x to 10.6x. The median revenue

multiple from 2015 to 2016 decreased from 3.5x to

2.3x. Global Payments’ takeover of Australia’s

leading online payments gateway, eWay, for USD

50 million equates to a multiple of 4.2x revenue.

Ingenico’s acquisition of Nera Payment Solutions

for USD 63 million equates to a multiple of 1.8x rev-

enue or 30.0x EBITDA. Downer Grove’s acquisition

of Wayne Fueling Systems for USD 780 million cor-

responds to a multiple of 1.4x revenue or 9.8x

EBITDA. As seen in the previous quarters, deals

become on average larger and were based on

slightly lower multiples. Investors “adjust” expec-

tations about how disruptive target companies will

change the payment landscape, but there is still an

extensive range of valuations reflecting a broad

maturity.

Geographically, 49 % of the targets were based in

North America (Q1 2015: 54 %), followed by 30 %

in Europe (Q1 2015: 28 %) and 13 % in Asia/Pacific

(Q1 2015: 5 %). German companies were active

both as buyers and targets in Q2 2016 and were

involved in 11 transactions (7 as targets, 6 as buy-

ers). HPE, a Dutch investment firm specialising in

technology companies in Western Europe, acquired

a minority stake in AEVI, the Wincor Nixdorf sub-

sidiary focused on cashless payments, for up to

USD 33.5 million in a capital increase. Wirecard

continued its streak of acquisitions to support its

international growth strategy and bought Citi Pre-

paid Card Services for an undisclosed amount

facilitating the market entry in North America. In

Spain, UK-headquartered Barclays divested its Ibe-

rian Barclaycard credit card operations – acquired

by Spanish online bank bancopopular-e - in a trans-

action valued at USD 326.3 million.

Revenue Multiple EbItdA multiple

figure 2: median enterprise value multiples

9.5

14.5 14.713.1

10.6

3.72.8 3.5

2012 2013 2016Q2

2015

2.3

2015

2016Q2

dis

clos

ed v

alue

[U

Sd b

illio

n]

Num

ber of transactions4

6

8

0

10

20

30

40

60

70

50

02015Q2

2015Q3

2015Q4

2016Q1

2016Q2

42 4210

12

32

2

14.1 31.9

4.76.1

1.6

4649

70

62

2014

6

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payments Insight. Opinion.

Key drivers of and rationale for M&A activity

Generally Q2 has shown again more transactions

in more “traditional” payment segments such as

payments acceptance

devices and software,

processing and money

transfer. Key drivers for

inorganic growth were

increase in scale, a key

success factor for estab-

lished segments of the

payments industries and

improvements in internal

capabilities, either to

acquire technology plat-

forms or expand the

company’s reach to facili-

tate expansion.

Two established segments of the industry, process-

ing and acquiring, experienced a significant amount

of deal activity in Q2 2016. The need to increase

scale and improve product proposition to serve

merchants cross-border, across the entirety of the

payment value-chain and all sales channels (online,

mobile, POS) was a key driver of transactions.

Concardis, one of the leading merchant acquirers

in Germany, has acquired technical network pro-

cessing capabilities through the acquisition of ICP

International Cash

Processing and the

increase of its stake in

Cardtech Card & POS

Service to 70 %, con-

tinuing a strategy of

vertical integration.

The insourcing of

technical network pro-

cessing will allow Con-

cardis to have full

control of its payment

platform to meet

customer demands

and differentiate its

acquiring proposition

(develop cross-border capabilities), eliminate 3rd

party margins by capturing a larger part of the pay-

ments value-chain and ensure long term process-

ing capability by minimising dependency on

processing partners. These acquisitions are

expected to solidify Concardis’ competitive posi-

tioning, create synergies and generate additional

revenues. Within the context of ongoing consoli-

dation in the payments sector and increasing pres-

sure from international acquirers that are able to

serve large retailers as they expand internationally,

Concardis has become the largest individual share-

holder in orderbird, an iPad-based POS system

software provider for the hospitality vertical to

support its international expansion strategy.

Net 1 UEPS Technologies, a leading provider of

alternative payment systems, card processing and

issuing services, has been in the centre of deal

activity both as a buyer and a target. In April, Net 1

acquired a 60 % stake in Masterpayment, a pro-

vider of payment and acquiring services for all

major European debit and credit cards. As part of

the transaction Net 1 will collaborate with Liech-

tenstein-based bank, Bank Frick & Co., for the

deployment of its VCpay, a virtual prepaid Master-

Card, and money remittance services in Europe. A

few days before the end of Q2, Net 1 acquired the

remaining 40 % stake in Masterpayment to facili-

tate its expansion in key markets. During April,

International Finance Corporation (IFC), the private

investment arm of the World Bank Group, acquired

a 20 % stake in Net 1 for USD 107.7 million,

m&a deal activity in the second half of 2016 is expected to

be affected by political, regulatory and economic uncertainty following the outcome of the UK referendum and in the wake of the Us presidential election in november

7

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payments Insight. Opinion.

its largest investment ever in the financial technol-

ogy sector. The acquisition will boost the regional

expansion of Net 1 in African countries with limited

banking infrastructure.

