Adyen Exceeds Profit Expectations with Strategic Expansion
Hey Payments Fanatic!
Payments giant Adyen has outperformed expectations with a 32% rise in core profit to €423.1 million for the first half of 2024, surpassing analysts' forecasts of €413.39 million.
This strong performance, driven by market share gains and slower hiring, boosted Adyen's shares by 12%, adding €4.3 billion to its market value, now totaling €39.6 billion.
Adyen’s growth is primarily fueled by expanding services to existing clients, including major partnerships with Cash App and Shopify. Despite the broader digital payments sector facing post-pandemic challenges, Adyen’s strategic moves in the Europe, Middle East, Africa (EMEA) region, and North America, where it has single-digit market shares, offer significant room for growth.
Revenue increased by 24% to €913.4 million, with the EBITDA margin rising to 46% from 43%. Adyen confirmed its 2024 and 2026 guidance and highlighted its expansion into India, where it has been authorized to operate as an Online Payment Aggregator.
The company is also launching a technology hub in Bengaluru, aimed at enhancing local payment processing capabilities. This hub will enable Adyen to optimize transactions for merchants in India and tap into the country's burgeoning e-commerce market, which is rapidly moving towards digital payments.
By building out its infrastructure and tapping into local talent, Adyen is positioning itself to become a key player in India’s evolving digital landscape.
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🇺🇸 Zip announces strategic partnership with Stripe in the U.S. to accelerate market growth. With the new integration, eligible merchants can easily enable Zip as a payment method with a single click, which can help attract new customers and increase both conversion rates and basket sizes.
🇺🇸 FIS® announced that it is unlocking the Neural Payments solution to its clients, expanding the availability of peer-to-peer (P2P) payments by leveraging the company’s global scale and NYCE debit rails to bring this capability to a wider range of institutions.
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GOLDEN NUGGET
Blockchain-enabled Payments can revolutionize the global payments industry with faster and cheaper payments👇
The next wave of disruption in payments is tied to technology and the #blockchain is a pretty fascinating one. Most people only associate it with crypto. The blockchain is the underlying technology of cryptocurrencies, the actual gem.
Until recently, payments have been enabled through the traditional model by those 6 main players:
👉 Issuers - Wells Fargo, Citi
👉 Acquirers - Nuvei, Adyen, Checkout.com
👉 Card Schemes - Visa, Mastercard
👉 Payment Orchestration - Spreedly, Gr4vy, Inc 👉 Payment Methods (#APMs) - Klarna, Alipay, Accrue Savings, Trustly
👉 Token Vaults - VGS, Basis Theory
This complex model creates various points of failure, an expensive process, friction and less transparency, especially in cross-border transactions.
Digital currencies and #CBDCs are gaining momentum and rising to the top of the agenda for innovative PSPs that are looking for #regulated, fast and global alternatives.
As a result, more payments and cryptocurrency ecosystem providers are entering the market:
👉 Global Cryptocurrency Market Cap: $2.56
👉 Bitcoin Market Cap: $1.26T.
What to know:
🔸Major blockchain and #cryptocurrency infrastructure providers are expanding into payments. Binance launched a payments technology company, Bifinity to enable fiat-crypto payments.
🔸Traditional payments companies have also entered the crypto market. Consumers can now make payments with cryptocurrencies linked to Visa and Mastercard cards. PSPs - Nuvei, Stripe, PayPal - can transfer, receive and send cryptocurrencies - Pay With Crypto, powered by organizations like Zero Hash.
Here are the major benefits to use the blockchain for Global Payments:
✅ Immediate
✅ Cheap
✅ Global reach
✅ Settled in a secure settlement medium
✅ Data Enrichment
✅ Lower Risk (Higher Acceptance)
✅ Interoperability (Open Loop)
There is also a need to address to concerns to keep increasing adoption:
❌ Regulations
❌ Liability
❌ Trust
Overall, stablecoins and crypto payments powered by Zero Hash, Mural and others have the potential to disrupt the industry, starting with those uses cases:
🔸Global Remittances
🔸eCommerce Transactions
🔸Subscription-based Payments 🔸MicroPayments
🔸Hedging against currency devaluation
🔸Capital efficiency in Trading
👉 Financial Inclusion
Other forces are also reshaping the payments industry:
🔸Real Time Payments Rails
🔸Open Banking
🔸Buy Now Pay Later
🔸Digital Wallets & Super Apps
🔸Embedded Payments
🔸Digital Currencies and CBDCs
Technology is driving & disrupting payments! The rise of digital currencies, Bitcoin Halving & the AI boom are making it happen.
Source: EY's report - How the rise of PayTech is reshaping the payment landscape
And I highly recommend following my partner at Connecting the dots in payments... Arthur Bedel 💳 ♻️ for more great updates like this one👌
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