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9
Operation and financial review
Overview
80
Worldline
2016 Registration Document
Overview
9.1
Introduction
9.1.1
The activities of the Group are presented in Section 6.5 of the Registration Document.
Principal Factors Affecting the Group’s Revenue and Profitability
9.1.2
Payment Services Industry
9.1.2.1
Dynamics
The payment services industry is currently undergoing a period
payment services industry can have a significant impact on the
underlying performance of the Group’s business. As further
of significant change in response to changing consumer habits,
new technology and regulatory developments. Trends in the
described in Section 6.2, key trends include the following:
substantial portion of its revenue from the processing of
payment transactions charged primarily on either a per
Transaction Volume Growth.
The Group generates a
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significantly as consumers gradually shift from cash to
non-cash payments, driven by a number of factors including
transaction or volume basis (based on a percentage of
transaction value). These kinds of transactions are growing
transactions using mobile devices, government initiatives to
increased acceptance of non-cash payments by merchants
in stores, growth in e-Commerce transactions and
European Union grew at a compound annual growth rate of
6% over the past 10 years. A.T.
Kearney forecasts that the
encourage non-cash payments and other factors.
A.T.
Kearney estimates that non-cash transactions in the
Market Overview” of this Registration Document;
CAGR will grow to 7% between 2020 and 2015 to reach
238
billion transactions. See Section
6.2, “Industry and
periods and expects pricing pressure from banks to
continue to increase due to the changes to interchange fees.
fees. The Group has experienced pricing pressure in recent
See Section
6.9, “Regulation” and Section
6.2, “Industry and
Market Overview”;
clients and consumer behavior. The Group believes that the
reduction in interchange fees will progressively encourage
transactions. In addition, the Group believes that issuing
banks, which will see the amount of revenue they receive
more merchants to accept credit and debit cards for small
payments, thus driving additional growth in the number of
costs. They will also seek to add new value added services
to generate new fees to offset the reduction in interchange
from interchange decrease, will increasingly consider
outsourcing their payment processing services to reduce
access European markets other than those of the
Commercial Acquiring activities. Because the Group records
its revenue net of interchange fees paid to issuing banks,
originating member state in which they have a license
(Visa/MasterCard) to issue payment cards or undertake
indirect rather than direct. In the medium to long term the
impact of these changes on the Group’s revenue will be
and does not itself act as an issuing bank, the effects of the
reduction of interchange fees on the Group’s revenue will be
driven by their effects on the Group’s merchant and banking
Regulatory changes.
Recent regulatory changes in Europe
●
have significantly decreased interchange fees and are
expected to increase the ability of payment institutions to
Technology changes.
Mobility and big data technology are
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creating new payment methods and new business models.
hub services (such as the integrated WIPE platform the
These developments have the potential to drive additional
growth in transaction numbers. Similarly, payment service
payment methods and models, which may create new
outsourcing opportunities from banks whose near-term
Group is developing) are becoming more and more
important in order to adapt existing systems to new
transaction volume is not sufficient to support investment in
redesigning their own systems;
electronic payments that the Group believes will generate
traditional credit card interchange fee system, they may also
lead to further pressure on prices, which may in turn further
increased transaction volumes. Because these new services
offer opportunities for fee structures that differ from the
outweighs the effect of any associated price decreases;
fuel volume growth. The net impact on the Group will
depend on whether the effect of increased volume
Emergence of new electronic payment methods.
New
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electronic payment methods such as Online Banking
enabled Payments (OBeP) and person-to-person electronic
wallets are creating new non-card based methods for