International expansion into the Asian payments

market was the key driver behind the acquisitions

of Lyudia and Nera Payment Solutions by Ingenico.

Through the purchase of 70 % of Lyudia Ingenico

aims to position itself in the Japanese payments

market to capitalise on the EMV transition in Japan,

driven by the Olympic Games in 2020 and the

push towards cashless payments by the govern-

ment. This represents a three million terminal

opportunity according to Ingenico estimates. The

Nera Payment Solutions acquisition for USD 63

million is expected to enable the French payments

company to capture the payments market in Thai-

land, Singapore, Indonesia, the Philippines, Malay-

sia and Vietnam. Finally, Ingenico aims to enhance

its presence in omni-channel payments accep-

tance. Therefore, the company acquired French

start-up Think&Go NFC which enables the interac-

tion of digital displays with connected objects,

such as smartphones, via NFC.

In the payments accep-

tance devices and soft-

ware segment, the need

for scale in the mobile-

point-of-sale (mPOS)

market segment was the

rationale behind the

merger of two leading

European companies in

the space, UK-based

SumUp and Germany-

based Payleven. The

move seems logical, as

players such as Square

and iZettle firm their

market position and enhance their customer reach.

After SumUp retreated from Russia in 2013 and

from Ireland in 2014 after only 18 month of opera-

tions the combined entity will benefit from size.

The combined company will process more than

EUR 1 billion in transaction value across 15 markets

and will leverage the SumUp’s hardware and soft-

ware platform and Payleven’s merchant acquisition

and sales force capabilities. The new entity will be

owned (next to others) by Berlin-based Rocket

Internet and American Express. While the deal is

described as a merger, co-founder of SumUp

Daniel Klein will be the CEO of the new entity

which further will run under the name “SumUp”.

Another mPOS company that engaged in inorganic

growth to consolidate its position in the South-East

Asian market was Softpay mobile, a venture-

backed Singapore-based start-up, which acquired

one of its competitors Vietnam mPOS Technology.

It will be interesting to see if the deal activity

observed in this quarter is the start of ongoing con-

solidation within the mPOS market and how busi-

ness models of disruptive and incumbent players

evolve, especially as more established payment

companies such as WorldPay and Verifone launch

tablet-based integrated POS terminal products

with payment functionality targeting the SME

retailer segment.

The global increase in usage of electronic payment

methods and the proliferation of mobile payments

is prompting companies to engage in mergers and

acquisitions to improve their competencies in new

technologies and expand in new markets. For

instance, Reserve, a digital concierge service pro-

vider for restaurants and customers, acquired

dash, an app allowing

one-tap mobile pay-

ment for diners, to

enhance its payment

capabilities. Further-

more, Upserve a res-

taurant management

assistant technology

provider bought

Breadcrumb, a cloud-

based iPad POS soft-

ware provider, from

eCommerce player

Groupon to create a

full-service cloud-

based software ma-

nagement platform. Alternative payment methods

continue to exhibit momentum, especially in the

carrier billing sub-segment. European provider

DIMOCO acquired Onebip and the premium SMS

division of Hungarian mobile network operator

Telecom New Media to strengthen its position in

the Italian and Hungarian markets, respectively.

Financial details of the deals have not been dis-

closed. UK-based carrier biller Bango bought Bill-

toMobile for USD 3.5 million to fuel its expansion

in the US market by leveraging the relationships of

the acquired company with the four major US

mobile carriers.

M&A deal activity in the second half of 2016 is

expected to be affected by political, regulatory and

economic uncertainty following the outcome of

the UK referendum and in the wake of the US presi-

dential election in November. Global M&A vol-

umes have declined by 20 % compared to the

same period in 2015 according to the Financial

Times, while volumes involving UK targets are

down by 70 %, a trend potentially going to con-

tinue in light of the Brexit. This uncertainty seems

to have also affected payment player’s apatite to

go public. The first half of 2016 was rather quiet

regarding initial public offerings (IPO). Though

only few companies have disclosed details, the

Italian payment processor SIA has announced

plans to be listed on Borsa Italia before the end of

the year 2016. Bain and Advent stated to consider

the IPO of the Nordic payments firm Nets, a deal

that could raise around USD 3.5 billion. In addition,

Alibaba has communicated to consider a listing of

its unit Ant Financial, formerly known as Alipay.

