daniel stewart & company · izettle, payleven, shopify and shopkeep, to name just a few, have...

14 January 2016

Sector Research

Simon Willis +44 (0)20 7776 6573 [email protected] Sales Team +44 (0)20 7776 6550 [email protected]

‘The payments industry continues to evolve through a once-in-a-generation shift in

the way people pay. Consumers are demanding faster, safer and more convenient

payment mechanisms. Regulators are pursuing an agenda of innovation and open

access to payment infrastructures.’

Vocalink 2014 Report & Accounts (UK banks/building society owned company behind

Bacs, Fast Payments, Paym and Zapp)

The payments industry is currently undergoing a dramatic change in the way

consumers and businesses pay for goods and services, as the Vocalink quote above

highlights.

New products and services are appearing on a daily basis.

Over the last 12 months or so tech giants Amazon, Apple, Google and Samsung

have all launched payments products.

First Data, PayPal, WorldPay and Square have all IPO’d, while, even as we write,

two US payment majors look set to join forces via Global’s proposed acquisition of

Heartland. Early-stage companies such as Stripe, Square, LevelUp, Dwolla, Klarna,

iZettle, Payleven, Shopify and ShopKeep, to name just a few, have emerged, and

continue to emerge, challenging more established peers both in core payment

facilitation and value-added-services at both the online and offline point-of-sale.

Recent changes have been driven, to an extent, by the advent of smartphone

technology and near field communications (NFC), but disruption is about far more

than just contactless payment. It is about:

payment companies being able to facilitate payment across all channels

seamlessly (‘omni-channel’);

incumbents competing with the increasing ability to deliver existing products more

cheaply due to technological change (both hardware and software);

new business and revenue models, as new payment players seek different and

disruptive (not necessarily new – e.g. ACH) ways to deliver payments, and

monthly-pay SaaS/PaaS models for merchants emerging to replace more

restrictive contracts.

More particularly, from an economic and investment perspective, it is about the

weight of investment that has come into the market from existing players, new,

venture capital-backed, companies, and, most importantly of all, the large consumer

techco aggregators, looking to play a significant role (Facebook, Amazon, Google,

Apple and very possibly companies we have never heard of), potentially driving down

payment returns as they look to global consumer and business spend as their

ultimate target and see payments as a key point of control, a core service that they

need to offer to address that target.

This note is divided into two sections.

The first section is designed to give an overview of the payments industry as it stands

at present and to look at some of the drivers behind the current rapid evolution of the

payments landscape.

In the second section, we give a profile of a selection of the major payments

companies.

The global non-cash payments industry is huge and continues to grow rapidly.

However, it is undergoing significant disruption and likely there is more to come.

Per Boston Consulting Group (BCG), banks handled $410 trillion in noncash

transactions in 2013, more than five times the amount of global GDP.

The value of noncash transactions is expected to reach $780 trillion by 2023, a

growth rate of 7% p.a.

The size of the addressable market and the rate of growth means that, for well-

positioned companies, the scale of the available opportunity is also huge.

In 2013, payments businesses generated total revenue of $1.1 trillion.

Payments revenues are expected to reach $2.1 trillion, growth of 8% p.a. by 2023.

Per the Capgemini and RBS World Payments Report for for 2015, the global non-

cash transactions market saw 357.9 billion transactions in 2013, growth of 7.6%

which was in line with growth of 7.4% p.a. between 2009-13.

While cash remains overwhelmingly the dominant form of payment, card payments

have continued to gain market share to around 60% of the total. E-commerce

payments are converging with mobile payments which are taking off. Digital

currencies and blockchain technology, which could, possibly, redraw the landscape

once again, sit on the horizon, though digital currency does face a number of issues.

Of these, one of the most notable is an insurmountable hurdle for so many payment

initiatives: the oft-cited ‘chicken-and-egg’ scenario: if insufficient consumers use a

payment method, merchants won’t accept it, and vice-versa.

Mobile payments look set to be instrumental in redrawing the payments landscape.

To be clear, we define mobile payments as a general term applying to buying things

via a mobile device, as opposed contactless mobile payments, or ‘mPay’ where the

mobile phone is a ‘de facto’ payment card.

Between 2011-15F, Capgemini expects that M-payments will have grown at 60.8%

p.a. and, at 47.0bn, the volume of transactions is expected to have overtaken e-

commerce transactions by the end of 2015.

The mobile payments market in terms of phones and tablets remains in the early

stages of exponential growth.

In terms of contactless mobile, ‘mPay’, the next generation of product has already

arrived in the form of wearables and accessories, notably Apple Watch, the Swatch

smartwatch in China, the FitPay and Connectedevice for PebbleTime and the

TopShop x bPay accessories range for fashion retailer TopShop in the UK.

New entrants have undoubtedly lowered barriers to entry in the payments space and,

to a degree; have started to redraw the landscape of the industry.

On one level, there is good reason to believe that profit margins of large incumbent

players could be under threat, as witnessed by the introduction of the Single Euro

Payments Area (SEPA) and the regulation of interchange fees in Europe which BCG

estimates could lead to a loss of EUR 8 billion of revenue annually beginning in 2015.

However, at the same time, it is clear that the big incumbents have to date been able

to replicate or work around apparently new products, helped by their huge resources.

However, in the medium term, we expect to see margin erosion.

Clear winners in the value chain would appear to include the consumer and, perhaps,

the merchant, as prices are driven down.

A significant number of products have been launched which rely on packaging

together other suppliers’ products, where the apparent ‘uniqueness’ is based purely

on the way the platform is constructed. If such companies do not have a meaningful

customer base, it is often difficult to achieve traction. By contrast, the central reason

why companies such as Apple, Google and Amazon have a potentially key role to

play is not simply attractiveness of their products but also the scale of their existing

customer base.

We are by no means saying that the disruptors will have things all their own way. The

recently-IPO’d First Data, for instance, provides a good example of a major

incumbent which has re-invented itself by creating additional revenue streams.

We can identify a number of additional revenue streams:

Additional products: Klarna, the Swedish e-commerce payments company, is able

to offer credit to US consumers without a credit card – by entering only their email

and zip code;

New markets: First Data, the leading US payments processor, has used its EMV-

friendly Clover product to launch The Station, a till replacement screen, in 2013 to

the SME market and over the past year has rolled out Mobile and Mini versions;

Marketing and advertising revenues: as exploited by Facebook and Google;

Data Analytics: this has become a key value creator and, for some, a panacea.

Again using First Data as an example, it has partnered with Palantir Technologies

to develop the Insightics product and Levelup using predictive modelling to batch

forecast payments; and

Operational products, such as inventory and accounts, as launched by

Intuit/Quickbooks.

There are a number of other key issues facing the industry which we also address:

The US & the EMV liability shift – the US has lagged other markets in the adoption

of chip & pin technology (EMV). Driven by a desire for improved security, with

effect from October, merchants now shoulder the burden for security fraud if they

have not adopted EMV technology;

Barriers to Globalisation – the rate of growth developing markets offers a huge

opportunity but protectionism as well as cost could prove a barrier to companies

looking to take advantage of this;

Blockchain technology – the travails of Bitcoin have created something of a false

start but it is clear that major banks and regulators around the world are now

taking blockchain technology and digital currencies seriously as a potential game-

changer for financial services; and

Regulation – in common with other areas of the financial services industry, the

payments space is experiencing increasingly complex regulation.

Square Register allows individuals and merchants in the United States, Canada, and

Japan to accept offline debit and credit cards on

their iOS or Android smartphone or tablet computer. Square’s point-of-sale stands in

stores, were used to process $23.8 billion in transactions last year. Square has also

partnered with Snapchat to offer an instant friend-to- friend payment messaging

service (launched in 2014). Square listed on the NYSE on 19th November 2015.

PayPal, which was spun out of Ebay and IPO'd in July 2015, is one of the world's

largest internet payments companies. It operates as an acquirer, performing payment

processing for online vendors, auction sites and other commercial users, for which it

charges a fee. The company also provides a PayPal Here credit card reader, used as

an add-on for mobile device payments.

Apple’s mobile payments and digital wallet service enables users to make payments

via their Apple devices. It also enables users to make payments at contactless point

of sale. Launched in the US in October 2014 and the UK in July 2015, it has

agreements with most major banks.

Works in a similar manner to Apple Pay, seeks to replace POS card sales with the

use of a smartphone. Uses a Magnetic Secure Transmission technology, this is more

technologically advanced than Apple’s use of Near Field Communication (NFC)

methods and may move them ahead of their rivals in the long term.

Replaces Google’s previous Google Wallet system, and allows consumers to make

purchases at point-of-sale using NFC technology, as well as pay for in-app

purchases on Android devices.

Due for release by July 2016, Chase have signed up a number of Apple Pay users

and signed deals with Walmart, Best Buy and a number of other major US retailers.

Customers are able to complete payments directly on their Apple or Android devices

through the Chase Pay or alternatively through the CurrentC app.

Source: Google Stock Image






https://en.wikipedia.org/wiki/Debit_card#Offline_debit_system

https://en.wikipedia.org/wiki/Credit_card

https://en.wikipedia.org/wiki/IOS

https://en.wikipedia.org/wiki/Android_(operating_system)

https://en.wikipedia.org/wiki/Mobile_phone

https://en.wikipedia.org/wiki/Tablet_computer

Venmo is a mobile payments service that is now a part of PayPal. It allows users to

transfer money between one another using a mobile phone app or web interface.

Users link their bank accounts to their Venmo account and are able to pay using

either an email account or phone number.

RuPay facilitates electronic payment at all Indian banks and financial institutions; it

competes with MasterCard and Visa in India. It was designed to consolidate and

integrate various payment systems in India and acts as the equivalent of a

credit/debit card

Alipay.com is a third-party online payment platform with no transaction fees. Alipay

provides an escrow service, in which consumers can verify whether they are happy

with goods they have bought before releasing money to the seller. Alipay operates

with more than 65 financial institutions including Visa and MasterCard to provide

payment services for Taobao and T-mall as well as more than 460,000 Chinese

businesses. Internationally, more than 300 worldwide merchants use Alipay to sell

directly to consumers in China.

Klarna is a Swedish e-commerce company that provides payment services for online

storefronts. Their core service is to assume stores' claims for payments and handle

customer payments, eliminating the risk for seller and buyer. About 20% of all e-

commerce sales in Sweden go through Klarna. They also operate in Norway,

Finland, Denmark, Netherlands and Germany. Klarna was launched in the US on 1st

September 2015, with Overstock.com announced as their first major retail partner.

Stripe is a technology company that allows both private individuals and businesses to

accept payments over the Internet. Stripe focuses on providing the

technical, fraud prevention, and banking infrastructure for online payments

processing. It was announced in March 2014 that Stripe would support Bitcoin

transactions. Stripe raised $280M in six equity funding rounds between March 2011

and July 2015 and has a significant presence in the US and European e-payments

market.






Against a background where global equity markets have seen an unexciting 12

months and a testing start to the New Year, many payments stocks have delivered

excellent returns.

Source: Bloomberg Source: Bloomberg (1) Share price as at 7

th January 2016


th January 2016

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In Table 1 we show the performance over 1, 3 and 12 months for each of the stocks

included in our universe of selected companies.

Clearly, the 1 month and 3 month performance figures have been affected by the

weak markets at the start of the New Year but over 12 months many stocks have

performed strongly.

Ticker Name Chg Pct 1M (%) Chg Pct 3M (%) Chg Pct 1Yr (%) V US VISA INC-CLASS A SHARES (4.0) (1.3) 12.1 MA US MASTERCARD INC-CLASS A (4.9) (5.9) 6.8 PYPL US PAYPAL HOLDINGS INC (4.5) 3.4 ADP US AUTOMATIC DATA PROCESSING (6.1) (8.2) (7.4) FISV US FISERV INC (4.2) (4.6) 22.0 FIS US FIDELITY NATIONAL INFO SERV (4.7) (17.2) (7.3) CIEL3 BZ CIELO SA (5.6) (13.3) 3.1 ADS US ALLIANCE DATA SYSTEMS CORP (4.7) (8.8) (12.2) FDC US FIRST DATA CORP- CLASS A (8.3) N/A N/A WU US WESTERN UNION CO (7.3) (11.4) (5.5) TSS US TOTAL SYSTEM SERVICES INC (15.0) (5.2) 35.0 VNTV US VANTIV INC - CL A (8.6) (2.0) 35.1 GPN US GLOBAL PAYMENTS INC (14.8) (10.8) 38.9 ATO FP ATOS SE (5.6) 3.7 12.9 WPG LN WORLDPAY GROUP PLC 6.8 N/A N/A ING FP INGENICO GROUP (5.6) 3.5 20.4 WDI GR WIRECARD AG 2.3 5.5 21.3 PAY US VERIFONE SYSTEMS INC (6.3) (18.7) (33.5) WLN FP WORLDLINE SA (5.2) 2.8 37.4 PAYS LN PAYSAFE GROUP PLC 20.7 13.5 94.1 HPY US HEARTLAND PAYMENT SYSTEMS IN 10.4 37.6 70.3 EPO LN EARTHPORT (3.1) (19.4) (29.8) SQ US SQUARE (3.6) N/A N/A PROX LN PROXAMA PLC 244.4 14.8 (24.4)

SPX INDEX S&P 500 INDEX (4.4) (4.5) (5.9) ASX INDEX FTSE ALL SHARE INDEX (0.8) (6.8) (6.7) DAX INDEX DAX INDEX (4.2) (1.9) 2.6 CAC INDEX CAC 40 INDEX (4.4) (7.5) 4.1

Source: Bloomberg

(1) Share price as at 7th January 2016

The Payments sector is a big market with some big companies. We have selected a

universe of stocks including the key quoted players.

In the Companies section, we provide a four page profile of the companies included

in our universe.

Table 2 shows the relative valuation of these stocks, giving P/e, EV/EBITDA and the

yield for each stock:

Ticker Name Mkt Cap (USDm)

(1)

Revenue

(USDm)

Mkt Cap/Revenue (x)

EV (USDm)

EV/TTM EBITDA

(x)

EV/EBITDA

FY1(x)

EV/EBITDA

FY2(x)

P/E(x) P/E FY1(x)

P/E FY2(x)

Dividend

Yield(%) V US VISA INC-CLASS A

SHARES 162395 13880 11.7 152996 16.0 14.5 12.6 34.5 25.9 22.1 0.7

MA US MASTERCARD INC-CLASS A

102891 9473 10.9 99308 15.1 17.6 15.5 26.5 27.4 23.6 0.7

PYPL US PAYPAL HOLDINGS INC 40475 8025 5.0 36176 18.3 14.4 12.4 N/A 26.1 22.0 N/A ADP US AUTOMATIC DATA

PROCESSING 36334 10939 3.3 35096 14.5 14.1 12.8 26.6 24.2 21.2 2.5

FISV US FISERV INC 20159 5066 4.0 24085 14.0 13.5 12.6 27.6 22.8 20.4 N/A CIEL3 BZ CIELO SA 66468 7726 8.6 82238 17.0 15.4 13.8 19.9 18.1 16.3 2.0 ADS US ALLIANCE DATA SYSTEMS

CORP 16020 5303 3.0 20379 13.0 10.7 9.5 28.4 17.4 15.2 N/A

FDC US FIRST DATA CORP- CLASS A

13110 11152 1.2 37016 14.1 13.7 12.8 N/A 21.5 10.7 N/A

WU US WESTERN UNION CO 8615 5607 1.5 10684 7.8 7.6 7.5 10.2 10.2 9.9 3.6 TSS US TOTAL SYSTEM SERVICES

INC 8546 2447 3.5 9547 12.0 11.6 11.1 24.9 18.9 17.6 0.9

VNTV US VANTIV INC - CL A 8871 2577 3.4 12118 17.7 15.2 13.7 42.8 20.9 17.9 N/A GPN US GLOBAL PAYMENTS INC 7970 2774 2.9 9586 15.7 14.1 13.0 28.0 20.7 18.4 0.1 WPG LN WORLDPAY GROUP PLC 6166 863 7.1 8442 20.6 20.7 18.7 N/A 41.1 28.8 N/A PAY US VERIFONE SYSTEMS INC 2837 2000 1.4 3463 12.5 8.7 7.9 29.5 11.7 10.2 N/A WLN FP WORLDLINE SA 3181 1149 2.8 2886 N/A 11.4 10.2 29.2 23.8 22.2 N/A HPY US HEARTLAND PAYMENT

SYSTEMS IN 3407 2311 1.5 3862 17.2 18.9 16.6 46.6 32.1 27.6 0.4

PAYS LN PAYSAFE 1877 365 5.1 2043 23.4 15.4 8.3 48.1 21.8 15.4 N/A WDI GR WIRECARD AG 6182 601 10.3 5316 23.2 21.6 16.8 42.6 37.1 28.1 0.3 ING FP INGENICO GROUP 6831 1607 4.2 7274 16.5 14.5 13.1 29.6 24.0 21.3 0.9 ATO FP ATOS SE 7557 9051 0.8 7422 8.2 6.1 5.4 23.4 13.2 11.1 1.1 EPO LN EARTHPORT PLC 162 19 8.4 132 N/A 56.4 10.3 N/A N/A 20.0 N/A SQ US SQUARE 3705 850 4.4 4046 N/A N/A 1456.9 N/A N/A N/A N/A PROX LN PROXAMA 25 1 21 14 N/A N/A 3.6 N/A N/A 4.2 N/A

Source: Bloomberg (1) Share prices as at 7

th January 2016

Key highlights are as follows:

The Payments sector includes an array of substantial companies, with 16 of the

companies in the universe boasting a market cap of USD5bn or more;

In contrast to global stock markets, many of these stocks have performed strongly

over the last 12 months, rising by 30-50%, reflecting the strong growth in the

market and attractive margins for established companies;

P/e ratios for Forecast Year 1 (FY1) range from 16-30x, with outliers above this in

Worldpay, Wirecard and Heartland on p/e’s of 32-41x and below this in Western

Union, Verifone and ATOS on 10-13x;

EV/EBITDA multiples range from 11-19x for FY1, with ATOS, Verifone and

Western Union below this on 6-9x and Worldpay and Wirecard on 21-22x and

Earthport on 56x, though these multiples fall swiftly reflecting strong growth;

