Adyen clinches Wirecard clients during online shopping boom

[BRUSSELS] Adyen said it poached new merchants from embattled German payments firm Wirecard, as the Dutch company reported a 27 per cent rise in revenue for the first half of the year.

The scandal that plagued competitor Wirecard proved to be a boost in Adyen's favour. Retail merchants looked for payment processing alternatives following the German company's spectacular collapse in June, when Wirecard filed for insolvency after admitting that almost two billion euros (S$3.24 billion) previously reported as cash didn't exist.

"We certainly got some inbound from merchants that wanted to work with us," Adyen chief financial officer Ingo Uytdehaage said in an interview. They were primarily in the Asia-Pacific region, he said.

Partnerships with a couple of former Wirecard clients are already live, while Adyen is still in talks with many others, the finance chief said. Some are "really well-known brands" that "wanted to convert quickly", he said, declining to name specific new merchants.

But, Mr Uytdehaage said, the Wirecard scandal overall was "not good for trust in the industry". Nonetheless, that same industry remains buoyant during the pandemic as more shoppers rely on contactless cards and e-commerce while shunning cash.

Amsterdam-based Adyen, which processes payments for firms including Uber Technologies and eBay, has benefited from the trend, leading its shares to double this year even as Amsterdam's AEX Index has declined 7.3 per cent. On Thursday, the company reported 279.9 million euros in net revenue for the first half of the year, beating average analyst expectations of 274.2 million euros.

The company said it processed 129.1 billion euros of payments for the period, an increase of 23 per cent from last year. Analysts on average had expected processed volumes of 127.15 billion euros for the period, according to data compiled by Bloomberg.

Despite the wins, there were some bruises for the Dutch company in the first half, particularly in the travel industry, where traffic has cratered due to the pandemic. Mr Uytdehaage said the company is starting to see a rebound from online booking platforms with more people taking holidays in their local regions but "it's absolutely not at the levels before Covid started", he said.

Adyen expects to continue to benefit from an accelerating trend from cash towards cards, even as customers start to trickle back into brick-and-mortar stores, Mr Uytdehaage said, pointing to government incentives for customers to pay with cards or smartphones. The company offers merchants payments processing both online and in stores and in a variety of local payments methods.

The finance chief confirmed the company's outlook, and said it continues to hire new employees, growing its workforce to around 1,500 people by the end of the second quarter.

Adyen still expects to grow net revenue at a rate between the mid-20s and low-30s in the medium term. It also plans to increase its annual earnings before interest, taxes, depreciation and amortisation margin to above 55 per cent in the long term. The company doesn't define what it perceives as medium or long term.

BLOOMBERG