Based on a report by Bloomberg, a potential take-

over of PayPal by MasterCard could be a major

upcoming transaction. Relations between the two

companies are supposed to have become increas-

ingly intensive in recent months. MasterCard

needs to keep fighting up as alternative checkout

platforms such as PayPal draw in customers and

new players enter the space. However, the idea is

not novel – MasterCard queues up with other

potential “dance partners” such as Amex or

Google. Therefore, it will be highly interesting to

observe the payment industry in the second half of

2016 and how players will react in their M&A as

well as IPO activities.

the need to increase scale and improve product

proposition to serve merchants cross-border, across the entirety of thepayment value-chain and all sales channels (online, mobile, pOs) was a key driver of transactions.

8

paGe 1

payments Insight. Opinion.

stefan thomalla

Associate

In the second quarter of 2016, 53 companies raised

USD 4,977 million, of which USD 4,938 million in

equity and USD 39 million in debt financing. This

represents a 10 % increase over the 48 deals

announced in the same period of 2015. However,

the funding volume was highly driven by the USD

4.5 billion funding of Ant Financial Services.

Geographically, 42 %

of the funding targets

(Q2 2015: 23 %) were

based in Europe, with a

disclosed funding

value of USD 218 mil-

lion, followed by 36 %

(Q2 2015: 48 %) in

North and Central

America, accounting

for USD 183 million. Further on, 13 % of the funding

activities were conducted in Asia (7 deals, USD

4,540 million), 4 % in MEA (2 deals, USD 24 mil-

lion), and the remainder in Oceania (2 deal, USD 12

million) and South America (1 deal, USD 0.3

million).

Investment Trends

Regarding the financing rounds, venture and seed

investments were predominant, accounting glob-

ally for more than 40 % of the total financing

rounds. A similar amount of early stage funding

has been registered in Q1 2016 (venture and seed

deals made 46 % of total rounds). In 2015, instead,

venture and seed investments accounted for just a

third of all deals. This implies that investors are

being progressively attracted by new and alterna-

tive investment opportunities while facing low

returns from capital markets. Moreover networks

of accelerators, such as the Global Accelerator

Network, and co-working spaces, very popular

among start-ups, in combination with an increas-

ing number of crowdfunding platforms, make new

investment opportunities more visible.

The highlight of this quarter is the USD 4.5 billion

funding received by Ant Financial Services Group.

This gives the company an estimated valuation at

around USD 60 billion. It has been one of the

world’s largest private fundraising round for a

FinTech.

Ant Financial Services Group, formerly known as

Alipay, is an affiliate company of the Chinese Group

Alibaba. Ant operates the Alipay payment platform

and also runs the Sesame Credit rating system (a

credit scoring system that uses data from Alibaba’s

services to compile its score). Alipay reported

about 450 million active users in 2015 and, accord-

ing to Credit Suisse’s estimates, processed 58 % of

China’s online payment transactions. Moreover,

Alipay is increasingly being used for offline ser-

vices, ranging from

paying for taxi rides to

buying groceries. The

investment was con-

ducted by a mix of

three private and state

Chinese financial insti-

tutions: China Devel-

opment Industrial

Bank, China Invest-

ment Corporation and Primavera Capital Group.

The funding indicates that Chinese investors have

appetite to invest in the country’s national champi-

ons in the Internet sector. Ant Financial plans to use

the funds for expansion in China’s rural-financial

services, investments in domestic IT infrastructure

and overseas acquisitions. In addition, Ant Finan-

cial is planning an initial public offering of its own to

create an even bigger behemoth. The timetable for

the IPO it is still not set, however the company is

paying close attention to the market trends and

policy changes.

In addition, another investment has affected the

Chinese market. Circle Internet Financial landed a

Series D USD 60 million funding round. The financ-

ing was led by existing investment partner IDG

Capital Partners, the prolific Beijing-based VC which

has been behind many prominent consumer inter-

net companies in China and is an influential player in

global Fintech investments. Along with IDG also

Breyer Capital, General Catalyst Partners, Baidu,

CICC ALPHA, China Everbright Limited, Wanxiang

and CreditEase participated in the funding.