Ticker Name Mkt Cap (USD)(1)

Last Px (USD)(1)

Chg Pct 1D(%)

Chg Pct 1M(%)

Rev - 1 Yr Gr:Y(%)

EPS - 1 Yr Gr:Y(%)

P/E(x) ROE(%) Dvd 12M Yld(%)

V US VISA INC-CLASS A SHARES 162395 74 (2.0) (6.7) 9.3 30.9 34.5 22.1 0.7 MA US MASTERCARD INC-CLASS A 102891 92 (1.8) (6.7) 13.5 20.9 26.5 58.3 0.7 PYPL US PAYPAL HOLDINGS INC 40475 33 (2.5) (6.9) 19.3 N/A N/A N/A N/A ADP US AUTOMATIC DATA PROCESSING 36334 79 (3.1) (8.7) 7.0 12.4 26.6 28.6 2.5 FISV US FISERV INC 20159 88 (1.1) (6.8) 5.2 22.2 27.6 22.2 N/A FIS US FIDELITY NATIONAL INFO SERV 16701 59 0.0 (6.1) 5.8 43.2 19.7 11.1 1.8 CIEL3 BZ CIELO SA 16445 9 2.0 (1.8) 14.7 20.1 19.9 68.7 2.0 ADS US ALLIANCE DATA SYSTEMS CORP 16020 262 (3.0) (7.1) 22.8 (13.6) 28.4 31.3 N/A FDC US FIRST DATA CORP- CLASS A 13110 15 (5.8) (15.5) 3.2 N/A N/A N/A N/A WU US WESTERN UNION CO 8615 17 (0.6) (9.9) 1.2 11.9 10.2 67.0 3.6 TSS US TOTAL SYSTEM SERVICES INC 8546 46 (3.0) (17.3) 18.5 13.0 24.9 20.1 0.9 VNTV US VANTIV INC - CL A 8871 46 (0.9) (10.5) 22.3 (8.3) 42.8 19.0 N/A GPN US GLOBAL PAYMENTS INC 7970 61 (3.7) (12.7) 8.6 22.1 28.0 33.5 0.1 WPG LN WORLDPAY GROUP PLC 9018 5 0.8 4.4 8.0 N/A N/A N/A N/A PAY US VERIFONE SYSTEMS INC 2837 25 (5.3) (6.0) 7.0 N/A 29.5 8.2 N/A WLN FP WORLDLINE SA 2943 22 0.7 (6.7) 1.3 N/A 29.3 20.8 N/A HPY US HEARTLAND PAYMENT SYSTEMS

IN 3407 93 (1.9) 16.8 8.2 (54.2) 46.6 14.4 0.4

PAYS LN OPTIMAL PAYMENTS PLC 1879 6 8.1 5.7 44.0 63.6 48.2 6.2 N/A WDI GR WIRECARD AG 6192 50 2.8 1.1 24.8 20.3 42.7 12.1 0.3 ING FP INGENICO GROUP 6849 112 (0.4) (4.1) 17.2 45.6 29.6 19.6 0.9 ATO FP ATOS SE 7590 73 (1.0) (5.8) 5.1 (10.4) 23.6 9.0 1.1 EPO LN EARTHPORT PLC 162 0 (1.4) (0.7) 78.1 (8.5) N/A (33.1) N/A SQ US SQUARE 3705 11 (3.1) (7.9) 53.9 (31.7) N/A N/A N/A PROX LN PROXAMA 25 0.02 (1.5) 244.4 (20.0) 45.6 N/A N/A N/A

Source: Bloomberg (1) Share prices as at 7

th January 2016

Yields, which are shown on a rolling 12 months basis, are typically less than 2%,

with Western Union again the outlier at 3.6%, again reflecting the fact that these

are growth stocks;

Most companies do not carry significant debt but there are exceptions such as

Cielo, Alliance Data Systems, Fidelity National Information Services, First Data,

Vantiv and Worldpay;

Table 2 shows a summary of valuation measures but also shows revenue and eps

growth over the last 12 months which provides a useful headline indicator of

growth;

Table 3 provides a summary of some key ratios – which give an overview of

growth and profitability;

Revenue growth typically lies in the range 7-15%, reflecting industry growth, but

there are some outliers at 20% or more and, importantly, there are only one or two

low growth or no-growth stocks;

EBITDA margins are typically 15-30% but outliers include Visa and Mastercard

with margin of around 69%.

Ticker Name Sales Growth (%) EBITDA Growth (%)

EBITDA Margin Operating Income Margin

Net Income Growth (%)

V US VISA INC-CLASS A SHARES 9.3 17.5 68.9 65.3 16.4 MA US MASTERCARD INC-CLASS A 4.3 24.1 69.0 52.2 8.1 PYPL US PAYPAL HOLDINGS INC N/A N/A 22.2 15.7 N/A ADP US AUTOMATIC DATA PROCESSING 6.2 5.3 21.9 18.5 0.8 FISV US FISERV INC 3.8 7.7 33.0 25.0 (11.3) FIS US FIDELITY NATIONAL INFO SERV 1.8 2.6 28.5 18.6 29.9 CIEL3 BZ CIELO SA 37.0 26.2 47.4 40.0 10.4 ADS US ALLIANCE DATA SYSTEMS CORP 24.6 10.6 25.3 18.0 (12.1) FDC US FIRST DATA CORP- CLASS A 2.8 1.8 23.1 13.1 57.4 WU US WESTERN UNION CO (1.9) 0.3 24.9 20.0 5.3 TSS US TOTAL SYSTEM SERVICES INC 12.6 19.2 29.4 20.0 17.0 VNTV US VANTIV INC - CL A 26.6 30.2 22.4 13.3 66.3 GPN US GLOBAL PAYMENTS INC 7.2 11.1 21.7 16.7 13.0 WPG LN WORLDPAY GROUP PLC N/A N/A 44.5 28.0 N/A WDI GR WIRECARD AG 27.1 35.2 29.5 22.5 31.9 ATO FP ATOS SE 15.5 27.2 9.2 5.2 40.6 PAY US VERIFONE SYSTEMS INC 7.0 25.9 13.8 5.3 N/A WLN FP WORLDLINE SA 1.3 (6.2) 16.9 13.1 (15.3) HPY US HEARTLAND PAYMENT

SYSTEMS IN 15.7 7.0 8.7 4.1 (40.5)

OPAY LN OPTIMAL PAYMENTS PLC 45.9 42.0 20.4 13.7 (26.9) EPO LN EARTHPORT PLC 78.1 (127.1) (27.7) (39.3) (45.9) SQ US SQUARE 49.4 N/A N/A (14.1) (14.1) PROX LN PROXAMA N/A N/A N/A N/A 2.1

Source: Bloomberg

We show in Table 5 a range of key valuation metrics for technology and social media companies including Market Cap/Revenue, Market Cap per User and Revenue per User.

Name Tkr & Exch (1)

Mkt Cap (USD m) (2)

Net Sales T12M (m)

Mkt Cap/Revenue (x)

No of Users (m) (3)

Mkt Cap per User (USD) (2)

Revenue per User (USD) (2)

Alphabet GOOG US 496567 71763 7 2200 226 33 Apple Inc AAPL US 537593 233715 2 N/A N/A N/A Samsung Electronics

005930 KS 140839 177125 1 N/A N/A N/A

Yahoo YHOO US 28926 4948 6 1000 29 5 Ebay EBAY US 30917 15847 2 159 194 100 LinkedIn LNKD US 28302 2772 10 400 71 7 Facebook FB US 275249 15937 17 1500 183 11 Twitter TWTR US 13645 1987 7 302 45 7 Amazon AMZN US 284562 100588 3 300 949 335 Tencent Holdings 0700 HKG 167299 15011 11 244 686 62 Yelp BABA US 1891 506 4 2000 1 0 Alibaba Group YELP US 175294 13825 13 142 1234 97 Instagram N/A 35000 700 50 300 117 2

Source: Bloomberg

(1) All companies listed ex Instagram which is owned by Facebook

(2) All figures in USD ex Samsung which is in Korean Won

(3) https://www.linkedin.com/pulse/heres-how-much-youre-worth-tech-giants-auwal-abubakar-

babaty?forceNoSplash=true

Source: Bloomberg

Source: Bloomberg

It should be noted that for Amazon Revenue per User is USD 335.

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55ALPHABET INC-CL C GOOG US

APPLE INC AAPL US

SAMSUNG ELECTRONICS CO LTD005930 KSYAHOO! INC YHOO US

EBAY INC EBAY US

LINKEDIN CORP - A LNKD US

FACEBOOK INC-A FB US

TWITTER INC TWTR US

AMAZON.COM INC AMZN US

TENCENT HOLDINGS LTD 0700 HKG

YELP INC BABA US

ALIBABA GROUP HOLDING-SP ADRYELP USINSTAGRAM N/A

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110 ALPHABET INC-CL C GOOG US

APPLE INC AAPL US


EBAY INC EBAY US



TWITTER INC TWTR US



YELP INC BABA US


Source: Bloomberg

It should be noted that Market Cap per User is as follows:

For Amazon USD 949;

For Tencent USD 686; and

For Alibaba USD 1234.

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YELP INC BABA US


The global non-cash payments industry is huge and continues to grow rapidly.

Per Boston Consulting Group (BCG), banks handled $410 trillion in noncash

transactions in 2013, more than five times the amount of global GDP.

The value of noncash transactions is expected to reach $780 trillion by 2023, a

growth rate of 7% p.a.

What is the addressable market for payments companies?

The size of the market and the rate of growth means that, for well-positioned

companies, the scale of the available opportunity is huge.

In 2013, payments businesses generated total revenue of $1.1 trillion.

Payments revenues are expected to reach $2.1 trillion by 2023, growth of 8% p.a.

Per the Capgemini RBS World Payments Report for 2015, the global non-cash

transactions market saw 357.9 billion transactions in 2013, growth of 7.6% which was

in line with growth of 7.4% p.a. between 2009-13.

Source: Capgemini RBS World Payments Report 2015

By volume, North America and Europe continue to account for the lion's share of

global transactions (over 60%) but, not surprisingly, the rate of growth and,

interestingly, the level of usage are highest in Mature Asia Pacific, CEMEA and

Emerging Asia. This is shown in Chart 9.

By region, between 2009-2013:

Emerging Asia and Central Europe, Middle East & Africa (CEMEA) saw the fastest

rate of growth at 20.9% p.a. and 20.1% p.a. respectively;

Growth was also strong in Latin America and Mature Asia Pacific at 10.4% p.a.

and 9.1% p.a. respectively; and

Growth in Europe and North America was 4.3% p.a. and 4.2% p.a. respectively,

still some way above GDP growth.

Chart 10 shows the breakdown of payments by type for each region around the

world.

With the rapid growth of card payments, the non-cash payments industry has seen a

significant shift in the landscape: Over recent years, debit and credit card usage has

continued to increase and in 2013 card payments accounted for 62.8% of all non-

cash transactions globally. Correspondingly, the rate of cheque usage in most

regions has seen a sharp decline.

However, perhaps not surprisingly, cash is still by far the preferred payment method

of consumers in most markets around the world, with few exceptions.

Similarly, direct debits, credit transfers and cheques still make up a significant share

of transactions globally.

We summarise below the key highlights.

By payment type:

Card payments now account for a minimum of 40% in each region, with Europe

and Latin America the lowest, at 43% and 49% respectively;

Asia Pacific, Emerging Asia and CEMEA each have a minimum of 70% of

transactions in the form of card payments;

Direct debits still account for 26% of transactions in Europe;

Credit transfers account for 26% of transactions in Europe and 22% in CEMEA but

just 8% in North America and 9% in Emerging Asia;

Cheques still account for 13% of transactions in North America whereas they

represent no more than 7% in any other region. The rate of cheque usage in the

US remains relatively high. But the rate of growth in online shopping in the US is

likely to result in continued growth in debit and credit card usage, at least until

alternative payment methods become more widely used.

Source: Capgemini & Royal Bank of Scotland World Payments Report 2015

The Capgemini RBS World Payments Report recognised three key drivers of change

in the payments market:

Developing markets growth;

E- and m-payments; and

Hidden payments.

Developing markets are growing at a rate which is likely to see non-cash transaction

numbers exceed the level of mature markets by 2021, if growth continues at the rate

seen in 2008-2012.

Looking at the rate of growth in China, and the Government's push to encourage

non-cash payment schemes such as China UnionPay and Alipay, in order to operate

in China international companies will have to be able to talk to and accommodate

these businesses.

Key highlights:

The number of debit cards grew by more than 20% in 2011 and 2012;

The number of Point of Sale terminals grew by over 40%;

In 2012, China’s top 10 POS companies made more than 6 million shipments,

around 31% of the global total;

The total number of cards in circulation in China is greater than the number in all

mature markets combined;

One in five people in the world using mobile banking lives in China;

Chinese e-commerce shoppers spent $213bn online in 2013, up 70% p.a. since

2009.

China UnionPay is the world’s largest card brand with 3.53 billion cards in circulation.

The rising penetration and convergence of online and mobile technologies together

with the growth of faster payments schemes based on debit and real-time payments

is seen as likely to be a key driver behind the continued growth of global non-cash

payments.

Charts 11 and 12 show the recent growth in e-payments and m-payments.

Source: Capgemini Source: Capgemini

Between 2011-15F, the respective growth rates are as follows:

E-commerce transactions ~ 15.9% p.a.;

M-payments transactions ~ total 60.8% p.a.

Banks ~ 58.1% p.a.;

Non-Banks ~ 82.7% p.a.

The trends highlight, in particular, the scale of growth in mobile payments which is

expected overtake the volume of e-payments in 2015.

It is worthy of note that, in the US, JP Morgan Chase and Wells Fargo have seen

growth rates of 15-20% p.a. over the last two years in the number of active mobile

banking users, giving the former over 22m users and the latter 16m.

In the UK, the number of mobile banking users is set to almost double from 17.8m to

32.6m by 2020, according to research by the Centre for Economics and Business

Research commissioned by Fiserv.

Hidden or unreported payments include the following and are likely to become a

larger part of the whole:

Prepaid retail or gift cards, including those issued by many leading retailers;

Virtual currencies;

Prepaid mobile wallets such as Google and Starbucks;

Payment aggregators such as PayPal, Google checkout and Amazon Payments;

Worker remittances.

Figure 13 shows a flowchart for a standard payment transaction. The process

involves a number of different parties, with banks and payment processors often

acting in more than one capacity. This means that, at first sight, the process is by no

means straightforward to understand.

However, per the UK Cards Association, in essence, in any card payment

transaction, there are five stakeholders in the process:

Cardholder;

Retailer/merchant;

Acquirer;

Card scheme; and

Issuer

This is the person holding a debit, credit or charge card.

Cardholders place their card into the chip & PIN reader. The customer then keys

in their PIN, to indicate their agreement to proceed with the transaction. An

authorisation code will be given to the merchant for the transaction by the

cardholder’s card issuer that will appear on the terminal receipt that is handed to

the cardholder. The card issuer will debit the transaction to the cardholder’s

account.

Alternatively, if the card does not have a chip (only a magnetic stripe) or the

merchant does not have a chip & PIN terminal, the merchant will swipe the card

through the terminal or use a paper voucher that the cardholder will need to sign.

A merchant sells goods or services to their customer (the cardholder). This can be

face-to-face in a shop, where both the cardholder and their card are present, or

when taking orders remotely e.g. over the phone for a restaurant take-away, a

mail order from a catalogue, or a purchase over the internet. This is a card-not-

present (CNP) transaction.

The card transaction’s details are entered into the merchant’s terminal and are

sent to its acquirer who will process the transaction and send it on to the relevant

card issuer for authorisation and settlement.

A merchant will have negotiated a merchant service agreement with its acquirer to

process payment card transactions on its behalf. Typically this agreement will also

include the acquirer providing one of its own terminals.

An acquirer is responsible for receiving the card transaction details from the

merchant’s terminal, passing it through to the card issuer via the card scheme for

authorisation and completing the processing of the transaction.

The acquirer will arrange the card transaction’s settlement and will typically credit

the merchant’s nominated bank account with the funds within four working days.

The acquirer will also deal with any chargebacks or requests for information (RFI)

that may be received from card issuers on any of their merchant’s transactions.

Card schemes are organisations that manage and control the operation and

clearing of card payment transactions according to card scheme rules.

The card schemes are responsible for passing card transaction details from the

acquirer to the issuer and for passing payments back to the acquirer which in turn

pays the merchant.

American Express, Diners Club, JCB, Maestro, MasterCard and Visa (including

Electron or Debit) are the card schemes that operate in the UK.

The issuer is the bank, building society or financial organisation that provides

payment cards (debit, credit, pre-paid or charge card) to their customer or

cardholder.

The issuer has responsibility for transactions made on cards that they have

issued, and will be responsible for debiting funds from the relevant cardholder’s

account. Note that American Express and Diners Club act as Card scheme, Issuer

and acquirer at the same time.

Source: The UK Card Association

As Worldpay recognised in its prospectus, the landscape is changing:

‘Although the traditional ‘four-party’ model still accurately describes many of the

functions and participants of the industry today, it does not reflect the proliferation of

payment types, new technologies, the globalisation of demand and supply or the

interconnected regulatory and risk frameworks which are now in evidence.’

In our view, the entry of new players into the markets, such as Paypal, Square, Strip,

Apple Pay and Alipay, has accelerated the evolution of the industry and is likely to

continue to do so, not least due to their ability to act in more than one capacity.

We think it is important to recognise that what, for many, may still seem like the

future, including NFC and frictionless payments is with us already.

Figure 14, taken from the Capgemini/RBS World Payments Report 2015, provides a

very useful graphical portrayal of the ‘New World’ payments ecosystem.

Source: World Payments Report 2015; Capgemini; RBS

In addition to the parties involved in the traditional four-party model, there are two

other parties commonly involved in the transaction process. These are:

Gateway providers; and, possibly

Independent sales organizations (ISOs).

Figure 15 shows a range of the key participants in each step of the evolving

payments ecosystem.

Source: www.mobileecosystemforum.com

Mobile payment means different things to different people. It can include an e-

commerce transaction completed on a mobile. Historically, mobile payment had its

roots in payment for digital games via carrier billing (on your mobile phone bill), and

this still is a significant part of the ecosystem.

