Data Dive

Data Dive, Better Together Edition: Worldpay, FIS, Google, eBay, PayPal, Instagram

Data Dive: Worldpay, Google, eBay, PayPal

While the competition part of the story is usually where the action is in payments and commerce  – who’s ahead, who’s behind, who’s innovating, who’s imitating – sometimes the news isn’t about who is getting ahead, but who is working harder to get there.

This week, the theme of the news was all about collaboration, with big mergers, big partnership agreements and a new move for eBay. So why is everyone suddenly working so hard to play well with others?

Worldpay’s Big Week

Merchant services firm Worldpay had a really big week in pair-ups, with not one, but two headline snatchers.

The top line, of course, was the announcement that FIS would acquire Worldpay in a deal worth roughly $35 billion. Once closed, the conjoined firm will offer enterprise banking, payments, capital markets and global eCommerce services to financial institutions and businesses around the world.

“Scale matters in our rapidly changing industry,” stated Gary Norcross, chairman, president and chief executive officer of FIS, in the press release. “Upon closing later this year, our two powerhouse organizations will combine forces to offer a customer-driven combination of scale, global presence and the industry’s broadest range of global financial solutions. As a combined organization, we will bring the most modern solutions targeted at the highest-growth markets. The long-term value we will create for clients and for shareholders will set the bar in our industry and will create a range of new career opportunities for our employees. I have never been more excited about the future of FIS.”

At the conclusion of the deal, FIS shareholders will own around 53 percent of the company, while Worldpay shareholders will own about 47 percent. The deal values Worldpay at about $43 billion, including the assumption of Worldpay, debt that FIS said it plans to refinance. Worldpay processes more than 40 billion transactions each year and supports more than 300 payment types in more than 120 currencies.

“At Worldpay, our focus has always been on delivering more value to our clients and partners and making decisions that achieve our growth and performance objectives,” said Charles Drucker, executive chairman and CEO of Worldpay, in the same press release. “Combining with FIS helps us accelerate the achievement of that, now benefiting from new scale and capabilities that will truly differentiate the company globally. We are proud to become part of one of the financial services industry’s most respected and consistently performing companies, and I am excited about the new opportunities this brings both for the business and our colleagues worldwide.”

Once the deal is closed, the new 12-member board will have seven members coming from FIS and five from Worldpay. Norcross will remain as FIS’ chairman of the board, president and chief executive officer, while Drucker will serve as the executive vice chairman of the board. The combined company will retain the FIS name and will be headquartered in Jacksonville, Florida.

And while that alone would have been sufficient to win the big partnership announcements race last week, Worldpay actually doubled up, following the news of the FIS merger with an announcement of a new partnership with Amazon, which would see Amazon Pay rolled out as an easy-access payment option for all of Worldpay’s U.S. merchant customers.

The move to partner with Worldpay, as Amazon Pay VP Patrick Gauthier told Karen Webster, was inspired by Amazon’s desire to continue expanding Amazon Pay’s reach to larger merchants as part of its natural evolution – which led the company to seek out a relationship with a large acquirer.

“We started to really think about how [we] not only simplify integration and onboarding, but [how to] better manage operations on an ongoing basis,” he said. “We decided the best solution for us was to integrate with a large merchant acquirer, as that simplifies a lot of the day-to-day issues around settlement, reconciliation, reporting and dispute management.”

As a result of the pair-up, Worldpay merchants will essentially gain push-button access to Amazon Pay at checkout, without a heavy or complicated integration process. Merchants will be able to leverage a new, custom-built application programming interface (API), designed to ensure seamless onboarding for Amazon Pay, using Worldpay as a payment gateway provider and acquirer.

Instagram and PayPal Pair Up for Instacommerce

For a large segment of social media users, commerce may be getting a lot more contextual, as Instagram has launched a checkout feature designed to help the platform become a more attractive place for consumers to shop. According to Instagram, its new checkout feature will enable consumers to purchase desired items while looking at “beauty tutorials” or images of shoes, fashion and other interest areas in a more seamless manner, without navigating away from Instagram.

“Instagram is a place for people to treat themselves with inspiration, not a place to tax themselves with errands. It’s a place to experience the pleasure of shopping versus the chore of buying,” the company said.

That checkout experience is powered on the backend by PayPal via its retail partnership program. The payments company said its full-stack processing platform, called PayPal for Partners, “allows Instagram to manage the end-to-end commerce experience for buyers and sellers,” according to a blog post from PayPal EVP and COO Bill Ready.

“Checkout on Instagram, which will be available within posts and stories with shopping stickers and tags, enables Instagram users in the U.S. to buy, track and manage their purchases directly within Instagram, and allows businesses to sell directly on Instagram without the buyer having to change contexts,” he said. “After discovering a checkout-enabled product, shoppers will see the option to ‘Checkout on Instagram’ when they tap to view additional details.”

The move comes as part of Instagram’s larger efforts to centralize shopping within its site. Although users can shop Instagram today, swiping a desired product leads the customer away from Instagram to the vendor’s site to complete the purchase.

Earlier this month, however, Instagram began rolling out its new PayPal-powered shopping experience, in which users can shop and check out within the app. The company is testing the program with more than 20 beauty and fashion brands, including direct-to-consumer retailers and well-known companies.

And speaking of well-known companies, this week saw another big eCommerce/payments announcement, with the news that Google Pay is coming to eBay.

eBay Drafts Google Pay

eBay’s ongoing efforts to reset its site’s payments function took another step forward this week, with the announcement that Google Pay will soon be a payment option for eBay shoppers.

Shoppers who prefer to use Google Pay will be able to do so within the eBay app, mobile website and desktop site, regardless of operating system or device.

“Google Pay provides users with a fast, simple and secure way to pay online,” said Alyssa Cutright, vice president of global payments, billing and risk at eBay. “Offering Google Pay as a form of payment is another significant step toward providing our customers with more choice in their payment options, and creating an experience that is tailored to personal preferences. ”

In early 2018, eBay announced its plans to intermediate payments through a multi-year implementation scheduled to last through the mid-2020s.

Google Pay is not the first “Pay” option available to eBay users. Last July, Apple Pay went online with eBay, though it is somewhat more limited than Google Pay. Apple Pay works in-app with eBay and on the web, but users have to be on the Safari browser, as Apple Pay doesn’t work with Chrome.

Android users chomping at the bit to use Google Pay on eBay will have to wait a bit: The rollout officially starts in April.

So, what did we learn this week? First, two heads are often better than one – particularly if one of the heads is a specialist in optimizing, streamlining and simplifying digital payments. Second, the team at Worldpay probably needs a few cups of coffee at this point, as they had a particularly busy week in an area where busy is the baseline.

Until next Monday!


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.