Circle allows customers to send money in their

own currency to a recipient in another country,

who can then cash out in their own currency.

venture capital

edoardo cenci

Associate

figure 1: market development – Including both equity and debt funding deals

disclosed value [USd billion]Number of transactions

Europe North America Asia

Middle East, Africa (MEA) Australia South America

figure 2: Investment by region

2015

2016Q2

In the second quarter of 2016, 53 companies raised UsD 4,977

million, of which UsD 4,938 million in equity and UsD 39 million in debt financing

4%

13%

36%

42%

4%

dis

clos

ed v

alue

[U

Sd b

illio

n]

Num

ber of transactions

10

20

40

50

60

30

00

1,000

2,000

3,000

4,000

5,000

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

720463 345 382

4,977

535048

39

48

Other d

C b

A Venture

Seed

2015Q2

2015Q3

2015Q4

2016Q1

2%23%

4%8%13%

23%

10%

19%

26%

8%15%

5%

15%5%

26%33% 34%

21%

23%

13%

13%

9%

17%4%

20%17%

15%

21%

6% 12%

16%

10%6%6% 2%

figure 3: Financing rounds

2016Q2

9

paGe 1

payments Insight. Opinion.

To make the transaction happen, Circle converts

the original currency to bitcoin, moves that

amount along the network to a bitcoin address

affiliated with the recipient, and, if the recipient

prefers not to receive bitcoin, can convert them to

his own currency. Baidu’s investment in Circle

gives the company a stronger foothold in the pay-

ments space. Primarily the founding was aimed to

boost Circle China, an independent company cre-

ated six months ago with local investors in order

to capitalize on a population that is comfortable

with payments made over social media. Circle

China will start competing directly with Tencent

and Alipay once it obtains regulatory approval

and finds banking partners. However, the invest-

ment will also allow the launch of Circle Euro,

which will start from targeting Spanish consum-

ers as the first part of a broader Europe-wide roll-

out planned for the coming month.

A considerable change in its funding strategy has

been conducted by Klarna, the Swedish e-com-

merce payment solutions provider for merchants

and shoppers. The company approached for the

first time in its history debt markets issuing sub-

ordinated notes totalling approximately USD 32

million. The move comes as other technology

firms are also opting for debt rather than equity to

raise fresh funds. Klarna, which handles about

10 % of all online transactions in Europe and

launched last year in the United States, on online

payments giant PayPal's home turf, said the

10-year notes have a floating rate, and that notes

were allocated to a limited number of large

Nordic investors. The company opted for debt

financing to boost growth but also to diversify

its funding sources.

Based on an equity

financing round at the

end of last year, Klarna

had a USD 2.25 billion

valuation after Swe-

dish insurer Skandia

bought a 1 % stake.

Transferwise, the Lon-

don-based money transfer start-up, closed a USD

26 million series D. Through this funding, Transfer-

wise reached a valuation of approximately USD 1.1

billion, making it become part of the so-called ‘uni-

corn’ club (companies valuated more than USD 1

billion). The financing round was led by investment

management firm Baillie Gifford, with participation

from existing investors such as Andreessen

Horowitz. The funding will be used to improve the

loss-making start-up’s balance sheet as it contin-

ues to plough all revenue into future growth.

From a German perspective, Orderbird, an iPad

point of sale (POS) solution, has closed a remark-

able USD 22.8 million Series C equity funding.

Leading the round has

been Digital+ Part-

ners, along with stra-

tegic investor Metro

Group, who com-

bined, have invested

USD 18.8 million. The

investment from pub-

licly-listed Metro fits

with the overall mis-

sion of the group to digitise the restaurant and

catering industry. Previous backer, the European

payment provider Concardis, has also partici-

pated in this round, but via a secondary listing.

Orderbird plans to use the new capital for product

development and further expansion in Europe,

including a market entry in France later this year.

Regarding an outlook for the second half of 2016,

we assume from a regional perspective, that the

head-to-head race between Europe and North &

Central America will continue. Nevertheless, the

Asian market is very likely to increase its expo-

sure to new investors. This is because of multiple

factors:

1) The "noise" created by the Ant funding and the

striking expansion of Alipay

2) The uncertainty created among economic and

financial business after the UK referendum

3) The uncertainty of the presidential election in

the USA

According to editors from Amercian Inc. maga-

zine, two of the most popular venture capitalists,

Andreessen Horowitz and Google Ventures, will

neglect investments in early stage deals onwards.

Taking this into account combined with the actual

growing number of venture and seed investments

in the first half of the year, we suppose that the

competition among start-ups seeking for early

stage but attractive funding will rise on the one

hand. On the other hand, a couple of very large

deals in senior financing rounds are expected to

take place in the upcoming quarter(s).

Regarding the financing rounds, venture and seed investments were

predominant, accounting globally for more than 40 % of the total financing rounds

10

paGe 1

payments Insight. Opinion.