However, we use the term contactless MPay here to apply to payment at the bricks-

and-mortar till. This can be effected in more than one way. Starbucks for example

has gained very significant traction using QR/barcodes and a scanner/barcode

reader.

Here, however, we focus on NFC-enabled contactless payment. The critical element

of security in mobile payment, seemingly controlled by the mobile network operators

(MNO’s), via a secure, MNO-controlled, SIM, has been circumvented by both Apple

(via their own – phone - embedded secure element and tokenisation) and

Google/Android (HCE – host card emulation and tokenisation).

Via its acquisition of LoopPay, Samsung hopes to steal a march in America through a

technology that enables contactless/tap-and-pay payment both at EMV/NFC-enabled

terminals and magnetic stripe terminals (the US is only now shifting to EMV/chip-and-

pin). Leading terminal solution provider Ingenico has gained significant traction

already in the US via its EMV expertise elsewhere, recently posting revenue gains of

over 100% in that territory.

Near field communication NFC establishes a radio connection with another device

when it is placed in close proximity to it. In order for this to work, both devices must

be equipped with an NFC chip, resulting in a contactless payment.

The mobile payments market is experiencing huge growth as a consequence of the

evolution and popularity of tablets and smart mobile devices. Statista estimate that

the global mobile payments market will more than double from 2014 to 2017 reaching

around $721bn in annual transactions (Chart 17).

Source: Statista, 2015

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According to the Adyen Mobile Payments Index in January 2015 iPhone overtook the

iPad in terms of relative share of mobile payments per device type. It is worth noting

that Android Mobile is growing at a consistent pace and as shown in Chart 18

smartphone payments take a larger share of payments than tablets.

Source: Adyen

It has been suggested that growth in the industry stems from consumer desire for a

multi-service channel which is threatening financial institutions and in particular their

control of payments. Consumers are looking for a one stop shop to see them through

their checkout experience. A service of this nature is able to take the user through the

entire checkout process without ever involving the consumer’s bank directly.

The contactless mobile payments market is still a new and emerging market. A

YouGov survey in June 2015 found that 47% of respondents did not want to use their

phone to make a payment. To be successful incumbents must provide a secure

seamless payment solution that addresses all consumer concerns including:

in the same YouGov survey it was found 81% of respondents

had concerns about the security of contactless mobile payments. These include

the security of bank and payment details being stored on smartphones open to

hackers and the risk that, if the phone is lost or stolen, information may fall into the

wrong hands.

the solution has to be easier and more

convenient to use than existing payment methods including: cash, credit/ debit

card (contactless, magstripe and chip and pin).

whilst smartphone penetration in the UK in 2015 is

c.72% according to Statista, mobile wallets are limited to specific smartphones

and operating systems. Older devices without fingerprint recognition technology

cannot be used to verify mobile wallet transactions.

many payment transactions using mobile wallets

have a maximum transaction size (eg.£20), therefore they cannot be used on all

purchases and an alternative payment method is required.

38% of young people in the YouGov survey thought that short

battery life made it an unreliable payment method.

iPhone overtaking iPad in mobile

payments

In the fourth quarter of 2014, Apple sold

nearly 75 million iPhones with fingerprint

ID capabilities

While the mobile payments market in terms of phones and tablets remains in the

early stages of exponential growth, the next generation of product has already

arrived in the form of wearables and accessories.

Examples include:

Apple Watch, a smartwatch which gives the user the functionality of an iPhone on

the wrist, including Apple Pay;

Swatch smartwatch launched in China in partnership with China UnionPay and

Bank of Communications;

FitPay and Connectedevice for Pebble Time range of smartwatches;

UK train operator c2c, which runs services for commuters from London to

Southend and Essex, is offering free Barclaycard bPay contactless payment

wristbands; and

TopShop x bPay range - UK fashion retailer TopShop has launched a range of

accessories, such as wristbands, key chains and smartphone cases, equipped

with Barclaycard’s bPay technology that enable shoppers to make tap and go

payments at any contactless terminal.

Source: www.wareable.com Source: Google Stock Images

Source: Google Stock Images Source: Google Stock Images

Source: www.nfcworld.com

Over the last 12 months or so, we have seen the launch of Apple Pay, Android Pay,

Samsung Pay as well as payments products from Amazon and Facebook. The

advent of new products has been driven, not least, by the advent of smartphone

technology and near field communications (NFC).

The entry of new players into the markets has accelerated the evolution of the

industry and is likely to continue to do so, not least due to their ability to act in more

than one capacity.

Growth of mobile point-of-sale (mPOS) could potentially have a huge impact on the

payments industry for both hardware and software. BI Intelligence forecasts that, by

2019, nearly 80% of US retailers will have implemented an mPOS device. The move

to mPOS will continue to put pressure on incumbent hardware providers as well as

ISOs that sell legacy devices to merchants.

In this context, it is interesting to see that Ingenico has undertaken a series of

acquisitions in the US this year, perhaps as a way of repositioning itself.

It seems clear that new entrants have already played a central role in bringing down

barriers to entry and are thereby threatening to bring the historical supernormal

returns to more normal levels.

However, it could be argued that the technology companies are looking at the bigger

picture, recognising the central position that payments plays in the economy and that

the merchant/consumer interface is one of the most critical points.

From an investor’s viewpoint, it is fair to ask whether recent entrants are looking to

provide a target rate of return or whether they are looking principally to cement a

market position. Clearly, in a rapidly-changing industry there is a need to retain a seat

at the table.

It is difficult to envisage how many industry winners there may be but it could well be

that the spoils go to a few, very large, winners.

The merchant/consumer contact is not just where a transaction is made, but where

data is collected, and where data and products can be delivered and much more

cheaply and conveniently than previously, via SaaS. These could range from internal

management information such as stock and accounting records to promotional and

marketing data for loyalty schemes and offers. The information can also be used to

link to delivery and logistics systems.

In order to identify potential winners, we see four central questions:

Does the product really offer any points of technological differentiation i.e. USP’s

and, if so, is there really any Intellectual Property? As BCG asks, does it provide

any real value to consumers and merchants?

Will it make money for the provider?

As BCG adds, is it scalable?

Does the provider own a meaningful customer base? Providers with a large

customer base, such as the techco’s, clearly start from a position of strength.

While a product that offers different technology or IP looks superficially attractive, it

could be straightforwardly that the winners stem from how many consumers a

company brings to the party. This would suggest that the long term winners will be

the digital/online giants, partnering with what seem for now important partners such

as card scheme majors and mobile network operators (MNO’s).

BCG identified in its report ‘Global Payments 2014: Capturing the Next Level of

Value’ three key steps:

Seeing Payments as a Platform, not simply as a product

Identifying Initiatives That Warrant Investment

Pursuing Multiple Paths

In our view, the BCG report provides a particularly valuable summary and therefore

reproduce the below, including Figure 24, verbatim.

The digitization of banking and overall retail commerce is driving innovation in

payments services. Mobile banking is enabling financial institutions to interact with

their customers as often as they like and to deliver new services in real time.

These capabilities are providing an unprecedented opportunity to improve

customer satisfaction and deepen relationships.

At the same time, technology companies are entering the payments space and

generating new sources of value by integrating payments into broader platforms

for merchants and consumers. These companies are engaging with their

customers on a daily basis and pushing their payments capabilities.

Incumbent players must figure out how to integrate their own payments services

into platforms that contain additional benefits. Examples include Simple, PNC

Bank’s Virtual Wallet, and BankAmeriDeals. If incumbents fail to act, they risk

being relegated to the back end of the process (as has been the case with

PayPal).

Financial institutions must evaluate numerous potential initiatives, including those

related to digitization, to find the ones that merit their attention and investment.

This endeavour is best approached using a framework that poses three key

questions. (See Figure 24).

Source: BCG

What is the impact on the institution’s economics? Players must determine

whether a particular initiative will have a positive impact, improve the economics of

certain customer segments, increase (or decrease) interactions, and create a new

revenue stream. The effects on risk and fraud exposure, along with the cost of risk

management, must also be considered.

Does it provide real value to consumers and merchants? Of course, the key

criterion here is whether the initiative truly eases a pain point or provides a better

value proposition, taking into full consideration how customer needs and

expectations are evolving outside of payments.

Does it scale? It is also critical to examine whether an initiative offers economies

of scale or a potential network effect. Part of the scale requirement is ensuring that

the product or service either fits with current consumer behavior or has a

sufficiently compelling value proposition to alter that behavior.

Once a bank identifies the right initiatives, it has to make tough choices regarding

which ones to pursue and whether to build or buy—or to seek partnership

arrangements.

Because digital payments solutions are still in a relatively nascent stage, banks

need to build their knowledge through smart experimentation. We encourage them

to participate in multiple initiatives and pursue both solo efforts and partnerships.

Indeed, a few banks are adopting a technology-company approach. One leading

institution, for example, is upgrading its mobile-banking platform every 100 days.

There is good reason to believe that profit margins of large incumbent players could

be under threat and this is already being witnessed by the introduction of the Single

Euro Payments Area (SEPA) and the regulation of interchange fees in Europe which

BCG estimates could lead to a loss of EUR 8 billion of revenue annually beginning in

2015.

As regards the impact of new entrants, Square and M-Pesa in Kenya, for example,

have introduced new products which have changed the landscape at the consumer

end of the chain. However, we acknowledge that the large tech companies provide

their own threat.

There is a clear risk that large incumbents are marginalised relatively quickly, as the

tech giants become either banks, financial services and payments companies or fill

those functions indirectly, with, very probably consolidated, large incumbents who

become their low-margin suppliers.

In the mobile space already there have been significant developments which look

negative for margins, as both Apple and Android Pay have used workarounds of the

MNO’s core (SIM) security ‘moat’, to effect security, and now, Google certainly,

seems to be exploring becoming a virtual mobile network operator using mobile

incumbents as a (non-coverage) infill.

Aggregating large numbers of consumers has potentially substantial power just in

reducing the number of parties in the payment transaction and processing system, a

system that already looks cumbersome given the digital revolution.

Arguably, it has been a greater challenge for payments processors with legacy

systems to keep pace, partly due to the scale and potential cost of changes and

partly due to the changing regulatory landscape which has had to address issues

such as internet payment security, mobile payment security and cyber security.

The recent suggestion that Apple is talking to the big banks with a view to creating a

common platform highlights that disruptors can work with incumbents in mutually

beneficial relationships.

Seemingly, the banks have suggested that Apple becomes the first non-bank

customer for ClearXChange, the platform owned by five of the largest US banks. This

makes a lot of sense per Tom Noyes' starpointllp.com blog, particularly given that

ClearXChange has a new owner, Early Warning Services, the leading bank risk and

fraud business.

However, there is always the risk that, having walked down the aisle, one party walks

away.

A contrasting example would be ChasePay where it is rumoured per starpointllp.com

that Chase has cut interchange fees and is creating a new acquiring model to drive

mobile volume but which, at present, appears to have one or two missing links in the

chain. This points to a model that needs volume gains in order to offset apparently-

clear margin pressures.

Given the strong reputation concerning trust and security that the banks have with

consumers, some banks, certainly those who have adopted fast payments, do have

an opportunity to simplify the system, and benefit accordingly.

This opportunity has existed for years, and little progress has been made - even the

most committed players have taken a very long time to get their act together (Sepa,

the Single Euro Payments Area, for example). There remains the risk that they will be

overtaken by events but, nevertheless, the opportunity exists.

Banks and providers can debate with each other and the regulators whether fees will

just move along the chain due to regulatory pressure on card interchange fees, for

instance, but this is unlikely to stem the impetus for change.

We are by no means saying that the disruptors will have things all their own way. The

recently-IPO’d First Data, for instance, provides a good example of a major

incumbent which has re-invented itself by creating additional revenue streams.

We can identify a number of additional revenue streams:

Additional products: Klarna, the Swedish e-commerce payments company, is able

to offer credit to US consumers without a credit card – by entering only their email

and zip code;

New markets: First Data, the leading US payments processor, has used its EMV-

friendly Clover product to launch The Station, a till replacement screen, in 2013 to

the SME market and over the past year has rolled out Mobile and Mini versions;

Marketing and advertising revenues: as exploited by Facebook and Google;

Data Analytics: this has become a key value creator and, for some, a panacea.

Again using First Data as an example, it has partnered with Palantir Technologies

to develop the Insightics product and Levelup using predictive modelling to batch

forecast payments; and

Operational products, such as inventory and accounts, as launched by

Intuit/Quickbooks.

Or, again, should we really be looking above those payment embedded products,

and to consumer aggregation, and then the products that derive from that? Are, for

example, P2P payment products, facilitated via social media, such as Facebook,

WhatsApp and WePay more important than those enhanced by it, such as Venmo

and PayPal?

Again, this raises the question of whether it is simply about the weight of numbers

and the power they give their operators in the payments ecosystem.

If contactless mobile really does take off, clearly it is likely to accelerate disruption

and change the balance of power, but we believe it is unlikely to be critical in itself.

Huge changes have already happened and will continue to happen regardless of

Apple Pay, or Android Pay, or Samsung Pay.

The US is by some distance the largest economy in the world. It has some of the

leading payments companies in the world, is home to the digital and tech majors, and

is home to numerous digital payment innovators.

Yet it is significantly behind the rest of the world in the adoption of EMV (chip-and

pin) and also in terms of fast payments.

EMV is short for EuroPay, MasterCard and Visa. EMV cards are chip & pin cards as

opposed to magnetic stripe cards.

From October 2015, there has been a watershed change and merchants which have

not implemented EMV standards will be liable for counterfeit fraud.

The regulatory push to address this has stemmed at least in part from a rise in fraud

which should be addressed by the introduction of EMV.

Regardless of how the US arrived at that point (most probably due to the large

number of banks in the US and fragmented nature of the market plus vested interests

of and lobbying by the major incumbents), the combination of innovation and

anachronism offers significant opportunities for digital innovators, as well as more-

established overseas companies with EMV expertise.

As well as the payment incumbents’ own solutions, this is bringing numerous newer

players to the customer interface, via cost-effective MPOS (mobile point of sale)

products. This poses a threat to the margins of incumbents given that those

companies include major digital disruptors, such as Amazon and PayPal, who are

creating a two-way squeeze as mobile payment encroaches on the other side.

Equally, the Federal Reserve has been pushing banks for faster payments for some

time, and the delay in dealing with the problem in a timely manner has perhaps

enhanced the level of threat from person-to-person payment (and onward to

merchant-to-peer, peer-to merchant), via chat apps and social media, which appear

to be gaining significant traction.

However, where banks, for example, have introduced faster payments systems, such

as in the UK, they have been able to put up reasonable resistance by utilising those

systems to deliver competing, and possibly more trusted, offers (Paym).

Source: EMVCo

Alongside the push to implement EMV standards, US regulators have been keen to

promote faster payments and the benefits of this are well-recognised in the payments

eco-system:

Per the Federal Reserve Bank of Boston: ‘… faster A2A payments could provide the

following benefits:

facilitate business-to-business (B2B) payments, which are still accomplished

largely by paper check;

facilitate mobile payments, a rapidly developing payments application;

improve payment security;

availability at all times (24/7/365), unlike clearing houses run by the Bank of

England or the Federal Reserve;

facilitate person-to-person (P2P) payments, which are typically handled by cash

and check in the United States; and

facilitate faster international payments using standards such as ISO 20022.’

Source: Federal Reserve Bank of Boston: Costs and Benefits of Building Faster Payment

Systems: The U.K. Experience and Implications for the United States; Claire Greene, Marc

Rysman, Scott Schuh, and Oz Shy.

And what of developing markets and global transactions? Does the opportunity justify

the required current product investment and, more importantly, investment directly in

those overseas territories?

Globalisation, global transactions and remittances have been significantly facilitated

by digital technology and online and mobile payments, with mobile banking and

payment offering a seemingly very significant opportunity in dispersed communities in

developing countries.

However, a one-size fits all approach works neither in developing countries (where

the successful mobile payment and banking model in Kenya, MPesa, perhaps

derived from a unique and fortuitous combination of factors), or developed countries

(German payment methods, for example, differ markedly from the UK’s, whilst the US

has a disproportionate usage of cheques and, at least to date, has been pretty much

wedded to the magnetic stripe as regards payment cards).

Rapid moves from cash to non-cash payment in developing countries as well as, until

recently, strong economic growth, has meant that the chase for assets taking place in

developed markets is mirrored in developing markets.

In many developing countries, government initiatives are helping promote the move

to electronic payment, and the arrival of not just smartphones, but the ability of even

very simple phones to offer internet access, is already having a noticeable impact,

both in terms of the questions raised and in actual products.

Governments can facilitate electronic payment not just from a regulatory perspective,

but, in countries where state control of industries is prevalent, also more directly

through themselves making and accepting payments electronically, from wages,

through taxes, to utility bills, probably more critical than many in the West might

imagine given often long treks to pay for electricity for example (simple carrier-billing,

payment via mobile phone bill, can have a significant beneficial effect in this regard).

Against those positives, whether intentional or not, government strategy and attitude

towards overseas competition blows hot and cold in by far and away the two most

significant economies for major payment incumbents within a reasonable time-frame

(China and, some considerable way behind, India).

Unsurprisingly, the evidence appears to suggest that both probably will continue to

favour incumbents - look at the mandatory offer by banks of a government-backed

debit card in India, for example.

Similarly, it should be remembered that recent acceptance of overseas company

card-clearing in China was actually the result of strong US pressure. However, it is

difficult to believe that China will stand by and let overseas companies gain a

meaningful part of the payments market, at least in terms of data collection and

usage. Furthermore, the possible requirement of domestic storage and servers, and

backdoor server access, has to raise obvious questions not least of all relating to

switch on/switch off.

Meanwhile, India’s focus on robust security and oversight is commendable, but it very

likely has had, and is having, negative unintended consequences, and slowing the

pace of change. India has introduced regulations that considerably hamper PayPal,

for example.

All of these factors constitute huge risks. For investors, a key takeaway from China in

particular is that they have developed, and are developing, their own huge

incumbents and innovators in the payments/ecommerce/mobile/tech/social

media/chat space (UnionPay, AliPay/Alibaba/Xiaomi/Tencent). They themselves

have big regional and global ambitions, have significant advantages in terms of

knowledge and acceptance as regards the former and are making strong moves as

regards the latter.

