Rapid adoption of mobile devices, the rise of online trade and the accelerating shift from cash to card payments has created rich opportunities for payment companies. Look no further than WorldPay (WPG), whose shares started conditional trading on London's main market this week. The group looks set to secure a valuation of over £6bn when it gains a full listing on Friday, propelling it into the FTSE 100 and marking the UK's largest flotation since Royal Mail went public in 2013.
Private equity giants Advent International and Bain Capital acquired the business from Bank of Scotland in 2010 and have invested more than £1bn in staff, technology, acquisitions and joint ventures. WorldPay's global payments network enables merchants to accept more than 300 types of payments in 126 currencies and 146 countries. It processed nearly £370bn in transactions for about 400,000 merchants in 2014, who used its point-of-sale terminals and tablet-based systems to ring up purchases in stores and its software to accept card payments via telephone and orders made on mobile devices. The group also crunches transaction and customer data to offer industry insights to clients and help them to target loyalty schemes and keep track of customers' preferred payment methods.
WorldPay's investments, diverse offering and leading position in a mushrooming industry have fuelled strong growth: both revenues and cash profits rose 13 per cent in the first half of 2015, to £1.94bn and £183m, respectively. Those gains reflected an 11 per cent rise in the value of transactions to £195bn, strong growth in the higher-margin global e-commerce division and the group's lucrative focus on small and medium-sized enterprises as well as large corporations.
