This week: Amex, FIS, Fiserv, Global Payments, MoneyGram, PayU, PayPal, Payconiq, Post Offices, Western Union
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New data, new insights on cross-border payments. Every week.

The strategies behind the consolidation

Politics aside this week (welcome Boris!), we're taking a look at what is driving M&A in the sector. Western Union won the Post Office (UK) digital partnership, and we analyse the reach of post office payments partnerships worldwide.

Following our piece on recent stock market performance of the publicly listed players last week, we begin our analysis of earnings season with the second quarter numbers from PayPal. To M&A...

Year to date, we've seen a mix of the mega-deals which are vertically integrating and gaining scale (the three at the top of the chart), down to much smaller strategic plays and geographic market entry plays.

The wave of consolidation over the past few months has also seen a range of companies looking to add new technologies, products and services to boost their existing portfolios (i.e. Remitly & Symphoni, Ant Financial & WorldFirst, Mastercard & Transfast).

Our recent deal analysis:

We expect consolidation to continue in the sector but at a slower pace amongst cross-border companies compared to the large payment processors. Cross-border remains highly fragmented with the majority of ownership still in private hands.  
Track the cross-border payment industry

The power of the post office

In many countries, post offices still have substantial reach and are household brands. They offer a range of financial services, are trusted and are able to handle cash.

In the UK, Western Union this past week announced it had won the Post Office digital relationship taking over from Moneycorp. Given the prominence of post offices, we would expect to continue to see a mix of splitting of cash and digital partnerships (the UK), and fully exclusive deals. 

As the world becomes more digital and bank branches decline, post offices remain an important set of physical locations and a gateway to remittances.

Big Post Office partners make our Top 100 Cross-Border list?

PayPal's cross-border growth continues

PayPal released its Q2 results yesterday evening and the topline numbers continue to look strong for cross-border although the share of cross-border volume relative to all of PayPal's payment volumes remain in decline.

This decline has been driven by a strengthening U.S. dollar, a reduction in eBay marketplaces volume and relatively stronger growth in PayPal's Braintree and Venmo product lines.

Key numbers from the earnings release:
  • PayPal added a net 41 million new users over the past 12 months moving it to 286 million active user accounts in total.
  • Venmo’s push continues with 70% growth in total payment volume to $24 billion.
  • We've also previously covered Xoom's  expansion to 32 new send markets throughout Europe.
Q3 revenue forecasts were cut hitting PayPal's stock price by c.6% overnight, although year to date PayPal's stock has performed very strongly up 44% in 2019. And clearly it remains a formidable cross-border competitor.

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On our radar this week:
Curated by FXC Intelligence's Team 
Amex agrees forex payout

$1.6m refunded to customers and staff changes allow Amex to move on
Wall Street Journal
Cross-border wallet startups

Bank-backed cross-border wallet Payconiq raises EUR20 million
MoneyGram's Korean push

The incumbent partners with South Korean startup Sentbe
TransferWise beefs up its board

Adding the Adyen CFO and former Netflix CFO to its board

Missed the last few weeks?

Has Remitly succeeded? (here)
The need for speed in cross-border payments (here)
What is driving valuations in the sector and who are the hot IPOs? (here)
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Stay cool this week in the heat,

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