The example of RuPay in India is apposite.

RuPay is India’s own payment gateway, launched by Prime Minister Narendra

Modi as part of the Pradhan Mantri Jan Dhan Yojana (PMJDY) financial inclusion

scheme;

Just one year old, there are now around 190m RuPay cards in issue out of a total

of 580m debit cards in India, per the Hindustan Times (‘Plastic age: India's RuPay

breaks Visa and MasterCard's grip’ August 19, 2015), with 153m issued under the

Jan Dhan scheme;

With RuPay, fees paid by banks are lower than for international players such as

Visa and MasterCard;

The Indian Railway Catering and Tourism Corporation (IRCTC), India’s biggest e-

commerce site, has launched a RuPay pre-paid card that allows railway

passengers to book tickets, shop and pay service bills.

Similarly, the move of Alibaba into India cannot be ignored.

In September, Alibaba Group and associate Ant Financial, which operates AliPay,

became the largest shareholders of One97 Communications, the parent of the

Indian e-tailer Paytm by investing $680m;

Alibaba is understood to have taken a 20%, with Ant Financial’s stake falling to

just over 20%, in a deal which values Paytm at $3.4bn.

Alibaba also recently invested in Snapdeal, a competitor of Paytm but it looks as

though Paytm will be its main vehicle in India;

Paytm has more than 104m mobile wallet users.

And, at the same time, Tencent’s investment in Kik flags further competition for the

big incumbents.

In August, China’s Tencent invested $50m in Kik Interactive, the Canadian

messaging company, in a deal which valued Kik at more than $1bn;

Kik competes with Snapchat, Facebook’s Messenger and WhatsApp but Chief

Executive Ted Livingston is aiming to replicate the success of Tencent’s WeChat

in China.

Developed markets are much more significant in economic terms (China aside) and

likely to remain so for some considerable time.

Regardless, investors always need to look at Return on Investment, and at current

valuations against likely longer term valuations.

So, in relative terms, investment at home might well offer a greater and safer return,

but even if it does, do those returns outweigh selling the business out now, while bids

are good and operating margins remain high or simply distributing cash to

shareholders in the face of probable declining returns, especially as the card

schemes and processors face not only the threats from techco’s and others outlined

above, but also from each other.

This may be particularly the case as the card scheme majors move into other parts of

the payments industry and face ongoing pressure from the power of the retailers. The

US retailers’ own payment initiative has run late, and has possibly been surpassed

due to that delay by technology, but major retailers pose another significant threat in

that they are now so large that they can, and do, move suppliers, which can have a

significant impact on revenues - American Express lost Costco, but won Target, while

Citi/Visa won Costco.

Retailers also face threats themselves. While their attitude is positive as regards

reducing the power of the payment incumbents, retailers have been somewhat

resistant in the face of those incumbents being superseded by a possibly larger

threat, especially given Apple’s initial seeming reluctance to incorporate loyalty

schemes or loyalty cards.

They very definitely recognise the existing and real threat of Amazon’s arrival in the

bricks-and-mortar space (via MPOS), and this entry at the smaller end of the market

is reflected in the resistance they initially showed to Apple, and their probable

preference for Android (open platform, more users). However, if mobile contactless is

broadly adopted, the power will very likely be with the techco’s, and recent

substantial retail adoption of Apple Pay in the US points one way.

Many of the above considerations face all companies across the industry, and

adjacent industries, but investors in early-stage innovators, or even seemingly well-

established, and sometimes quoted, innovators need to be especially wary.

Digital currencies, and Bitcoin in particular, have had a mixed press but the

underlying blockchain technology is now gathering momentum as a potential game-

changer for the settlement of transactions in financial services with a significant

number of global banks supporting the creation of a common platform.

Digital currencies are internet based mediums of exchange that enable

instantaneous transactions and cross border transfer of ownership. They display

similar characteristics to physical currencies, but provide an alternative for online

purchases and borderless transfer of ownership. Digital Currencies can either be

cryptocurrencies or non-cryptocurrencies:

Cryptocurrency is an alternative digital token that uses cryptography to secure

transactions and the creation of new units. It can be used as a medium for

exchange and importantly is decentralised, having the ability to operate

independently of a central bank. According to mapofcoins.com there are over 740

cryptocurrencies in issue, 669 of which are available to trade in online markets

and the most famous of which is the Bitcoin.

Non-Cryptocurrency is a centralised digital currency. Very few examples exist and

remain in active use. These include Ven, used as a medium of exchange on the

social network Hub Culture, whose value is linked to currencies, commodities and

carbon futures.

A Bitcoin is a cryptocurrency that can be used as a peer-to-peer electronic

payment method, with each Bitcoin consisting of 100 million smaller units called

satoshi. It was created in 2009 by Satoshi Nakamoto who invented the Bitcoin

protocol. It does not rely on a centralised issuing body to operate as its value is

created by users. Bitcoins are created by computer operations with their value

arising from computer power. Bitcoin ‘miners’ create a block after a period of time

that is equivalent to 25 Bitcoins.

Bitcoins can be purchased via exchanges or directly from individuals in the

marketplace and can be paid for using a number of different methods including

credit/debit cards, bank transfers, alternative cryptocurrencies and even physical

cash. Bitcoin exchanges include:- Mt.Gox, which is at present the largest bitcoin

exchange, CoinSecure, Coinfloor and Cryptsy.

Bitcoins can be stored in the following formats:

Desktop Wallet – Installed wallet is stored on computer as a file. Eg. Bitcoin Core,

Hive and Bither;

Mobile Wallet – Smartphone apps that store Bitcoin allowing purchases directly

with a mobile device. Eg. Xapo, CoinPunk and Aegis;

Online Hosted Wallets –Stored on a computer controlled by someone else that is

connected to the internet and allows Bitcoins to be accessed anywhere. Eg.

Coinbase, Strongcoin and Circle;

Hardware Wallets – dedicated devices that can hold private keys electronically.

Eg. Trezor, KeepKey and Ledger USB Nano; and

Paper Wallets - Bitcoins also have the ability to be stored physically in paper

format, by generating 2 QR codes – one for receiving Bitcoins and one for

spending them. Eg. Bitcoinpaperwallet.com, BitAddress and LiteAddress.

The blockchain is a chronological record of the transfer of ownership of digital assets

and is most commonly associated with the cryptocurrency Bitcoin. A blockchain is

built by recording every transaction as a ‘block’ or file of data and incorporating a

computer code referring to the preceding block to create a permanent string of

records. The blockchain is an immutable distributed ledger that cannot be altered

making it highly transparent and unable to be used for fraudulent purposes.

Source: www.intelligenthg.com

Bank of England Chief Economist Andrew Haldane recently cited blockchain

technology as an imaginative solution to solving this issue of establishing trust in

monetary economics, with the distributed payment technology embodied in bitcoin

having real potential.

Blockchain has the potential to be a highly disruptive technology due to ability to

eradicate extensive back-office bank payment networks, significantly reducing costs

through payment ledger automation.

The World Economic Forum (WEF) has identified blockchain technology as one of its

six mega-trends in a new report in which those surveyed believe the "tipping point"

for government use of the blockchain will occur by 2023. In turn, the survey

suggested bitcoin and the blockchain would reach a "tipping point", or a point at

which it becomes broadly adopted, by 2027.

http://www.intelligenthg.com/

More recently it was announced that a number of the world’s largest investment

banks including JP Morgan, Goldman Sachs and Credit Suisse are collaborating to

develop common standards for blockchain technology to broaden its use across

financial services.

In theory, because blockchain is a transaction database, anything can be stored on it

and it has numerous applications. Due to its transparency and proof of fairness it can

be used in lotteries, accounting audits to verify ownership of assets, medical records

and for land registry purposes.

While it seems clear that there is the potential for blockchain-based technology (and

not necessarily crypto-currency) to become the basis of the payments market,

including micro payments, interest from large payment players does not necessarily

indicate ‘belief’. Many moves by large incumbents are easily misread – what seem

like large investments to smaller companies often are effectively just minor

explorations/tests for majors, to be dropped once a development proves ineffective.

Even if crypto-currency or, more probably, blockchain, takes off, small innovators

could well (likely would?) be rapidly overtaken by incumbent adopters with greater

traction in terms of customer (consumer and merchant) numbers.

Like other areas of financial services, regulation of the payments sector has become

more complex.

Key elements of regulation include:

National regulators;

The EU;

The Single Euro Payments Area (SEPA);

The EU’s Payment Services Directive (PSD2) which is expected to come into

force in 2017;

In the UK, the new Payment Systems Regulator (PSR). The PSR is a subsidiary of

the Financial Conduct Authority (FCA) and the new economic regulator for the £75

trillion payment systems industry in the UK. It was launched on 1st April 2015;

In the US, federal, state and local laws; and

Payment scheme memberships such as Visa Europe, MasterCard International

Inc and JCB International Co Limited.

At its heart, regulation is designed to create a legal and orderly workable market but,

in developed markets, it has also focused on anti-competitive practices and, vitally,

security.

BCG has described a ‘regulatory tidal wave’ in the US and two waves in Europe: the

first being the Single Euro Payments Area (SEPA) and the second being limits on

interchange fees.

Interchange fees are the card transaction fees earned by issuing banks. These have

been under examination for some years but there is now regulatory pressure to re-

distribute fees more fairly along the chain and the EU Interchange Fee Regulation

(EU IFR) came into force on 8 June 2015.

Chart 27 shows a very helpful fan of Regulatory initiatives with the likely timeframe on

the X-axis.

The initiatives are divided into four strands:

Risk reduction;

Standardisation;

Competition; and

Transparency.

Quite simply, the volume of initiatives in progress highlights the complexity of

regulating the rapidly-evolving payments market.

Source: World Payments Report 2015; Capgemini; RBS

While 2015 saw a continued steady stream of exits in the payments sector, we have

seen a clear pick-up in the number and, particularly, in the size of IPO’s.

Per CB Insights, overall, 2014 saw 22 exits, only one of which was an IPO. Since

2010, there have been 87 total exits in the payments space, and only seven of them

were IPOs, including QIWi, which raised $884m and Xoom, which raised $509m in its

IPO, both in 2013.

We give below a selection of the key deals in 2015.

Revenue 2014 proforma ~ $697m;

Market Cap ~ £1,651m;

Valuation ~ Market Cap/Revenue 3.6x;

Terms of deal ~ Enterprise Value of Skrill EUR1.1 billion funded via a 5 for 3

Rights Issue at 166p to raise £451m plus cash and net debt of Skrill of EUR256m;

Revenue 2014 ~ $8,025m

Market Cap ~ $43,064m


Revenue 2014 ~ £3,627m

Market Cap ~ £5,280m


IPO details ~ 900m shares at 240p to raise £2,073m for 45% of the Company

giving a Market Cap of £4,800m.

Revenue 2014 ~ $11,200m;

Market Cap ~ $13,260m;

Valuation ~ Market Cap/Revenue 1.2x

Consideration up to $21bn in cash & stock, $18.2bn up-front;

Visa Europe is the largest card network in Europe;

500 million cards, issued by 3,000 financial partners in 38 countries;

Processed €2 trillion ($2.2 trillion) in payment volume from 35 billion transactions

in 2014;

Visa Inc. 2.3m card accounts that made 82 billion transactions worth $4.7 trillion

the same year.

Revenue 2014 ~ $850m;

Share Price at IPO $9 a share;

Raised $279m;

Market Cap ~ $3,900m or fully diluted $5,500m;


CEO is Jack Dorsey, also CEO of Twitter;

Major shareholders: Jack Dorsey 24.4%; Khosla Ventures 17.3%;

Merchant acquirer focussed particularly on SME sector.

Global Payments Revenue 2015 ~ $2,770m;

Global Payments Market Cap ~ $9,235m;


Offer values Heartland Payment Systems at $100 per share or $3,675m;

Offer comprises 0.6687 Global shares and $53.28 in cash per Heartland share, a

17.5% premium;

Heartland Payments Systems Revenue 2015 ~ $2,311m;

Valuation ~ Market Cap/Revenue 1.6x.

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In this section we profile a selection of the major players in the payments industry.

We provide for each:

Business Description

Revenue Breakdown, where available

By Division; and

By Geography

Recent Operational Highlights

Key Financial Highlights

Recent Financial History

The companies covered in this section are:

ATOS

Cielo

Earthport

First Data

Fiserv

Gemalto

Global Payments

Ingenico

MasterCard

Paysafe

PayPal

Proxama

Safecharge

Square

Vantiv

Verifone

Visa

Western Union

Wirecard

Worldline

Worldpay

Atos SE (Societas Europaea) is a leader in digital services with 2014 pro forma

annual revenue of around € 11 billion and 93,000 employees in 72 countries. Serving

a global client base, the Group provides Consulting & Systems Integration services,

Managed Services & BPO, Cloud operations, Big Data & Cyber-security solutions, as

well as transactional services through Worldline, the European leader in the

payments and transactional services industry.

The Group works with clients across different business sectors: Defense, Financial

Services, Health, Manufacturing, Media, Utilities, Public sector, Retail,

Telecommunications, and Transportation.

Atos is focused on business technology that powers progress and helps

organizations to create their firm of the future. The Group is the Worldwide

Information Technology Partner for the Olympic & Paralympic Games and is listed on

the Euronext Paris market. Atos operates under the brands Atos, Atos Consulting,

Atos Worldgrid, Bull, Canopy, and Worldline.

This division accounted for 51% of Group revenue in 2014. The core business is a

range of outsourced contracts across a spread of industries including Manufacturing,

Retail & Transportation, Public & Health, Telcos, Media & Utilities and Financial

Services. Clients include Siemens, the French State railway, the DWP and NS&I in

the UK, Microsoft and McGraw-Hill.

Key geographies include the UK, Germany, France, Benelux & The Nordics, Central

& Eastern Europe as well as Iberia and North America.

Price (EUR) 74.2

Market Cap (EUR m) 7667.0

Source: Bloomberg

Holder % Holding Siemens 12.1 Blackrock. 5.1 Fidelity 2.1 Vanguard 1.7 Norges 1.5 Source: Bloomberg

Thierry Breton CEO Elie Girard CFO Phillipe Llorens CEO: Canopy Adrian Gregory CEO: UK & Ireland Source: Bloomberg

This area represented 35% of Group in 2014. Key sectors and geographies are as

per Managed Services. Clients include Nokia, Transport for Greater Manchester, AIG

and LCH Clearnet.

Created as part of the Bull integration in September 2014, this division accounted for

3% of revenue in 2014 but will be correspondingly larger on a proforma basis.

Revenue growth in 2014 was driven by the Big Data practice based on strong activity

in High Performance Computing (HPC), with sales in Germany to the Climate

Computing Center and in Benelux & The Nordics to Dutch Universities, and with

sales of the newly launched bullion machine to French public organizations.

Customer demand in the Security has been boosted strongly particularly for

encryption and access management solutions.

Separately-quoted Worldline is a full service payment processing services provider

which is 73% owned by Atos and accounted for 12% of Group revenue in 2014.

Worldline’s activities encompass 1) Services & Terminals including Commercial

Acquiring, Private Label Cards & Loyalty services, and Online services; 2) Financial

Processing & Software Licensing including Online Banking Services and Payment

Software Licensing; 3) and Mobility & e-Transactional Services, including e-Ticketing

and e-Government Collection.

In 2014,Worldline renewed all its major processing contracts, notably in Germany

and in Belgium and strengthened its European leadership position in e-wallet

processing with contracts signed with Paylib in France, BCMC and Sixdots in

Belgium, and Sparda-Bank in Germany (Masterpass). Worldline also won deals

contracts in the fourth quarter, including a contract with EDF in France for multi-

channel solutions.

Source: Bloomberg Source: Bloomberg

16 Dec 2015 - Atos signs contract in Spain to supply license plate recognition

services for border control

04 Dec 2015 - Atos launches Personal Financial Management as a Service

05 Nov 2015 - Atos launches new Anti Money Laundering and Fraud Analytics

service

03 Nov 2015 – Partnership agreement between Atos and the BRGM (French

Government Geological Survey)

03 Nov 2015 - Atos to acquire Unify from Gores and Siemens

28 Sept 2015 – Atos and Airbus Defence and Space sign a strategic agreement in

the field of cyber security

23 Sep 2015 – Atos launches new Advance Malware Detection and Remediation

Service

22 Sep 2015 – Atos signs a major smart meeting contract with EPS – leading

electricity provider in Serbia

30 June 2015 – Atos completes the acquisition of Xerox ITO.

17 June 2015- Siemens awards Atos contract to provide a platform built on SAP

HANA and based on the bullion Server for a range of digital services

11 June 2015 – Atos acquirers software solutions for IT monitoring

1 June 2015 - Atos Partners with Digital Guardian to launch new Cloud-based

Data Loss Prevention Service

9 June 2015 – Big Data: new synergy between Atos and Bull

In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 6458.3 6718.3 - Cash & Equivalents 1306.2 1620.3 + Preferred & Other 30.0 208.8 + Total Debt 400.8 631.2 Enterprise Value 5582.9 5938.0 Revenue 8614.6 9051.2 10768.4 11566.7 Growth %, YoY (2.6) 5.1 19.0 7.4 Gross Profit -- -- 10768.4 11566.7 Margin % -- -- 100.0 100.0 EBITDA 1024.6 1074.6 1191.3 1348.2 Margin % 11.9 11.9 11.1 11.7 Net Income 444.2 449.9 577.0 666.7 Margin % 5.2 5.0 5.4 5.8 EPS 4.6 4.5 Growth %, YoY 12.0 (3) Cash from Operations 595.6 640.4 Capital Expenditures (340.0) (354.1) (417.8) (461.6) Free Cash Flow 255.6 286.3 417.1 527.8

Source: Bloomberg

Source: Bloomberg

Cielo is no.1 in Brazil in merchant acquiring and payment processing in terms of

credit and debit card transaction volume. It has around 1.6m active merchants and is

present in the vast majority of Brazilian municipalities.

Established in 1995 with the name Visanet Brasil by Bradesco, Banco do Brasil,

Banco Real and Banco Nacional, along with international card network Visa.

