(News Bulletin 247) – The two groups have entered into exclusive negotiations to create a joint venture focused on payment services for merchants in France. An alliance that would allow Worldline to strengthen itself considerably in France.

Worldline has managed to break an important lock. In the payments sector, merchant services in France have historically been dominated by large banking groups, which is not the case in other countries. This explains the importance, so far, very relative of this market for the tricolor company, the Hexagon representing approximately 10% of the turnover of Worldline.

But it seemed certain that French establishments, like what has happened in other countries (Germany for example), would one day call on the expertise of payment specialists to strengthen their expertise in these activities.

Crédit Agricole is thus the first to take the plunge. The mutual bank had already tried to partner with a specialist in the sector, in 2018, with the German Wirecard, the fallen star of payments. The bankruptcy in 2020 of the fintech, following gargantuan accounting irregularities, obviously reshuffled the cards.

A joint venture effective in 2025

This time Crédit Agricole has therefore chosen to join forces with Worldline and the two companies entered into exclusive negotiations on Wednesday to create a joint venture in merchant services in France.

This company would be held at 50% of the capital plus one share by Worldline and therefore almost 50% by Crédit Agricole. The two groups will work in 2023 and 2024 on “a phase” of joint investments amounting to 80 million euros, intended in particular for the development of the products and offers of this joint venture. The latter will be operational from 2025, according to the provisional schedule of the two groups.

This union should allow the two companies to best capture a substantial French market, the turnover volumes of traders being estimated at 700 billion euros on an annual basis.

Worldline will deliver its technological expertise in payment solutions and platforms for merchants, whether for physical or online commerce, while Crédit Agricole will bring its large distribution networks (16,000 business advisors in France) and its knowledge of the market. French.

“This project is a unique opportunity for Worldline to accelerate its geographical footprint and further expand its merchant acquiring activities in continental Europe. In parallel, thanks to this strategic partnership project, Worldline will exploit new offers specific to the French market. “, said Gilles Grapinet, the general manager of Worldline, quoted in a press release.

Economies of scale

The company did not give an estimate on its revenue trajectory or margins. But the bank Jefferies retains, in a note, an impact of 100 basis points (1%) per year on the turnover of the division “merchant services” of Worldline.

“It is difficult to assess the financial impact of this agreement, but in our view it is far from negligible. Above all, it confirms Worldline’s role as a consolidator of payment services in Europe”, considers Invest Securities for its part. .

On the Paris Stock Exchange, Worldline shares opened up nearly 8% before the market moderated its enthusiasm. Around 2:20 p.m., the title advanced by 2.3% and marked the strongest increase in the CAC 40.

“It’s a big blow for Worldline”, commented a financial analyst. “This will allow Worldline to offer its customers a more complete offer, to capture greater volumes, to create significant economies of scale, since payments are above all a fixed cost industry, and therefore to be more competitive”, underlines this expert. “Now the question is whether the other French banks will follow the example of Crédit Agricole,” he adds.