Date Announced

Target Company Country TC Industry Buyer(s) (Country) Country Transaction value (USDm)

1 01/04/16 Phone Pe India Provides mobile payments application for money transfer, bill and merchant payments

Flipkart India N/D

2 01/04/16 Verian USA Provides Purchase-to-Pay solutions Basware Finland 36

3 04/04/16 dash USA Provides app enabling one tap payments at selected restaurants

Reserve USA N/D

4 04/04/16 REV Ventures (Reevex) USA Provides solutions and kiosks for bill payment, self service banking and money handling

Glory Global Solutions United Kingdom

N/D

5 04/04/16 API Holographics United Kingdom

Provides optical security solutions to protect secure documents

OpSec Security Germany N/D

6 04/04/16 Masterpayment Germany Provides online payment processing services Net 1 UEPS Technologies South Africa N/D

7 05/04/16 Cardtek Turkey Provides payment processing, card and fraud management, and card personalisation solutions

MV Holding / Revo Capital Turkey / Netherlands

N/D

8 07/04/16 GiftCard Zen USA Operates as a digital coupon marketplace RetailMeNot USA 22

9 11/04/16 eWay Australia Provides Australia's leading payment gateway Global Payments USA 50

10 11/04/16 Think&Go NFC France Provides technology enabling any kind of digital display to interact with connected objects such as smartphones and transit passes

Ingenico  France N/D

11 11/04/16 Net 1 UEPS Technologies South Africa Provides alternative payment systems that leverage its Universal Electronic Payment System ("UEPS") or utilize its proprietary mobile technologies

IFC USA 107.7

12 11/04/16 Seamless Distribution Sweden Software development company providing mobile money, VAS, prepaid top up, and managed operations technology solutions to mobile operators, banks, retailers, and distributors worldwide

Tikvah Management USA N/D

13 12/04/16 Vault Payments Group  USA Provides electronic payment processing solutions Electronic Payments  USA N/D

14 13/04/16 Kit CRM USA Provides advertising and marketing services Shopify USA N/D

15 14/04/16 RideScout  USA Provides app aggregating public, private and social rideshare on its free iOS and Android apps, allowing on demand and real time search and comparison of transportation options

moovel Group Germany N/D

16 14/04/16 GlobeSherpa USA Provides mobile payments and ticketing for transit, parking, events and local destinations

moovel Group Germany N/D

17 18/04/16 PowaPOS United Kingdom

Provides bills payment services SuperCom Israel N/D

18 18/04/16 Zomaron Canada Provides credit and debit card processing solutions Zomaron Management Canada N/D

19 19/04/16 MyPoints,com USA Provides marketing and online advertising services Prodege USA N/D

20 19/04/16 SkyHill Software USA Provides payment software solutions i3 Verticals USA N/D

21 19/04/16 Esber Cash Register USA Provides school systems with a cost-effective method to host an online payment program

i3 Verticals USA N/D

22 19/04/16 Ebay Enterprises USA Helps retailers strengthen their online presence and e-commerce capabilities

Innotrac USA N/D

23 20/04/16 Vietnam MPOS Technology JSC Vietnam Provides mobile point of sale solution and payment facilitator SoftPay Mobile International Singapore N/D

24 22/04/16 Elavon do Brasil Brazil Provides card payment processing services Stone Pagamentos SA Brazil 83.4

25 26/04/16 Lyudia Japan Manufactures, designs, and distributes electronic transaction terminals, systems, and related products for electronic payment transactions

Ingenico  France 5,622

26 27/04/16 payleven Germany Provides mobile point of sale solution and payment facilitator

SumUp United Kingdom

N/D

27 28/04/16 Barclaycard (consumer payments business in Spain and Portugal)

United Kingdom

Provides credit card services Bancopopular-e Spain 326.3

m&a deal activity Q2 2016

11

paGe 1

payments Insight. Opinion.

Date Announced

Target Company Country TC Industry Buyer(s) (Country) Country Transaction value (USDm)

28 28/04/16 Chase (off-premise ATMs) USA Provides consumer and commercial banking services Cardtronics USA N/D

29 02/05/16 ICP International Cash Processing Germany Provides cashless payment services Concardis Germany N/D

30 02/05/16 Cardtech Card & POS Service Germany Operates as an electronic cash network provider Concardis Germany N/D

31 02/05/16  Payprotec Oregon USA Sells credit card transaction terminals Chyp USA N/D

32 03/05/16 Setefi Services S.p.A and Intesa Sanpaolo Card d.o.o. (ISP Processing)