IPO’d in 2009 and established numerous partnerships with financial institutions and

card networks in the country over the years.

From July 1, 2010 VisaNet was renamed Cielo and was no longer the only processor

of Visa cards in Brasil, following a change in regulation by the Brazilian government

whereby its main competitor, Rede, was allowed to process Visa cards, and Cielo

was allowed to process MasterCard, Diners Club and other cards which were only

processed by Redecard. Cielo also processes for Elo, a national network established

by Brazilian banks.

Cielo states that its systems processed the equivalent of 9.3% of the Brazilian GDP

in 2013, processing 5 billion transactions.

Services encompass not only point of sale card machines but also e-commerce

payment solutions and mobile device platforms designed for small businesses.

Price (BRL) 34.6

Market Cap (BRL m) 69071.1

Source: Bloomberg

Major Shareholders

Holder % Holding

Columbus 28.7 BB Bco De Investimento 28.7 Lazard Ltd 4.2 Tempo 1.4 Tempo 1.4

Source: Bloomberg

Romulo De Mello Dias CEO Clovis Poggetti Jr CFO Source: Bloomberg

13 October 2015 – Cielo European Recruitment Centre opens in Bucharest;

August 2015 Acquires 91% stake in M4U

10 August 2015 – Kami Bond joins Cielo as SVP of People and Culture;

June 2015 Acquires 30% stake in Stelo

17 June – Christian Scandella joins Cielo as Senior VP of Latin America;

5 May 2015 – Cielo Extends Partnership with Aglient Technologies into Asia

Pacific market;

6 April 2015 – Cielo expands Cielo Mobility Services in Middle East and Africa;

5 February 2015 – Seb O’Connell joins Cielo as MD of Europe

November 2014 Acquires 70% stake in Cateno cards JV with Banco do Brasil

July 2014 Announces Partnership with Smiles

In Millions of BRL FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 51562.1 65031.7 - Cash & Equivalents 423.1 3998.7 + Preferred & Other 12.1 15.3 + Total Debt 2488.5 7339.7 Enterprise Value 53639.5 68388.1 Revenue, Comparable 6734.2 7725.6 11640.9 13043.3 Growth %, YoY 24.1 14.7 50.7 12.0 Gross Profit 4184.6 4675.0 6775.0 7721.6 Margin % 62.1 60.5 58.2 59.2 EBITDA 3575.2 3838.9 5827.2 6514.6 Margin % 53.1 49.7 50.1 49.9 Net Inc, Comparable 2673.6 3219.8 3781.5 4242.6 Margin % 39.7 41.7 32.5 32.5 EPS, Comparable 1.4 2.0 2.0 2.2 Growth %, YoY 15.2 37.7 1.1 12.0 Cash from Operations 1999.5 1834.6 Capital Expenditures (91.0) (673.4) (686.1) (777.3) Free Cash Flow 1908.5 1161.2 4705.6 2252.3

Source: Bloomberg

Source: Bloomberg

Earthport offers an innovative payments framework, which is specifically designed for

high volumes of low value cross-border payments, including, but not limited to:

commercial trade transactions, pension payments and accounts payables.

Earthport’s infrastructure allows clients to clear and settle payments directly to

banked beneficiaries in over 60 countries, in an automated clearing house (ACH) like

motion. Due to its connection with local clearing capabilities across six continents,

Earthport is able to facilitate a lower cost service for money transfer companies and

more competitive remittance products.

Bank of America and BB&T use Earthport’s payments services for trade, pension and

remittance payments. Earthport is able to clear these payments through a network of

banking partners including Barclays, Bank of America, Maybank, SEB and Standard

Bank.

In relation to e-commerce, Earthport is able to offer itself as the sole provider of the

commercial agreement, with one technical connection, which can be used to send

payments to multiple locations in practically any currency. Payoneer and

hyperWALLET already use Earthport for their direct-to-bank e-commerce payments.


12

5

1 1

United Kingdom

North America

Rest of the World

Rest of Europe64%

24%

6% 6%

United Kingdom

North America

Rest of the World

Rest of Europe

Price (GBp) 34.8

Market Cap (GBP m) 164.5

Source: Bloomberg

Holder % Holding Massmutual Financial Group 10.4 Henderson Global Investors 8.0 International Finance Corp 7 Norges Bank 6.5 Schroders Plc 6.2 Source: Bloomberg

Hank Uberoi CEO Christopher Cowlard COO Sajeev Viswanathan Global Strategy Daniel Marovitz President, Europe Source: Bloomberg

12 Jan 2016 – Earthport announces further expansion of its growing capabilities

with the launch of its Distributed Ledger Hub.

17 Nov 2015 - Continental Money Transfer teams up with Earthport Payment

Network for East Africa Payments

10 Sep 2015 - Japan Post Bank chooses Earthport Payment Network to provide

cross-border

18 August 2015 – Earthport announces that it has launched its first fully compliant

gateway to provide Real Time Payments via distributed ledger. Earthport

partnered with Ripple Labs, the creator and a developer of the Ripple payment

protocol and exchange network.

11 August 2015 – The Company announced an agreement to enable cross-border

services for Japan Post Bank, Japan’s largest retail bank in terms of deposits. This

partnership will provide improved customer experience and reach for cross border

consumer remittances.

6 August 2015 – Earthport announced ‘CurrencyFair,’ the peer-to-peer currency

exchange company, signed as a new client. This follows the signing of

TransferWise, Fexco Pacific, WorldRemit and BEO Group in the last 12 months.

30 July 2015 – Earthport announced that it had been selected by ‘Stripe’, the

online payments platform to provide foreign currency payment services in selected

markets.

28 July 2015 – Earthport announced Singapore as its new regional base in Asia.

The new office was chosen with the intention of providing a physical base in

Singapore as a FinTech hub for the region, supporting further expansion in

emerging trading nations across South East Asia.

22 July 2015 – The Company highlighted that it had gained 31 new customers in

2015, with 22 customers going live in 2015.

09 Dec 2014 - Standard Chartered Chooses Earthport for Global Payments

In Millions of GBP FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 06/30/2014 06/30/2015 06/30/2016 06/30/2017 Market Capitalisation 169.9 181.0 - Cash & Equivalents 9.5 30.2 + Preferred & Other 0.0 0.0 + Total Debt 0.3 0.0 Enterprise Value 160.8 150.8 Revenue, Comparable 10.8 19.3 30.0 48.0 Growth %, YoY 161.2 78.1 55.7 60.0 Gross Profit 8.6 15.7 Margin % 79.2 81.3 EBITDA (2.3) (5.3) 2.3 12.8 Margin % (21.7) (27.7) 7.8 26.7 Net Inc, Comparable (6.8) (9.0) Margin % (62.8) (46.5) EPS, Comparable (0.0) (0.0) 0.0 0.0 Growth %, YoY 15.0 (11.8) 94.7 Cash from Operations (4.4) (2.9) Capital Expenditures (0.2) (0.8) Free Cash Flow (4.6) (3.7)

Source: Bloomberg

Source: Bloomberg

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First Data’s services enable businesses to accept electronic payments, help financial institutions issue credit, debit and prepaid cards, and assist in routing secure transactions between merchants and customers.

First Data has three primary lines of business:

Global Business Solutions (GBS) which provides retail point-of-sale (POS)

merchant acquiring and eCommerce services as well as next-generation offerings

such as mobile payment services, webstore-in-a-box solutions, and the cloud-

based Clover point-of-sale operating system, which includes a marketplace for

proprietary and third-party business apps.

Global Financial Solutions (GFS) provides credit solutions for bank and non-bank

issuers. These include credit and retail private-label card processing within the US

and international markets, as well as licensed financial software systems, such as

the VisionPLUS bank processing application, and lending solutions. GFS also

provides financial institutions with a suite of related services including card

personalization and embossing, statement printing, client service, and remittance

processing.

Network & Security Solutions (NSS) provides a wide range of value-added

solutions sold to clients of GBS and GFS, smaller financial institutions, and other

clients. These solutions include electronic funds transfer (EFT) network solutions,

such as the STAR Network, debit card processing solutions, stored value network

solutions, such as Money Network, ValueLink, Gyft, and Transaction Wireless,

and security and fraud solutions, such as TransArmor and TeleCheck. This

segment also supports other digital strategies, including online and mobile

banking, and business supporting mobile wallets.

Globally, First Data believes it is:

The no.1 merchant acquirer; and

The no.1 issuer processor;

It operates in 36 countries and has clients in 118 countries.

First Data believes it has the industry’s largest network of bank partnerships for

merchant acquiring, including equity alliances with eight large banks around the

world and over 80 revenue sharing partnerships. Bank partnerships include Bank

of America Corporation, Wells Fargo, The PNC Financial Services Group,

Price (USD) 14.6

Market Cap (USD m) 13110.4

Source: Bloomberg

Frank J Bisignano CEO Joseph J Plumeri II Vice Chairman Guy Chiarello President Thomas Higgins Exec VP/CAO Christine Larsen Exec VP/COO Source: Bloomberg

Winslow Capital Management Inc 14.6 Citadel Advisors LLC 5.3 EJF Capital LLC 5.3 Goldman Sachs Asset Management 1.3 Source: Bloomberg

Citigroup, SunTrust Banks, Lloyds Banking Group, Allied Irish Banks, ICICI Bank,

and ABN AMRO Group.

The Company has a large direct sales force, and partners with over 1,100 third

parties who actively re-sell its solutions, including independent sales agents,

independent sales organizations (ISOs), payment services providers (PSPs),

independent software vendors (ISVs), and value-added resellers (VARs) who

often have specialized sales capabilities to reach into local communities, small

businesses, eCommerce channels, or specific industry verticals. It also has over

1,600 referral arrangements with bank and non-bank partners.

For GFS, First Data has a large direct sales force and reaches a broad base of

smaller financial institutions through group service providers (GSPs).

For NSS, it leverages the distribution platforms of GBS and GFS, and also

distributes through a direct sales force.

Over last three years, First Data has acquired six commerce-focused technology

start-ups: Clover, Perka, Gyft, SpreeCommerce, EasyWay Ordering, and

Transaction Wireless.

Clover is an open-architecture tablet-based integrated POS system aimed at the

SME market;

Insightics is a cloud-based analytics solution using big data behind payment

transactions for the SMB market;

TransArmor is an encryption and tokenization solution for business owners;

The acquisitions of Gyft and Transaction Wireless significantly increased

capabilities in the issuance and distribution of virtual cards.


16 November 2015 - First Data and NCR Sign Strategic Commercial Agreement

15 October 2015 – First Data list on the NYSE;

1 October 2015 – First Data announces the launch of its Initial Public Offering

23 September 2015 - First Data and Pivotal Team Up to Deliver Simple and

Secure Payment Services to Spring Developers

17 September 2015 – Himanshu Patel appointed CFO of First Data;

20 July 2015 – First Data files registration statement for proposed Initial Public

Offering;

08 June 2015 - First Data to Support Launch of Apple Pay in the UK;

03 June 2015 - First Data Announces New $1.25 Billion Revolving Credit Facility;

5 February 2015 – First Data and Capgemini form Global Alliance to Deliver Next

Generation Payment Solutions;

4 February 2015 – First Data receives Data security approval from UK information

Commissioner’s Office

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- -- - Cash & Equivalents 425.3 358.4 + Preferred & Other 3251.5 3170.1 + Total Debt 22703.1 20872.2 Enterprise Value -- -- Revenue, Comparable -- -- 11377.0 11741.0 Growth %, YoY -- -- 3.2 Gross Profit 4158.7 4469.8 Margin % -- -- EBITDA 2390.5 2615.8 2619.0 2933.5 Margin % -- -- 23.0 25.0 Net Inc, Comparable -- -- 834.0 1214.0 Margin % -- -- 7.3 10.3 EPS, Comparable -- -- 0.5 1.2 Growth %, YoY -- -- 151.6 Cash from Operations 672.7 1013.2 Capital Expenditures (194.1) (308.0) (280.0) (360.0) Free Cash Flow 478.6 705.2 922.0 1246.0

Source: Bloomberg

Source: Bloomberg

Fiserv is a global provider of financial services technology. Its operations consist of

payments products and financial institution services. It is active in a broad range of

areas including e-payments, card-based transaction processing, ACH transaction

processing, account-to-account transfers and person-to-person payments, internet

and mobile banking systems.

ACH Solutions – Automated Clearing House solutions from Fiserv are intended

to increase efficiency and handle easily ever-increasing transaction volumes. Their

solution offers real time online access, automated settlement, multi-institutional

processing as well as risk mitigation tools.

ATM Solutions—Fiserv provides ATMs and card payment solutions to more than

3,200 financial institutions. Fiserv also offers total management and operations

support focused on the management of ATM networks.

Bank Platforms – Fiserv offers bank platforms around the world, and more than

one in three US banks operates on a Fiserv platform, including the Premier Bank

Platform which is used by more US financial institutions than any other account

processing platform.

Biller Solutions – Biller Solutions from Fiserv allow users to manage their bills

and payments when, how and where they want. It also lets them meet their

customers via their preferred billing and payment channels (mobile, online, phone,

in-person or mail)

Card Solutions – Card solutions from Fiserv provide complete debit, credit,

prepaid and ATM payment services to financial institutions as well as Accel, a

premier payments network. Case Management & Resolution – Fiserv offer case management, dispute

resolution systems and exceptions management technology for all payment

options

Credit & Debit Solutions - Fiserv offers an integrated, full-service credit card

management solution using a globally recognised processing platform and also

debit card processing services for Visa Debit, Debit MaterCard and Discover Debit

via the Accel debit payments network

Credit Union Platforms – Fiserv maintains one of the most complete portfolios of

account processing systems

Price (USD) 88.2


Source: Bloomberg

Holder % Holding T Rowe Price Associates 15.2 Vanguard Group Inc. 8.5 Blackrock 5.7 FMR LLC 4.3 State Street Corp 4.3 Longview Partners 3.6 Massachusetts Financial Services 3.3 Source: Bloomberg

Jeffery W Yabuki President/CEO Lynn S McCreary Chief Legal Officer Mark A Ernst Exec VP/COO Source: Bloomberg

Mobile Solutions – Fiserv offers a vast range of mobile banking , database

access and payment solutions, including Mobiliti for community banks and credit

unions which is available as an Application Service Provision (ASP) or Software

as a Service (SaaS) product and SpotPay which enables small businesses to

accept credit and debit mobile payments anywhere using a secure card reader

attached to iOS or Android mobile devices

Prepaid Solutions- Fiserv offer prepaid cards carrying the Visa or MasterCard

brands. Customers can acquire new accounts and generate year-round fee

income

Remittance Solutions – offering solutions that can help institutions to enhance

customer relationships and grow fee-based revenues and deposits

Treasury Management – designed to address the management of cash and

assets globally via a customer-centric solution which helps to increase operational

efficiencies while eliminating unnecessary capital expenditures, reducing costs

and improving and minimising losses through fraud

Walk-In Solutions – CheckFreePay has nearly 25,000 walk-in payment centres in

50 states in the US which allow customers to pay their bills in cash, in person.


-1,000 0 1,000 2,000 3,000

Payments

Financial

Corporate and Other

4,219

847

United States

International

3 November 2015 - Fiserv and Early Warning Partner to Enable Real-Time Bill

Payment and Real-Time Deposit Services for U.S. Financial Institutions

6 October 2015 – 1st Advantage Federal Credit Union adds Mobiliti, Popmoney

and Mobile Source Capture to their offerings

21 September 2015 – InfoLink Services Ltd selects Fiserv as its single technology

partner for payment transaction processing

15 September 2015 – Introduces new AML compliance solution for the casino and

gaming industry

14 September 2015 - Successfully Pilots CardFree Cash at ATMs Via Accel Debit

Payments Network

4 March 2015 - Fiserv Delivers Four New Solutions for Financial Crime Risk

Management Platform

26 January 2015 - Introduces LoanLaunch to help lenders originate and close

more loans, more efficiently

15 January 2015 - Partners with HedgeACT, a hedge fund asset management

platform, to provide access to Hedge Funds in managed accounts

14 January 2015 - Launches mobile card management application

30 October 2014 – Fiserv launches Popmoney® for disbursements streamlining

payments from businesses to consumers

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 15158.1 17054.1 - Cash & Equivalents 400.0 294.0 + Preferred & Other 0.0 0.0 + Total Debt 3848.0 3803.0 Enterprise Value 18606.1 20563.1 Revenue, Adj 4814.0 5066.0 5290.7 5594.4 Growth %, YoY 8.5 5.2 4.4 5.7 Gross Profit, Adj 2078.0 2185.0 2349.1 2750.6 Margin % 43.2 43.1 44.4 49.2 EBITDA, Adj 1557.0 1648.0 1772.6 1894.4 Margin % 32.3 32.5 33.5 33.9 Net Income, Adj 658.0 717.2 929.8 998.8 Margin % 13.7 14.2 17.6 17.9 EPS, Adj 2.5 2.8 3.9 4.3 Growth %, YoY 15.7 14.8 36.1 12.2 Cash from Operations 1039.0 1307.0 Capital Expenditures (236.0) (292.0) (316.6) (289.7) Free Cash Flow 803.0 1015.0 1015.8 1098.0

Source: Bloomberg

Source Bloomberg

Price (EUR) 51.3


Gemalto is a world leader in digital security, offering software applications and secure

devices to their clients (comprised of companies and governments). Their clients are

thus able to offer personal mobile services, payment security, authenticated cloud

access and many other services.

Gemalto’s clients come from over 180 countries and are comprised of over 30,000

enterprises, 450 mobile operators, and over 3,000 financial institutions. Some of their

most well-known clients include Banco Santander, China Mobile and Audi as well as

the governments of Algeria, South Africa and The Netherlands. The digital safety

software is developed and installed in a diverse range of products, including SIMs,

the payment cards and eID documents and others that are used to access digital

services.

In payments, Gemalto have created many products all using EMV as the underlying

technology. Their mobile products include Contactless MicroSD, The Contactless

MiniTag and The Contactless Sticker.

Contactless MicroSD - To use this product, a personalized Secure Digital card is

inserted into the mobile phone. The user is then required to download the branded

application associated with the mobile phone. This product can be used with many

of the most prominent mobile phone brands including HTC, Samsung, LG,

Motorola and Sony. This product is targeted at financial institutions, and enables

the client to own the entire mobile payment solution.

