European Merchants Services Prospering for First Data

First Data’s IPO filing documents have shed a little light on its European merchant acquiring businesses which are grouped together under Global Business Solutions in its reporting. The issuer facing business, Global Financial Solutions, is larger but I don’t discuss that here.

Europe, Middle East and Africa (EMA) accounts just 14% of Global Solutions total sales. America is where the real money is made.

Nonetheless, EMA revenue has been growing nicely over the past two years, from $453m in 2012 to $554m in 2014. This still still lags behind WorldPay, the European market leader, which records $2bn annual net sales in the UK alone. About 30% of First Data revenue is accounted for by product sales – primarily the rental of card machines, and the remainder by transaction and processing fees.

The filing calls attention to growth in 2013 and 2014 in the EMA mechant acquiring alliances businesses and in direct sales in Ireland, UK and Poland in 2013. The alliance businesses are CardNet (UK), AIB Merchant Services (Ireland), European Merchant Services (Benelux) and BNL POSitivity (Italy).

The product line was flattered in 2014 by a one-off item of $12m for the sale of a merchant portolio in Poland.

First Data EMEA merchant facing business

First Data EMEA Merchant Facing Businesses
Source: First Data IPO filing, 2015

First quarter performance in 2015 wasn’t so impressive at first sight as reported dollar revenues fell by 6% to $119m. In constant currency, sales were up 10% so the dip is more a reflection of the Euro’s woes than the health of First Data’s businesses.

Source: First Data IPO filing, 2015
Source: First Data IPO filing, 2015

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