Italy Provides electronic payment management services Advent, Bain Capital and Clessidra USA, USA and Italy

1,200

33 06/05/16 JDA (store point-of-sale, Win/DSS point-of-sale and CRM)

USA Provides integrated enterprise-wide software products Veras Retail USA N/D

34 06/05/16 Jumio USA Provides image recognition technology services Centana Growth Partners USA N/D

35 09/05/16 Breadcrumb POS USA Provides Software-as-a-Service applications Upserve USA N/D

36 10/05/16 BilltoMobile USA Provides mobile business services (carrier billing) Bango USA 3.5

37 10/05/16 National ATM Systems USA Sells and services ATMs Private individual USA N/D

38 10/05/16 Celery USA Provides an e-commerce application programming interface for developers

Indiegogo USA N/D

39 11/05/16 AEVI Germany Provides gateway for payment transactions HPE Growth Capital Netherlands 33.52

40 13/05/16  GoGORILLA Singapore Develops mobile messaging and payment transaction hubs Sandpiper Digital Payments Switzerland N/D

41 12/05/16 Onebip Italy Provides cashless payment systems and services DIMOCO Austria N/D

42 16/05/16 Infoscreen Cyprus Develops software for management solution Microgen United Kingdom

2,03

43 18/05/16 Xanthium Integrated Solutions South Africa Provides cards and personalisation services to banks, retailers and third party payment processors

Oberthur Technologies France N/D

44 19/05/16 Prabhu Money Transfer Malaysia Provides international remittance services Telenor Group Norway N/D

45 19/05/16 INSIDE Secure (secure IoT and semiconductor business)

France Provides integrated circuit solutions WISeKey International Holding Switzerland N/D

46 19/05/16  Nera Payment Solutions Singapore Engages in distribution and maintenance of point-of-sales payment terminals and electronic payment solutions to the banking, financial services and retail industries

Ingenico  France 63

47 19/05/16 Coin (payment assets) USA Operates as a consumer electronics and financial technology company

Fitbit USA N/D

48 19/05/16 StoreFinancial USA Operates as a international payment processing company Emerchants Payment Solutions Australia 35

49 31/05/16 Prism Money USA Provides online bill payment services PayNearMe USA N/D

50 31/05/16 Sequoia Retail Systems USA Provides colleges with POS, retail bookstore and inventory management solutions

Blackboard USA N/D

51 01/06/16 Axia Payments USA Provides electronic payment processing services to government and non-profit organizations

i3 Verticals USA N/D

52 02/06/16 FIME France Provides testing services for cards and terminals Chequers Capital France N/D

53 02/06/16 Demandware  USA Provides cloud-based digital commerce solutions for retailers and branded manufacturers

Salesforce USA 2.920

54 05/06/16 Groupon Indonesia Indonesia Owns and operates a website providing information on discounted products and services

KFit  Malaysia N/D

55 06/06/2016  AssureTec Technologies USA Provides identity document authentication and data capture solutions

Acuant USA N/D

12

paGe 1

payments Insight. Opinion.

Date Announced

Target Company Country TC Industry Buyer(s) (Country) Country Transaction value (USDm)

56 06/06/16 Nettcash Zimbabwe Provides mobile money financial services Brainworks Capital Management Zimbabwe N/D

57 09/06/16 Canaan Creative China Designs and develops application-specific integrated circuit for Bitcoin mining

Shandong Luyitong China 466

58 09/06/16 Wayne Fueling Systems USA Provides fuel dispensing, payment, systems and aftermarket services for retail and commercial fuel stations

Downers Grove USA 780

59 13/06/16 TSYS Managed Services EMEA joint venture

United Kingdom

Specializes in customer-servicing operations TSYS USA N/D

60 15/06/16 XBT Provider Sweden Provides bitcoin exchange services Global Advisors  Jersey N/D

61 17/06/16 Masterpayment Germany Provides online payment processing services Net1 South Africa N/D

62 20/06/16 eSupply  USA Operates an e-procurement and spend management platform for the multi-family industry

RealPage USA 7.1

63 20/06/16 Pandora Venture Capital Corp,'s Product and Technology Businesses

USA Provides digital currency, proprietary Blockchain technologies, and digital currency exchange

WRIT Media Group USA N/D

64 20/06/16  Ascend Money Thailand Provides online payment services Ant Financial China N/D

65 23/06/16 Sharp BancSystems USA Provides software solutions for banking sector Nymbus USA N/D

66 28/06/16 Clevercoin Netherlands Provides bitcoin exchange services Kraken USA N/D

67 28/06/16 Telecom New Media (Premium SMS and Payments business)

Hungary Carrier billing division of Telecom New Media DIMOCO Austria N/D

68 28/06/16  InterCard Germany Provides multifunctional card systems for universities, institutions of higher education, and other educational institutions in Germany

Sandpiper Digital Payments Switzerland N/D

69 29/06/16 Citi Prepaid Card Services USA Supports launch and management of over 2,500 prepaid card programmes for brands and companies globally

Wirecard Germany N/D

70 30/06/16 Payvector United Kingdom

Provides online payment gateway, virtual terminal, e-invoicing, merchant account and white-label service provider

ai Corporation United Kingdom

N/D

13

paGe 1

payments Insight. Opinion.