Contactless MiniTag –A product for mobile payments consisting of a tag worn

often as a watch. It is marketed as a way to pay without having to use a plastic

card, and is promoted as being more versatile than other mobile payment

solutions. This product targets young people and sports fans, as it seeks to

capitalise on emerging sectors including stadiums and corporate events. The

Source: Bloomberg

Holder % Holding Capital Group Companies Inc 14.9 Groupe BPI 8.4 Quandt S N 7.2 Euro Pacific Growth Fund 5.1 Massmutual Financial Group 3.1 Source: Bloomberg

Olivier Piou CEO Philippe Cambriel President - Europe Jacques Tierny CFO Philippe Vallee COO Claude Dahan Operations Martin McCourt Strategy & Innovation Source: Bloomberg

MiniTag can be used on public transport, social media, access control as well as

general payments.

Contactless Sticker - A sticker attached to the mobile device. Accompanied by a

downloaded app or SMS alerts, the user is able to make payments and is able to

keep a record of payments that have been made. Gemalto also advertises this

product as a strategic intermediate product, which financial institutions can use in

the transition from banking cards to mobile payments.

iPay Cover – Many versions of the iPhone do not come with NFC (near field

communication) support, meaning they cannot communicate with other devices

through touch. Gemalto offers a solution, which is a cover to place on the iPhone

which houses a Contactless MicroSD card holder. Thus the MicroSD can be

inserted, and the iPhone can be used to make payments. The iPay cover is thin,

light and discreet.

Contactless EMV Cards – EMV (the technical standard for smart payment cards

– chip and pin or contactless) is central to mobile payments. Gemalto combines

the contactless technology with the EMV technology, offering a faster and more

convenient way to make a purchase. Gemalto offers optimized chips and

operating systems for high level security and quicker transaction times. It also

offers a way to penetrate new markets (young, unbanked) and to increase the

number of transactions generating additional revenue streams.

Gemalto also provides digital security software for clients other than financial institutions such as governments. The main focus of the technology aimed at governments is to increase security and privacy. Its software has been used in applications for on-line eVoting, on-line tax payments, medical expense eClaims and on-line driving license services amongst others.

Gemalto also caters to the needs of enterprises, providing products to protect their sensitive data. The product Gemalto Identity and Data Protection enables organisations to take a data-centric approach to their security posture, while controlling access to the infrastructure and applications they rely upon. Sensitive data can thus be protected and controlled, both on-premise and in public or private clouds.


0.0 500.0 1,000.0 1,500.0

Mobile Communications

Payment & Identification

Patents

1,127.8

500.9

478.7

357.7

Europe, Middle-East,and Africa

Asia

United States OfAmerica

North & SouthAmerica

4 December 2015 - Gemalto, Orange, RATP and SNCF join forces to create

Wizway Solutions

17 November 2015 - Gemalto partners with NetApp to deliver integrated cloud

storage and data security solution for Amazon Web Services customers

29 September 2015 –launches Saudi Arabia’s first contactless EMV bank card

with Riyad Bank

14 September 2015 – introduced the Cinterion Secure Element – a tamper-

resistant component embedded in industrial Internet of Things (IoT) solutions to

enable advanced digital security and lifecycle management.

3 September 2015 –announced a partnership with Samsung to accelerate the use

of Samsung Pay through Gemalto’s Allynis Trusted Service Hub (TSH).

1 September 2015 –announced the launch of the industry’s first LTE Category 1

wireless module to revolutionise highly efficient 4G LTE connectivity.

29 July 2015 – announced SafeNet Luna SA 6, the first hardware security module

(HSM) purpose-built for service providers to offer on-demand crypto processing,

key management and key storage in the cloud.

6 July 2015 –announced the launch of wristbands embedded with its Optelio

Contactless Chip for NFC transport in Wuhan, China.

2 July 2015 –NTT Docomo, the largest mobile operator in Japan, selected

Gemalto to enable connectivity for IoT applications.

30 June 2015 –released SafeNet Multi-Link High Speed Encryptor (HSE) which

provides the equivalent of 10 by 10 Gbps high-speed encryptors in one unit.

19 May 2015 – Gemalto announced it was selected by BancNet, a Philippines-

based interbank network, to secure its mobile banking services.

6 May 2015 – Gemalto announced the launch of Sealys Premium inlays and

eCovers for electronic passports.

5 May 2015 – supplies Saracens rugby club prepaid wristbands which offer fans

fast and secure contactless payment for food and drink at Allianz Park stadium.

In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 6902.7 5897.2 - Cash & Equivalents 456.4 1059.6 + Preferred & Other 5.1 5.5 + Total Debt 6.9 566.2 Enterprise Value 6458.3 5409.3 Revenue, Adj 2388.6 2465.2 3121.9 3358.5 Growth %, YoY 6.4 3.2 26.6 7.6 Gross Profit, Adj 929.1 943.1 1223.8 1340.8 Margin % 38.9 38.3 39.2 39.9 EBITDA, Adj 398.3 422.8 554.4 607.5 Margin % 16.7 17.2 17.8 18.1 Net Income, Adj 258.9 240.4 293.8 364.7 Margin % 10.8 9.8 9.4 10.9 EPS, Adj 2.9 2.7 Growth %, YoY 26.2 (7.5) Cash from Operations 259.5 296.4 Capital Expenditures (63.4) (81.9) (149.5) (143.7) Free Cash Flow 196.1 214.5 149.6 293.1

Source: Bloomberg

Source: Bloomberg

Global Payments Inc provides full-service payment processing and also PCI

compliance assistance and integrated solutions. Headquartered in Atlanta, Georgia

with approximately 4,500 employees worldwide, Global Payments is a Fortune 1000

Company with merchants and partners in 29 countries throughout North America,

Europe, the Asia-Pacific region and Brazil. it is authorised to transact in more than 80

currencies, servicing 1.5m merchants, and processing over 6.5bn transactions

settling $400bn per annum.

The Group provides customers with the ability to accept all payment types across a

variety of distribution channels, including ecommerce online and mobile payment

solutions, in-person purchasing and merchant tools. Global Payments Inc's

integrated technology solutions division includes the OpenEdge platform and

extended payment gateway, supported by the Value Added Reseller (VARs)

programme. In addition, Global Payments Inc has forged many successful

partnerships with enterprises, banks and ISAs to provide acquiring, processing,

network communication and consumer money transfer services.

Bigcommerce- online ecommerce solution is a fully integrated, robust

ecommerce platform that provides simple, easy configuration and branding of an

online store to quickly enable ecommerce sales and revenue. It provides fast,

reliable processing of online sales all in one PCI-certified solution.

PayApp – an MPOS mobile card reader and app that allows merchants to accept

card payments from their iPhone, iPad or Android Smartphone. It includes a free

mobile application, a free card reader and a PayApp Mobile account which offers

useful features like discounts, sales tax, inventory mode and email receipts.

Mobile Register & Talech POS - an iPad point of sale that is ready to go in

minutes. Process credit cards, accept cash or cheque, with sales and inventory

insights available right from a mobile phone.

In-Person Solutions - provide access to all major forms of payment processing

including: credit/debit and purchasing card, electronic benefits transfer processing,

financial EDI services, money transfer, stored valued cards, gift & loyalty cards,

Source: Bloomberg

Price (US$) 61.4


Holder % Holding T Rowe Price Associates 8.2 FMR LLC 7.4 Vanguard 6.9 Blackrock 6.7 Artisan Partners Ltd 3.7 Source: Bloomberg

Jeffrey S Sloan CEO Cameron M Bready CFO David E Magnum COO Source: Bloomberg

POS equipment, verification and recovery services and merchant accounting and

web-based reporting.

Merchant Tools – include a smart dispute manager portal to access cases online;

Global Access @dvantage an integrated, web-based payment information

management tool and e-statements electronic access to reporting statements.

Enterprise- Adopt a partnership approach to deliver creative, reliable secure

payment solutions that provide long-term value. International eCommerce

capability for multinational merchants who require "card not present" support

across multiple countries which includes approximately 140 transaction currencies

and 15 like-for-like settlement currencies A broad range of value-added services

and products including dynamic currency conversion, tax-free, loyalty, card types.

Banks- Merchant referral programme, provides preferred pricing with no hidden

fees or added costs, unparalleled customer service and best-in-class payment

processing solutions.

Independent Sales Organisations (ISOs) - innovative point-of-sale equipment,

fully compliant to PCI standards. My.GlobalPay is a secure, web-based data and

business management tool designed to help ISOs effectively manage a growing

merchant portfolio. Use for merchant enrolment, transaction information, reporting

and archiving, and risk management.

Independent Sales Agents (ISAs) – provide credit/debit and cheque services All-

in-one statements for MasterCard, Visa, and Discover. The jump start programme

provides an income source while the business and sales portfolio expands. Allows

for an aggressive revenue share compensation and equipment sales and leasing

programmes to add further income.


1,656 616

313

189

United States

Europe

Canada

Asia-Pacific

60%

22%

11% 7%

United States

Europe

Canada

Asia-Pacific

15 December 2015 - Global Payments to acquire Heartland Payment Systems for

$4.3bn, combining leading payments technology company

23 November 2015 - Global Payments Partners with talech to Offer Industry-

Leading EMV Tablet Solution to U.S. Merchants

17 November 2015 – announces support for apple Pay in Canada

7 October 2015—announce Q1 Earnings and raises Annual Fiscal 2016 Outlook

10 September 2015 - announces full support for android pay in the US.

8 September 2015 – Yiftee a leading worldwide provider of payment technology

services is to enable seamless mobile gift card solution for Global Payments'

merchants

25 August 2015 – signs an agreement with Apriva to provide secure, EMV™

Mobile Point of Sale Solutions to U.S. Merchants

27 July 2015 - Global Payments and CaixaBank announce Central and Eastern

European joint venture with Erste Group Bank

22 June 2015 - announces full-service acquiring for American Express small

business merchants with the roll-out of OptBlue™ in Canada

15 June 2015 - announces support for Apple Pay in the UK

4 June 2015 - partners with Virtual Next to offer mobile payment, gift and loyalty

solution to Canadian merchants

27 April 2015 - launches EMV™ and contactless mobile payments solution in

Canada

25 March 2015 - acquires Realex Payments, a payment gateway for online

retailers, expanding its International e-commerce offerings

17 December 2014 - Global Payments and Bank of the Philippine Islands form

strategic Joint Venture

In Millions of USD FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 05/31/2014 05/31/2015 05/31/2016 05/31/2017 Market Capitalisation 4720.1 6813.8 - Cash & Equivalents 581.9 650.7 + Preferred & Other 135.6 105.6 + Total Debt 1833.8 2335.1 Enterprise Value 6107.6 8603.8 Revenue, Adj 2554.2 2773.7 2932.2 3086.9 Growth %, YoY 7.5 8.6 5.7 5.3 Gross Profit, Adj 1602.0 1751.6 1848.5 1937.3 Margin % 62.7 63.2 63.0 62.8 EBITDA, Adj 526.0 602.7 669.9 722.9 Margin % 20.6 21.7 22.8 23.4 Net Income, Adj 244.2 282.4 378.1 414.9 Margin % 9.6 10.2 12.9 13.4 EPS, Adj 1.7 2.1 3.0 3.3 Growth %, YoY 4.7 24.7 41.4 11.1 Cash from Operations 194.1 424.7 Capital Expenditures (81.4) (92.6) (95.6) (102.1) Free Cash Flow 112.7 332.2 441.8 460.9

Source: Bloomberg

Source: Bloomberg

Ingenico Group is a provider of payment solutions, enabling banks and merchants to

manage their payment activities across all sale channels (in-store, on-line and

mobile). The focus is on innovation and transaction security, and it considers itself as

a 'leading global digital payment service provider.' Products & services are split into

three categories: Smart Terminals, Payment Services and Mobile Solutions.

The focus is on ensuring merchants are equipped to offer customers payment

convenience, simplicity and fluidity, with the aim of increasing sales conversion rates.

The group offers a range of smart terminals, including desktop terminals, portable

terminals, unattended terminals, biometric terminals (operated by use of fingerprints)

and retail terminals. Ingenico has been regarded as a terminal industry leader for the

last 30 years. It deploys the largest number of terminals with the most advanced

technologies. The operating system used by these terminals is branded as having

security at the core, with an openness to the web standard and web-based

environment.

This service is part of the overall group and focuses on ensuring that payment

services are seamless, regardless of the channel they are being used for. Payment

Services provide merchants with solutions across 170 countries. This is achieved

through offering over 150 local and international payment methods whether they are

card-based, in apps or via digital wallets or QR codes. With Ingenico Collect, a one-

stop payment solution is provided for merchants looking to grow their business in

Europe by expanding into new countries, through a single provider for all payments.

Alternatively GlobalCollect is aimed at merchants looking to expand to new

geographies who are looking to outsource their payment processes. This takes care

of risk management, FX management, settlement of funds, reporting and remittance

of collected funds, with the aim of enabling the merchant to focus on other areas of

their business.

Price (EUR) 112.7


Source: Bloomberg

Holder % Holding Jupiter Investment Mgmt 5.5 BPI Financial Corp 5.5 Allianz Global Investors Europe 5.3 Allianz SE 4.5 BNP Paribas 4.1 Source: Bloomberg

Philippe Lazare CEO Davud Szczepanski COO Stephen Buchner e-Payments Michel Leger Innovation Kesh Talwar Payment Strategy Nathalie Lomon Finance Source: Bloomberg

The third strand of Ingenico provides mobile Point of Sale solutions to more than

100,000 merchants worldwide with the aim of boosting sales for their merchant

clients. It offers three different products:

In Store mobile point of sale - this technology enables customers to check

inventory and product information using their mobile device, which eliminates lost

sales from long queues and service interruptions. It enables customers to check

out from the aisles and provides a more personal shopping experience as the

customer is able to provide recommendations and review past orders.

Out of store mobile point of sale - this allows card payments out of the store. This

could include in pop-up stores, or even when delivering products to a house. This

enables growth of business outside a shop creating new revenue channels. The

card payments are securely accepted in real time, reducing risk of fraud or

chargebacks.

On-board mobile point of sale - this is targeted at customers that are travelling. It

offers services such as seat upgrades, booking management, onward travel, on

board purchases whilst customers are travelling on planes or other forms of public

transport. The advantages of this include improved fare enforcement as well as

reduced queues and increasing customer satisfaction.

Ingenico’s ethos is rooted in a drive for innovation which is built on a strong focus on

research and development activity, and targeted acquisitions.


0

1,001

1001

472 0 0 Revenue by

Measure

Terminals andSolutions forElectronicTransactionsRevenue byGeography

Europe - SEPACountries

0%

41%

40%

19% 0% 0%

Revenue by Measure

Terminals andSolutions forElectronicTransactions

Revenue byGeography

12 January 2016 - Ingenico Group presents The Estate Manager, its new terminal

management solution

23 November 2015 - Ingenico Group joins forces with Think&Go to deploy a first

connected screen integrating contactless multi-payment for BNP Paribas

12 November 2015 - Ingenico Group and Aava Mobile launch the first fully

integrated tablet with contactless payment

28 October 2015 - Ingenico Group’s ePayments division launches Ingenico

Connect, a new Integration and Mobile-Optimized Checkout Solution

18 June 2015 – Ingenico Payment Services, the flagship brand for digital

transactions, teams up with Google Inc. to help online merchants boost their

business abroad with a joint programme called the Export Accelerator.

2 April 2015 – Ingenico Group and Intel Corporation announced a collaboration to

combine Intel technology and Ingenico Group secure payment acceptance for the

Internet of Things.

17 March 2015 – Ingenico Group announced the launch of a payment acceptance

pilot solution specifically designed for the Curie Institute’s campaign against

cancer in France (A daffodil for Curie), enabling passers-by with contactless

payment cards to make a donation to the Curie Institute by flashing their cards in

front of advertising screens.

3 March 2015 – Ingenico Group announced that Allianz Hungaria, a leading

insurance company, chose Ingenico Mobile Solutions’ mPOS to fully equip the 800

sales agents of its network with mobile payment solutions by the end of the year.

20 January 2015 – Ingenico Group announced that it owned 100% of ROAM,

who's mCommerce platform consists of secure mobile card readers, mobile Point-

of-Sale (mPOS) application, an innovative mobile payments engine.

In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 3093.9 5013.1 - Cash & Equivalents 352.1 426.4 + Preferred & Other 1.2 2.1 + Total Debt 648.5 1190.6 Enterprise Value 3391.5 5779.4 Revenue, Adj 1370.9 1607.3 2186.8 2400.5 Growth %, YoY 13.6 17.2 36.0 9.8 Gross Profit, Adj 599.7 729.9 983.6 1075.9 Margin % 43.7 45.4 45.0 44.8 EBITDA, Adj 280.0 370.3 500.7 555.7 Margin % 20.4 23.0 22.9 23.1 Net Income, Adj 130.5 182.9 274.1 313.0 Margin % 9.5 11.4 12.5 13.0 EPS, Adj 2.3 3.1 Growth %, YoY 31.4 33.3 Cash from Operations 216.4 304.9 Capital Expenditures (40.2) (51.7) (63.6) (67.3) Free Cash Flow 176.2 253.2 289.3 313.1

Source: Bloomberg

MasterCard operates the world’s fastest payment processing network, operating in

more than 210 countries and territories. It offers end-to-end processing products and

solutions, processing billions of payments across the globe and building economic

connections that accelerate business.

Its three-tiered approach starts with a franchise model, which boasts a strong

portfolio of brands and products including MasterCard, Maestro, Cirrus and

MasterCard PayPass. The processing tranche allows rapid adoption of new ways to

pay and finally the advisory portion of the business provides industry leading insight

and solutions that advance commerce by making the payment process faster and

more secure. MasterCard is the only payment brand that provides its US cardholders

with identity theft protection and detection services free of charge via its partnership

with CSID.

MasterCard PayPass is a “tap n go” purchase system, which allows consumers to

use their contactless cards to pay for their items via the NFC chip. The chip passes

sends payment information to a secure reader at the point of sale

Along with the MasterCard debit card, Maestro offers a debit card service from

MasterCard. It is a Global network, with 1.2 million retail locations in the UK, 13

million around the world and 1.9 million ATMs. It provides PIN-based, direct cash

access from your bank account home and abroad.

