In this featured article, our Director of Product Marketing, Steve Gilde, highlights the most noteworthy activity in the payments landscape last year and predictions for this year.
Scale has always been important in payments and financial services, so seeing the big players get bigger is really not a surprise. What is interesting to note here is that most of the big deals from the past year are about more than simply processing more transactions.
It would certainly be an understatement to say “a lot happened” in 2019. The year started off with a bang when Fiserv announced that it would be acquiring First Data for $22 billion. That transaction only set the stage for other payment processor mega deals, including the FIS acquisition of Worldpay for more than $33 billion and the “merger” of Global Payments and TSYS - in a deal valued at “only” $21.5 billion.
In other significant M&A activity, Mastercard acquired a chunk of Nets ($3.2 billion) and, in the biggest deal involving U.S. banks in more than 10 years, BB&T acquired SunTrust for nearly $30 billion to become the sixth largest bank in the country.
These deals are about adding people, products and services in order to offer a more comprehensive, end-to-end portfolio to their clients. This trend is likely to continue as organizations do everything they can to stay relevant and competitive in the very dynamic world of payments.
But just as the industry consolidates, it is also expanding. We will continue to see new fintech startups introduce innovative ideas and offerings, including alternative payment types, that will appeal to different consumer and business segments. There is clearly a lot of VC money still available to fund these innovators and disrupters, many of whom will eventually be acquired by some of the major players listed above.