Target (Country) Round Volume (USDm)

Investor(s) Funding (USDm)

Description

1 Bitt A 4.00 Overstock 5.50 Bitt is a Caribbean based digital asset exchange whose core focus is on providing access to cryptocurrencies in emerging markets

2 LevelUp Venture 5.00 N/D 45.00 LevelUp is an American mobile payment platform that lets users accept mobile payments and engage with customers through loyalty programs

3 Bitwala Seed 0.91 Digital Currency Group 0.91 Bitwala allows customers to pay in bitcoin for anything that requires a euro bank transfer

4 Vindi A 0.33 Bozano Investimentos 0.82 Vindi is a online payment platform (PCI certified) focused in subscription and recurring billing in Brazil

5 Sphere Seed 0.25 Start Global ventures 0.25 Sphere is a provider of both hardware and software for a POS integration system based on a so called built-in waiter app

6 Tiller Systems B 4.55 360 Capital Partners 4.66 Tiller Systems provides POS software solutions for restaurants and merchants

7 Tokken Debt 0.25 N/D N/D Tokken offers banking and payment processing services to cash-intensive businesses (currently focusing on the legal cannabis industry)

8 Cardtek Venture N/D MV Holding N/D Cardtek provides payment security hardware as well as processing services to end-to-end mobile payment solutions

9 IXARIS Venture 6.00 N/D 6.00 Ixaris Systems is a provider of company payment solutions and payment apps based on open-loop prepaid card schemes

10 Viewpost Debt 5.13 N/D 59.60 Viewpost offers a secure B2B network for electronic invoicing, payments and real-time cash management

11 Viva Republica A 23.00 Goodwater Capital 24.00 Viva Republica is a fintech startup to provide innovative P2P money transfer services through mobile applicaion called "Toss"

12 Plastiq Venture 2.85 N/D 21.20 Plastiq empowers clients to do credit and debit card payments toward bills including tuition, taxes, utilities and rent

13 Wolt B 12.40 EQT Ventures 26.05 Wolt is a provider of a mobile payments app for making and paying restaurant and cafeteria orders

14 ClassWallet Venture 1.50 Idea Bulb Ventures 4.04 ClassWallet offers payments with a reloadable virtual wallet to school teachers

15 Transactis E 30.00 Capital One, Fifth Third Bancorp, PNC Bank, Safeguard Scientifics, TD Bank, Wells fargo & Company

66.70 Provides white-label SaaS solution to enable merchants to accept online payments

16 Codipark Seed 0.50 N/D 0.79 CodiPark offers an app to do mobile payments after scanning a parking ticket

17 Forter C 32.00 Scale Venture Partners 50.00 Fully is a provider of a fraud prevention system, that is backed by a 100% chargeback guarantee for e-commerce enterprises

18 ANT Financial B 4,500.00 China Development Industrial Bank, China Investment Corporation, Primavera Capital Group

4,500.00 ANT Financial is the online payment services division of Alipay

19 PoshBerry Seed 0.25 Rhodivm Capital VC 0.25 PoshBerry is a provider of a Blockchain based loyalty wallet ecosystem

20 T2P (iBaht) Venture 1.10 500 Startups 1.10 Thailand based T2P offers an e-wallet app called DeepPocket

21 Zooz C 24.00 Target Global 40.50 Zooz provides a payments platform enabling enterprise merchants to connect with multiple payment and technology providers and route payment transactions

22 MobiKwik C 15.00 Global Payment Fund 86.85 MobiKwik is a provider of a mobile wallet app, that enables clients to do mobile payments and P2P money transfers

23 Passport B 8.00 MK Capital 15.54 Passport offers a solution to government, universities and private operators for the purpose of accepting payments for parking and transportation

24 EPG (Easy Payment Gateway)

A N/D Clearhaus 1.80 EPG (Easy Payment Gateway) provides online payment gateway for 200 different online payment methods and worldwide acquirers

25 Paylike N/D N/D Clearhaus N/D Paylike is a provider of payments acceptance with Visa and MasterCard for multiple devices and in 47 currencies

26 Digitzs Seed 0.50 N/D 2.55 Digitzs provides ticket payments for sporting events, donation payments for non profits and rent payments for property managers

27 Hishab Seed N/D IMJ Investment Partners Pte. Ltd N/D Hishab is a provider of a biometric ERP solution for the purpose of receiving and processing voice based data

venture capital activity Q2 2016

14

paGe 1

payments Insight. Opinion.