Cirrus is a worldwide interbank network operated by MasterCard Worldwide. It links

MasterCard, Maestro, Diners Club credit, debit and prepaid cards to a network of

around 1 million ATMs globally.

The MasterPass by MasterCard is a digital wallet designed to make online shopping

safe and easy, by enabling the user to store all of their information in one convenient

and secure place. MasterPass is currently live in 24 countries.

Price (USD) 91.6


Source: Bloomberg

Holder % Holding

Mastercard Foundation 10.5 Blackrock 5.2 Vanguard Group 5.1 FMR LLC 4.7 T Rowe Price Associates 3.3 Source: Bloomberg

Ajaypal S Banga President/CEO Martina Hund-Mejean CFO Timothy H Murphy Chief Franchise Officer Walter M Macnee Vice Chairman Juan Rajlin Treasurer Barbara L Gasper Senior VP Julienne Loh Senior VP Source: Bloomberg

MasterCard rePower allows eligible MasterCard or Maestro prepaid cards to be

topped-up via a rePower merchant. Customers can take their card into the merchant

along with the cash they want to load onto the card. The card is then verified by the

merchant's Mastercard rePower device, either by swipe or Chip & Pin and the money

is then loaded onto the card.

MasterCard supports the use of MasterCard cards with Apple Pay.


(4,000)(2,250) (500) 1,250 3,000 4,750

Transaction Processing…

Domestic Assessments

Cross-border Volume Fees

Other Revenues

Rebates and Incentives…

5,778.5

3,694.5

Other

United States

6 January 2016 - MasterCard and Coin Sign Agreement to Power Wearable

Payments

16 September 2015 – MasterCard launches its “Take 5 to Protect Yourself”

initiative to encourage cardholders to sign up for MasterCard ID Theft Alerts

10 September 2015 – MasterCard Digital Enablement Service (MDES) announces

it will power safe and secure payments with Android Pay

8 September 2015 – MasterCard announced the launch of Digital Enablement

Express, which expedites the process of digitising and tokenising MasterCard

accounts through the MDES

18 August 2015 –Announces a pilot programme with First Tech Federal Credit

Union that will enable First Tech employees to verify transactions using biometrics

30 July 2015 – Citibank India and MasterCard launch Citi MasterPass; the first

global wallet in India

30 July 2015 – MasterCard and Samsung Electronics announced they are

leveraging MDES to deliver Samsung Pay in Europe

15 July 2015 – MasterPass launches in Brazil

14 July 2015 – MasterPass launches in Hong Kong

14 July 2015 – Apple Pay available to MasterCard customers in the UK

30 June 2015 – MasterCard and Parkeon announced the launch of “City

Connector”, a unique means to deliver offers and services from local businesses

via on-street parking meters

19 May 2015 – MasterCard launches MasterCard Send, a personal payments

service that enables funds to be sent quickly and securely to consumers

domestically and internationally

27 April 2015 – MasterCard announces the acquisition of Applied Predictive

Technologies, the leading cloud-based analytics provider

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 99769.7 99304.7 - Cash & Equivalents 6295.0 6305.0 + Preferred & Other 11.0 34.0 + Total Debt 0.0 1494.0 Enterprise Value 93485.7 94527.7 Revenue, Adj 8346.0 9473.0 9713.9 10827.3 Growth %, YoY 12.9 13.5 2.5 11.5 Gross Profit, Adj -- -- 8353.9 9311.5 Margin % -- -- 86.0 86.0 EBITDA, Adj 4856.0 6276.9 5652.0 6470.6 Margin % 58.2 66.3 58.2 59.8 Net Income, Adj 3173.8 3721.6 3822.0 4332.4 Margin % 38.0 39.3 39.3 40.0 EPS, Adj 2.6 3.2 3.3 3.9 Growth %, YoY 18.8 22.1 4.8 16.8 Cash from Operations 4135.0 3407.0 Capital Expenditures (155.0) (175.0) (185.9) (210.9) Free Cash Flow 3980.0 3232.0 3922.6 4240.4

Source: Bloomberg

Source: Bloomberg

Paysafe is a global provider of online and mobile payment processing services, to

both merchants and customers. It is active in over 200 countries with over 100 types

of payment and multi-currency options. Its Payment Cloud allows instant, on demand

and unbreakable frictionless commerce through all payment channels.

Within its services, Paysafe offers:

Paysafe Processing - a secure payment gateway. Paysafe is able to process

payments between merchants, banks and card schemes and facilitates a broad

range of payment types, including customisation and real-time options;

Own-branded digital wallets and stored value cards – NETELLER and Skrill which

allow the consumer to hold cash on-line or offline through prepaid Mastercards;

paysafecard – which is a Pay As You Go top up card designed for the consumer

who does not have a bank account or credit card. Paysafecard is a world leader,

available at 500,000 sales outlets in 41 countries;

Paysafe Card Solutions – Paysafe is a MasterCard-authorised issuer and so is

able to issue MasterCard products, thereby acting as the issuing bank, including

its Net+ card which can be used anywhere MasterCard is accepted;

Paysafe Acquiring which operates merchant accounts, enabling businesses to be

able to collect Visa and MasterCard payments;

White label solutions - Payolution provides payment in instalment and monthly

invoicing for merchants in the D-A-CH (Germany-Austria-Switzerland) region and

includes a 100% payment guarantee for the merchant; and

Mobile Engagement through Fans Entertainment which provides data analytics for

sports teams, artists, promoters and festivals.

Price (GBp) 351.8


Source: Bloomberg

Old Mutual Global Investors 12.2 Franklin Resources 7.2 Ameriprise Fin Grp 4.7 Fidelity Management & Research 4.6 Thornburg Investment Management 4.4 Source: Bloomberg

Joel Leonoff President/CEO Brian David McArthur-Muscroft

CFO

Danny Chazanoff COO Matthew Jones Secretary Jessica Stalley Head of Investor

Relations Elliott Wiseman General Counsel Source: Bloomberg


25%

31%

44% Prepaid

Digital Wallet

Processing

50%

26%

24%

Europe

N America

Asia / ROW

8 January 2016 – Trading update – 2015 revenue and adjusted EBITDA expected

to be ahead of market expectations.

23 December 2015 – First day of dealings on the Main Market of London Stock

Exchange

11 December 2015 – Placing of 35,106,454 shares held by CVC Capital Partners

and Investcorp at 346p. Following Placing CVC and Investcorp no longer hold

shares in the Company.

9 November 2015 – Optimal Payments Plc renamed Paysafe Group Plc and the

new website address is www.paysafe.com;

13 October 2015 –Continuing to seek admission to listing on the premium

segment of the Official List on the London Stock Exchange’s Main Market. On

completion, it is expected to be eligible for inclusion in the FTSE 250, though the

earliest possible date is expected to be the quarterly review in March 2016;

29 October 2015 – Customers Personal Data Breaches. As a result of media

enquiries, the Company was made aware that a small amount of customers’

personal data is in the public domain resulting from data breaches in 2011 or

before in NETELLER and in 2012 or before in Moneybookers (now part of Skrill);

3 September 2015 – Moody’s assigned a definitive Ba2 rating to Optimal

Payments following the Skrill acquisition.

20 August 2015 – Optimal Payments announced the completion of the acquisition

of Skrill. The Skrill Group is one of Europe’s leading digital payments businesses

providing digital wallet solutions and online payment processing;

28 May 2015 –acquired a Montreal – based mobile platform developer FANS

Entertainment Inc. for C$16m. It was acquired to offer an application with analytics

for merchants to engage more directly with their customers;

21 May 2015 – Announced the consolidation of Meritus and GMA, acquired in July

2014, are being managed as one integrated business unit together with the

NETBANX Straight Through Processing business.

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 883.6 870.6 - Cash & Equivalents 164.4 142.3 + Preferred & Other 0.0 0.0 + Total Debt 10.9 127.8 Enterprise Value 730.2 856.0 Revenue, Comparable 253.4 365.0 581.6 851.6 Growth %, YoY 41.5 44.0 59.4 46.4 Gross Profit 131.9 189.1 293.7 446.7 Margin % 52.1 51.8 50.5 52.5 EBITDA 46.8 80.9 129.7 241.2 Margin % 18.5 22.2 22.3 28.3 Net Inc, Comparable 32.0 68.1 85.7 168.8 Margin % 12.6 18.7 14.7 19.8 EPS, Comparable 0.1 0.2 0.3 0.4 Growth %, YoY 1353.3 93.6 7.8 38.6 Cash from Operations 100.3 47.4 Capital Expenditures (13.6) (11.1) (19.2) (25.5) Free Cash Flow 86.7 36.3 87.3 209.6

Source: Bloomberg

http://www.paysafe.com/

Source: Bloomberg

PayPal is a convenient and cost effective global payments platform that is available

in 203 markets, and over 100 countries. It has a customer account network of 169

million which contributes towards creating an open and secure payments ecosystem.

New customers can simply register to PayPal, providing card details which are saved

to their account. Once they have registered they are provided with a username and

password, which is all that is required going forward to make online payments.

In addition, users can withdraw funds from their PayPal account straight into their

bank account in 57 currencies, and hold balances in their PayPal account in 26

currencies.

In November, PayPal completed the acquisition of Xoom which will broaden its reach

for affordable payments around the world, using a mobile phone, tablet or computer

in 40 countries including Mexico, India, the Philippines, China and Brazil.

PayPal offers a solution for merchants to be able to manage all of their payments via

a single PayPal account. Once they have signed up, businesses can immediately

start accepting payments online. The PayPal checkout button can be added to the

website to allow express checkout for customers. They also offer Website Payments

Pro, which unites the merchant account, payment gateway and PayPal checkout for

£20 per month plus transaction fee.

PayPal Here is an app which is designed to allow retailers to start accepting card

payments in store immediately. A one-off fee buys the card reader which can be

positioned at the checkout. The merchant can then download the PayPal Here app

on their smartphone or tablet and sign up to the service, linking their account to their

merchant bank account. Once they have completed the registration, the app can be

linked to the card reader via Bluetooth. The system is then ready for use. The app

also allows for receipts to be printed or, alternatively, to send them to the customer

via text or email. The card reader is able to accept contactless payment and also

NFC enabled devices such as a smartphone mobile wallet, or smart watch. The

retailer will only incur the original one-off fee of the card reader (between £49-£60),

and then a 2.75% fee per transaction.

Price (USD) 33.1


Source: Bloomberg

Holder % Holding Omidyar Pierre 7.1 Vanguard Group Inc. 5.0 Fidelity Management 2.2 Blackrock 1.4 Oppenheimer Funds Inc. 1.4 Source: Bloomberg

Daniel Schulman CEO John Rainey CFO Tom Keithley Chief Risk Officer James Barrese Chief Technology Officer Source: Bloomberg

Venmo is an authorised delegate of PayPal, which enables users to send money

instantly using money held in their Venmo account or they can link up their account to

a bank account or debit card. Simple payments such as splitting the bill for a meal or

paying back money owed to friends can be made by the press of a button. Money

held in a Venmo account can then be moved to the user’s bank account in one

business day.

PayPal One Touch simplifies PayPal’s checkout experience even more by recording

the username and password of a user’s PayPal account for 6 months. Customers are

able to click “checkout with PayPal” to complete a purchase, removing any need for

typing in bank details or re-entering login details each time.

PayPal Beacon allows merchants to make check in pretty much automatic for

consumers, by letting them pay with an image of their face that appears on a

merchant’s POS screen, or alternatively via a Payment Code. This technology

enables consumers to make purchases by scanning a QR code on their mobile

phone, or receiving a four-digit code on their phone to complete a purchase. Once

ready to pay, the user opens the PayPal app, or the merchant’s app and checks in.

Once complete, the app prompts you with a QR code or a four-digit code to

authenticate the purchase. If the merchant has a barcode/QR scanner they can scan

the relevant code to complete the payment. If they do not, they can enter the four-

digit code into the PIN pad at checkout to finish.

This service is only offered by PayPal through Samsung fingerprint enabled devices.

This system saves your fingerprint to the PayPal app, and allows customers to pay

with just a swipe of their finger. Consequently, users no longer need to share their

bank information with the merchant as it is kept safely stored with PayPal.

PayPal PassPort is designed to help merchants expand their sales internationally by

providing country specific guidance around cultural customs, shipping and distribution

logistics, customs and taxes, currency exchange and seasonal sales peaks and

troughs. It is a website focused around educating small businesses on how they

might best tap into the international market.


0 2,000 4,000 6,000 8,000

Transaction Revenues

Other Value Added Services

3,877.02,993.0

1,155.0

U.S.

Rest of World

United Kingdom

10 December 2015 - PayPal Launches Merchant Pilot with Alibaba Wholesaler

20 November 2015 - PayPal Partners with Airbnb to Let Friends & Family Meet

Halfway

12 November 2015 – PayPal completes acquisition of Xoom

19 August 2015 – PayPal acquires Modest, a service which allows merchants to

offer an end-to-end experience that makes selling on any platform easier and

simpler. This means PayPal will offer a complete commerce solution including

payments and order management;

6 August 2015 – Samsung smart TV users now able to pay with PayPal on their

TV;

28 July 2015 – PayPal unveils new research on Chinese cross-border shoppers,

revealing opportunity for U.S. merchants to expand global sales;

20 July 2015 – PayPal lists on Nasdaq and completes separation from eBay Inc;

1 July 2015 – PayPal acquires Xoom Corporation, a leader in international

remittances, for $25 per share;

9 April 2015 - PayPal makes acquisition of CyActive official;

2 April 2015 – PayPal makes acquisition of Paydiant

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- -- - Cash & Equivalents 1925.0 2230.0 + Preferred & Other 0.0 0.0 + Total Debt 1103.0 1093.0 Enterprise Value -- -- Revenue, Comparable -- -- 9199.4 10686.6 Growth %, YoY -- -- 16.2 Gross Profit -- -- 5832.4 6700.5 Margin % -- -- 63.4 62.7 EBITDA 1544.0 1784.0 2496.6 2911.5 Margin % -- -- 27.1 27.2 Net Inc, Comparable -- -- 1548.3 1848.0 Margin % -- -- 16.8 17.3 EPS, Comparable -- -- 1.3 1.5 Growth %, YoY -- -- 18.6 Cash from Operations 1993.0 2220.0 Capital Expenditures (391.0) (492.0) (817.6) (870.9) Free Cash Flow 1602.0 1728.0 1831.3 2003.4

Source: Bloomberg

Source Bloomberg

Proxama PLC is an international mobile commerce company operating across two

divisions specialising in proximity marketing via mobile and providing end-to-end

solutions for card issuers to migrate customers from magnetic stripe credit and debit

cards to contactless mobile payments.

Proxama provide end-to-end digital solutions to banks and card issuers to securely

transition their card portfolio onto mobile for Near Field Communication (NFC)

contactless payments as well as solutions for EMV enablement, Electronic PIN

Delivery, tokenisation and card issuance management.

Proxama provides end-to-end support for cloud based (HCE) payments and

network/vendor payment models, combining Proxama’s trusted and mature EMV

(Europay, Mastercard, Visa) components with Token and Credential Management.

The Proxama Network (TapPoint) is the UK’s largest independent network of

Bluetooth beacons. By partnering with media owners to deploy beacons across their

media real estate – this gives media operators the opportunity to engage in real-time

with millions of consumers via their mobiles, in high footfall locations and in areas of

high dwell.

Price (GBp) 1.6


Source: Bloomberg

Holder % Holding Breeze Gavin 14.7 Octopus Investment Ltd 12.1 Garnel Neil 11.8 Hargreave Hale Lts 7.4 TD Direct Investing 3.5 Source: Bloomberg

John Kennedy Interim CEO/CFO Mike Woods CEO: Payments Source: Bloomberg

http://www.proxama.com/digital-payments/

Source: AWS RoadShow Cambridge – Proxama Customer Presentation

Source: www.nfc-ready.eu Source: Google Stock Image


0.00 0.20 0.40 0.60 0.80

Investment Activities

78%

18%

4%

UnitedKingdom

Rest of World

United Statesof America

17 December 2015 - Proxama Announces New Contract the client has agreed to

an upfront payment of close to $1 million to have total access to Proxama's EMV

processing services

10 December 2015 - New contract win with a North American bank. A two year

contract to supply, install and maintain a network of proximity services for 10,000

mobile touch points across the bank's national branch network in North America

8 December 2015 – Proxama announces Eddystone compatability to enhance

mobile proximity technology offering.

17 November 2015 - Proxama Network™ brings beacon technology to blowUP

media’s East London banner package.

21 September 2015 - Half Yearly Results For the six months to 30 June 2015

16 September 2015 - New Contract Win. new contract win with a leading Middle

Eastern bank, commencing in September 2015

7 September 2015 - Proxama and Stanchion join forces allowing card issuers to

plug-and-play new mobile services

27 August 2015 - Proxama and Sygnity join forces allowing card issuers to plug-

and-play new mobile services

31 July 2015 - New Contract Win. new contract win with the South African

franchise of the Standard Bank of South Africa-owned Diners Club. The contract

commences in July 2015

22 July 2015 - Proxama provides enhanced electronic PIN distribution for major

European Payment Processor customer

19 May 2015 - Proxama Announces New Contract with Exterion Media and The

Award of a £1 million Government Grant

18 May 2015 - Proxama and Eye Airports Bring Beacon Technology to UK’s

Busiest Airports

18 March 2015 - South Africa’s Tutuka Joins EMV Club with Proxama

In Millions of GBP FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 22.4 22.2 -- -- - Cash & Equivalents 7.5 5.5 -- -- + Preferred & Other 0.0 0.0 -- -- + Total Debt 0.5 1.1 -- -- Enterprise Value 15.5 17.8 -- -- Revenue, Comparable 0.8 0.7 6.9 16.0 Growth %, YoY -- (19.9) 959.9 131.9 Gross Profit 0.4 (0.1) -- -- Margin % 48.1 (13.9) -- -- EBITDA (3.1) (5.6) (2.2) 4.5 Margin % (386.8) (863.1) (31.9) 28.1 Net Inc, Comparable (3.2) (5.5) -- -- Margin % (390.7) (851.5) -- -- EPS, Comparable 0.0 0.0 0.0 0.0 Growth %, YoY -- 12.5 71.4 -- Cash from Operations (2.4) (5.8) -- -- Capital Expenditures 0.0 (0.2) -- -- Free Cash Flow (2.4) (6.0) -- --

Source: Bloomberg

Source: Bloomberg

SafeCharge provides advanced technologies and services that simplify online and

mobile payments, maximising the performance of each merchant checkout flow. They

have a diversified, blue chip client base and are a trusted payment partner for

customers from various e-commerce verticals.