Target (Country) Round Volume (USDm)

Investor(s) Funding (USDm)

Description

28 Fluent Seed 1.65 ff Venture Capital 2.50 Fluent is a provider of Blockchain based technology, that enables bank and retail payments

29 AEVI B 22.80 HPE Growth Capital 22.80 AEVI offers cross-border payments, value-added services and B2B apps

30 Orderbird C 22.80 Digital + Partners 37.04 Orderbird AG is a provider of an iPad POS system, that facilitates reporting functions in the hospitality industry

31 Fattmerchant Venture 1.40 Central Florida, Florida Angel Nexus, Phil Rawlins, venVelo, Wet Paint Ventures, Wet Pant Capital LLC

2.25 Fattmerchant provides online payment credit card processing for both POS and mPOS

32 StoreHub Seed 0.85 500 Startups 0.85 StoreHub provides an iPad POSpayment solution in Malaysia with inventory management and reporting accessed via a mobile responsive backend

33 AccessPay Debt 1.45 Barclays N/D Accesspay is a payment software provider, that provides cloud based payment solutions and cash management products such as Direct Debit software, SEPA, Faster Payments, SWIFT and Multi-Bank Cash Management

34 TwoWayPay Angel N/D N/D N/D TwoWayPay offers a P2P payments platform without transferring financial information

35 Hey You B 2.00 Exto Partners Pty Ltd 7.00 Hey You is a provider of a mobile payment app, that enables clients to make payments at cafes, restaurants and bars

36 TableSafe Debt 0.51 N/D 18.96 TableSafe provides restaurants with at-the-table payment technology

37 Tally A 15.00 Shasta Ventures 15.00 Tally is a provider of a solution for credit cards payments and management

38 BitOasis Seed N/D Wamda Capital N/D BitOasis is provides digital payment products using bitcoin technology

39 Transferwise D 26.00 Baillie Gifford 116.37 TransferWise offers online money transfer and remittance services with real time foreign exchange rates

40 Dashlane C 22.50 TransUnion 52.50 Dashlane provides a password manager and secure digital wallet for the whole process of registering, logging in and checking out on websites

41 Pleo Seed 0.56 Speedinvest 0.56 Denmark based Pleo offers smart payment cards for employees enabling them to buy the things they need for work

42 Featurespace Venture 9.00 TTV Capital 16.37 UK based Featurespace is a provider of analytic technology for the purpose of fraud-prevention

43 Payveris Venture 7.50 Mosaik Partners 14.15 Payveris provides a digital payments platform and money transfer services including electronic bill payments, presentment and management, P2P transfers

44 Satago Venture 2.32 ESF Capital 3.37 Satago provides financial software to small businesses for the purpose of cashflow improvement

45 Muume Venture 2.27 Heliad Equity Partners 2.27 MUUME is a payment service provider with functionality in the area of loyalty, couponing, gamification

46 Tapp Commerce A 9.00 N/D 9.00 Tapp is the alternative payment solution allowing people to convert cash to digital credits that can be used in Tapp's marketplace and building P2P commerce exchange network

47 PromisePay A 10.00 Carsales 12.25 PromisePay is a payment service provider for companies which seek to outsource the entire payment process

48 Plaid B 44.00 Goldman Sachs 59.30 Plaid is an API to power developers of financial services applications and help them connect with user bank accounts

50 Loot Venture 2.17 Global Founders Capital 2.17 Loot provides a banking (via pre-paid Visa card) and money management app for students

51 Sezzle Seed 0.50 N/D 0.50 Sezzle is a provider of a payment platform to merchants, with an 1% cash back rewards when using Sezzle's solution

52 Circle D 60.00 IDG Capital Partners 136.00 Circle provides online and in-person payments with secure global digital money transfers

53 TransferGo A 3.40 Vostok Emerging Finance 6.11 TransferGo offers online money transfer to send money abroad for migrants and businesses

54 Klarna Debt 32.20 N/D 291.33 Klarna provides e-commerce payment solutions for merchants and shoppers

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payments Insight. Opinion.

disclaimer

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about innovalue

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the payments industry, through extensive international project experience, methodologies and the use of very current and pertinent data and benchmarks.

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