SafeCharge's advanced personalised check-out solutions (“Cashier”) allows

merchants to customise the experience across all digital devices, and provides a

comprehensive payment solution that includes secured connectivity to financial

institutions, advanced risk management platform and a Payments Management and

Analytics component.

Cashier is a payment page solution designed to deliver a personalised experience at

checkout. It is able to offer options including language, currency and previous

payment methods and remember those choices for the future via an easy-to-use

interface.

SafeCharge’s Merchant Risk Support Interface (MRSI) lets merchants interact with

each case logged. It also supplies real time alerts for flagged transactions and

documents the actions on each transaction for internal auditing.

The SafeCharge Payment Processing Platform links merchants to a network of

acquiring banks and local alternative payment providers. The platform makes use of

Smart Routing to ensure merchant payments are sent to the most suitable payment

facility.

Price (GBp) 249.5


Source: Bloomberg

Holder % Holding

Northernstar Investments Ltd 66.1 JPMorgan Cahse & Co 8.3 Henderson Group Plc 5.0 Hargreave Hale Ltd 1.7 Legal & General Investment Management Ltd

1.3

Source: Bloomberg

David Avgi CEO Ali Farid Khwaja CFO Yuval Ziv COO Tsach Einav CFO Israel Noam Grinberg Head of Risk Management Oded Kovach Head of R&D Source: Bloomberg

This provides a single location to monitor and control all of the components of the

SafeCharge system, including Cashier, processing and risk management. It enables

merchants to query and access information from the processing and risk platforms.

SafeCharge Card Services provides the complete value chain for prepaid card

issuance from program management technologies to full scope licensed issuing, risk

management and financial control. Brands are able to issue loyalty and gift cards via

this service.

Pay.com is the new digital wallet from SafeCharge, which is yet to be launched.

Merchants will be able to allow clients to load money onto their accounts and then

pay digitally.


36%

43%

21%

Sport & Leisure

Digital Goods &ServicesFinancialServices

56%

26%

18%

UK

Cont. Europe &CISRest of theWorld

7 January 2016 - Saxo Payments and Safecharge collaborate to simplify cross

border settlement accounts

3 June 2015 – SafeCharge announced it entered into a strategic partnership with

German based FinTech Group AG to develop banking services in areas including

banking transaction services, mobile payments and debit cards.

1 May 2015 – SafeCharge announced it agreed to enter into a partnership with

South East Asia-focused payment services company 2C2P.

23 April 2015 – SafeCharge announced that it launched a PokerStars branded

prepaid MasterCard that allows poker players in the UK to withdraw from and

deposit direct into their bank account.

23 December 2014 – SafeCharge announced the acquisition of 3V Transaction

Services Limited for a consideration of €14.5 million.

10 December 2014 – SafeCharge announced the Group had been granted

approval for Issuing Activity from MasterCard Europe, which grants approval for

the Company to issue pre-paid MasterCard products.

16 September 2014 – SafeCharge announced that it had received authorisation as

an Electronic Money Institution (EMI).

26 August 2014 – SafeCharge announced it had been granted principal

membership status for merchant acquiring by VISA Europe.

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- 624.34 - Cash & Equivalents 11.82 146.51 + Preferred & Other 0.00 0.00 + Total Debt 0.00 0.00 Enterprise Value -- 477.83 Revenue, Comparable -- -- 102.50 124.00 Growth %, YoY -- -- 20.98 Gross Profit 24.90 44.49 Margin % -- -- EBITDA 0.87 22.77 30.77 38.30 Margin % -- -- 30.02 30.89 Net Inc, Comparable -- -- 25.67 31.17 Margin % -- -- 25.04 25.13 EPS, Comparable -- -- 0.17 0.21 Growth %, YoY -- -- 21.76 Cash from Operations 10.30 19.97 Capital Expenditures (0.58) (1.99) (2.60) (3.20) Free Cash Flow 9.72 17.98

Source: Bloomberg

Source: Bloomberg

Square, Inc. develops and provides point-of-sale software worldwide. Its main

product is Square Register, a point-of-sale system that generates digital receipts,

inventory, and sales reports, as well as provides analytics and feedback.

Square Inc serves big and small businesses from bakeries to retailers. Its product,

Square Register, is available in the App Store and on Google Play, and it is designed

to run on a smartphone or tablet, and on counter. Square, Inc. is headquartered in

San Francisco, California.

Square Register is a free point-of-sale (POS) application offered by Square, a rapidly

growing credit card processor founded by Twitter co-founder Jack Dorsey. Designed

as a cloud-based replacement for traditional cash registers. Square Register can be

downloaded to multiple devices including the iPad, iPhone and other Android

devices.

However, while Square Register is optimized using the iPad, this service can also

use the standard Square card reader to accept swiped payments.

Square offers the app for free with a flat rate of 2.75% per transaction, no monthly

fee. Features include:

In-app inventory

E-invoicing

Stock ordering system

Basic customer management

Advanced analytics

Customer feedback option

Loyalty/rewards program

Source: Bloomberg

Price (USD) 11.2


Holder % Holding Capital World Investors 12.4 SCGE Management LP 8.1 Source: Bloomberg

Jack Dorsey CEO/President/Co-Founder Sarah Friar CFO Dana Wagner Secretary Source: Bloomberg

The Square card reader is a free EMV accessory in which individuals and businesses

can take payments with debit and credit cards. Square’s card reader is compatible

with iPhone, iPad and Android devices by simply connecting it via an auxiliary

connection.

Source: www.squareup.com Source: www.squareup.com


98%

2%

Transaction

Software andHardware

97%

3%

United States

International

Source: www.squareup.com

24th

November 2015 – Square announces closing of initial public offering and full

exercise of underwriters’ option to purchase additional shares.

23rd

November 2015 – Local sellers across the country are the first to accept

mobile payment with squares new reader.

27th

August 2015 – Square launches new Appointments application.

18th

August 2015 – Square cash launches on Apple Watch for instant easy

payments.

15th

July 2015 – Square launches new employee management application.

30th

June 2015 – Square introduces square payroll, a quick and easy way to pay

your employees.

8th

June 2015 – Square announces Apple Pay reader.

7th

April 2015 – Square introduces powerful marketing tools for the offline world.

11th

March – Square acquires Kill Technology.

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- -- - Cash & Equivalents 166.18 225.30 + Preferred & Other 366.20 514.95 + Total Debt 0.00 30.00 Enterprise Value -- -- Revenue, Comparable -- -- 1252.00 1678.67 Growth %, YoY -- -- 34.08 Gross Profit 128.79 226.07 Margin % -- -- EBITDA (94.24) (131.91) (48.05) 8.65 Margin % -- -- (3.84) 0.52 Net Inc, Comparable -- -- (184.33) (129.00) Margin % -- -- (14.72) (7.68) EPS, Comparable -- -- (0.64) (0.28) Growth %, YoY -- -- 56.25 Cash from Operations (60.58) (109.39) Capital Expenditures (47.93) (28.79) (41.30) (34.00) Free Cash Flow (108.51) (138.19) (115.13) (201.47)

Source: Bloomberg

Source: Bloomberg

Vantiv is the no.2 merchant acquirer and the largest PIN debit acquirer in the U.S.

based on number of transactions. The company's growth strategy includes

expanding further into high-growth channels and verticals, including integrated

payments, ecommerce, and merchant bank.

The Company enables merchants of all sizes to accept and process credit, debit and

prepaid payments and provide them supporting services, such as information

solutions, interchange management and fraud management, as well as vertical-

specific solutions in sectors such as grocery, pharmacy, retail, petroleum and

restaurants.

Vantiv offers global payments technology across the world; eligible in more than 200

countries and territories worldwide. As of March 2015, there were 2.4 billion Visa

cards in use with 103.2 billion transactions having taken place June 2014 – June

2015.

Vantiv delivers innovative online payment acceptance and processing for all major

card brands plus popular alternative payment options in card-not-present situations. It

also aims to help small businesses grow revenue, mitigate risk and secure

cardholder data.

Vanitv offers an omni-channel approach which provides customised solutions for

businesses of all sizes, whether e-commerce of bricks & mortar. It also offers data

analytics and security services including PCI Assist, Encryption and Tokenization.

This arm serves the gaming and entertainment markets including Casinos & Resorts,

Lotteries, Digital Gaming, Entertainment Venues and Digital Licensed Content. As

well as Payment Processing, Security & Fraud Prevention and Data & Analytics,

solutions include Cashless Gaming and Network Management.

Price (USD) 46.4


Source: Bloomberg

VANGUARD GROUP 7.0 T ROWE PRICE ASSOCIATES 6.8 WELLINGTON MANAGEMENT GROUP LLP

5.4

ALLIANCEBERNSTEIN LP 5.3 JENNISON ASSOCIATES LLC 5.1 Source: Bloomberg

Charles D Drucker President/CEO Mark L Heimbouch CFO/COO Source: Bloomberg

Vantiv offers a range of end-to-end solutions for credit, debit and prepaid card issuing

and payment processing can be tailored to keep the card top-of wallet and increase

transaction revenue. Vantiv MobiMoney puts cardholders in control of card

management via a mobile app.

Vantiv acts for over 2,800 agencies including cities, schools, transit authorities and

federal agencies. With the constant evolution of the payments processing landscape,

Vantiv recognises the importance of accountability and security and emphasises the

need to keep up-to-date with rules and regulations, EMV and PCI compliance,

convenience fees, interchange management and emerging payment technologies.

For Payment Facilitators who service many merchants, Vantiv PayFac provides both

fast, reliable and secure payments for the merchants and control over how and when

they paid for the facilitator. Vantiv PayFac assists in on-boarding sub-merchants

quickly and accepts Credit, Debit, Cheque, PIN/PIN-less Debit Gift Card, JCB and

PayPal as well as Visa, MasterCard, Discover and AMEX.


2 December 2015 - Vantiv Announces Secondary Public Offering, Partial Warrant

Cancellation and Partial Net Exercise of Warrant

28 October 2015 – Vantiv Reports Third Quarter 2015 Results

22 October 2015 – Vantiv announces new e Commerce Fraud Toolkit services

levels

9 September 2015 – Rabobank N.A chooses Vantiv to grow its merchant services

division

8 September 2015 –Vantiv Launches OmniShield Assure(TM), a New Payments

Security Suite to Protect Small and Medium-Sized Businesses

8 July 2015 –Capital One Teams with Vantiv to Enhance Payment Processing

Solutions for Merchant Services Customers

21 May 2015 - Ingenico Group Adds Vantiv's EMV-certified Application to Smart

Terminals for Small- and Medium-sized Businesses

31 March 2015 – Vantiv becomes second largest merchant acquirer in the U.S

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 6214.9 6393.8 - Cash & Equivalents 171.4 411.6 + Preferred & Other 408.4 397.6 + Total Debt 1827.6 3416.7 Enterprise Value 8279.4 9796.5 Revenue 2108.1 2577.2 1666.5 1815.9 Growth %, YoY 13.1 22.3 (35.3) 9.0 Gross Profit 1172.6 1402.5 Margin % 55.6 54.4 EBITDA 553.3 594.0 801.3 886.8 Margin % 26.2 23.0 48.1 48.8 Net Income 156.4 150.3 446.3 506.7 Margin % 7.4 5.8 26.8 27.9 EPS 1.0 0.9 2.2 2.6 Growth %, YoY 19.7 (10.7) 154.1 16.9 Cash from Operations 480.6 592.9 Capital Expenditures (61.6) (103.2) (91.4) (107.0) Free Cash Flow 419.0 489.7 518.3 585.6

Source: Bloomberg

Source: Bloomberg

Headquartered in San Jose, California, Verifone is a leader in providing trusted,

secure and innovative payment terminals, global payment as a service, and

commerce enablement solutions that ease interactions between consumers and

merchants.

The company's products and services include mobile, countertop and self-service

payment devices, software, and web-based gateways. It has one of the leading

electronic payment solutions brands and is one of the largest providers of electronic

payment systems worldwide.

With 5,300 employees worldwide, and partnerships with local distributors, Verifone

operates in 150 countries and across vertical markets.

The Company's customers include financial institutions, payment processors,

petroleum companies, large retailers, government organizations and healthcare

companies, as well as independent sales organizations.

Verifone’s system solutions consist of point of sale electronic payment devices that

run proprietary operating systems, security and encryption software and certified

payment software as well as third party, value-added applications. its system

solutions are able to process a wide range of payment types including signature and

PIN-based debit cards, credit cards, contactless/radio frequency identification (RFID)

cards, smart cards, pre-paid gift and other stored-value cards, electronic bill payment,

cheque authorization and conversion, signature capture and electronic benefits

transfer (EBT).

Its proprietary architecture was the first to enable multiple value-added applications,

such as gift card and loyalty card programs, healthcare insurance eligibility and time

and attendance tracking, to sit on the same system without requiring recertification on

the addition of new applications and it is an industry leader in multi-application

payment systems.

Verifone’s system solutions are selected for their robust functionality, intuitive user

interface and modular design. Functionality includes transaction security, connectivity

and compliance with certification standards, as well as the flexibility to execute a

variety of payment and non-payment applications on a single system solution.

Price (USD) 26.1


Source: Bloomberg

Jackson Square Partners LLC 8.0 FMR LLC 7.3 Blackrock 6.5 Manning & Napier Advisors INC 6.5 Vanguard Group 6.4 Source: Bloomberg

Paul S Galant CEO Jennifer Miles President:Americas June Yee Felix President:Europe Bulent Ozayaz President:Southern Europe Marc E Rothman Exec VP/CFO Source: Bloomberg

Solutions and services include:

Mobile which provides mPOS capabilities that include accepting all leading mobile

wallets and NFC payment solutions as well as data analytics for retailing and

remote inventory management;

Payment Gateways which reduce PCI compliance scope and provide secured

payments and powerful business analytics tools. Easy-to-use, cloud-based

solutions streamline transactions and provide robust reporting to improve

operational efficiency and identify trends;

Payment and Data Security - security is tightly integrated into every part of the

business and Verifone prides itself on being at the forefront of creating policies

and guidelines that secure vital cardholder and transaction data against theft and

misuse;

Payment-as-a-Service - simplifies payment with one, convenient cloud-based

platform. With Verifone Point, payment logic moves from the POS to the payment

device which reduces PCI scope, simplifies EMV adoption and maintenance and

fosters rapid integration of mobile wallets and emerging payments.


16 December 2015 - Verifone Announces Comprehensive and Flexible Mobile

Point-of-Sale Solution for Merchants of All Sizes

24 November 2015 - Verifone teams up with Danish Swipp app to bring mobile

payments in store

11 November 2015 - Verifone Adds Payment as Service Capabilities in Germany

with Acquisition of InterCard AG;

13 October 2015 – Verifone expands Taxi e-Hail, e Payments, and Media

Business with Curb;

3 September 2015 Verifone reports Third Quarter results;

1 September 2015 - Verifone and Aava Mobile Partner to Offer First Intel-

Powered, “Pocketable” mobile point of sale Solution;

10 June 2015 – Verifone supports launch of new store rewards offering within

Apple Pay;

3 June 2015 - Visa Inc. and Verifone Join Forces to Accelerate Omni Commerce

Globally;

30 April 2015 - Harbortouch Selects Verifone Terminal Solutions to Meet EMV

(technical standard for smartcards), Next-Generation Payment Needs;

30 March 2015 - Heartland and Verifone Renew Alliance; Announce EMV and

Encryption Initiative;

10 January 2015 - Verifone and Samsung Collaborate to Bring Android-Based

mPOS to Enterprise & Multi-Lane Retailers.

In Millions of USD FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 10/31/2014 10/31/2015 10/31/2016 10/31/2017 Market Capitalisation 4222.1 3464.5 - Cash & Equivalents 250.2 208.9 + Preferred & Other 36.9 34.9 + Total Debt 883.2 799.3 Enterprise Value 4891.9 4089.8 Revenue, Adj 1868.9 2001.5 2102.7 2231.9 Growth %, YoY 9.8 7.1 5.1 6.1 Gross Profit, Adj 724.7 831.0 907.6 972.1 Margin % 38.8 41.5 43.2 43.6 EBITDA, Adj 254.5 311.4 392.0 420.6 Margin % 13.6 15.6 18.6 18.8 Net Income, Adj (8.1) 105.3 249.9 289.4 Margin % (0.4) 5.3 11.9 13.0 EPS, Adj (0.1) 0.9 2.1 2.5 Growth %, YoY 96.3 -- 133.7 15.9 Cash from Operations 199.1 249.3 Capital Expenditures (85.0) (106.4) (110.9) (108.8) Free Cash Flow 114.1 142.9 187.7 237.6

Source: Bloomberg

Source: Bloomberg

Visa Inc. offers a full service via a four pronged facility which enables Visa to

represent the merchant, which accepts Visa payments, the acquirer which is the

financial institution that enables merchants to be paid, the issuer which is the

financial institution that provides Visa cards and payment products and finally the

cardholder who is the consumer using Visa cards and payment products.

It offers global payments technology across the world; eligible in more than 200

countries and territories worldwide. As of March 2015, there were 2.4 billion Visa

cards in use with 103.2 billion transactions having taken place June 2014 – June

2015.

Visa Inc. cites VisaNet as “the technology behind the Visa brand” - it is the name of

the global payments network that provides domestic processing for hundreds of

countries. It has multiple, synchronised data centres around the world and thousands

of secure endpoints on every continent.

VisaNet has:

an average transaction time of under 1 second

a total volume of US$6.3 trillion (payments volume of US$3.9 trillion)

2 million ATMs worldwide

Tens of millions Visa acceptance locations worldwide

14,800 Visa Financial Institutions worldwide

2.1 billion Visa cards worldwide

175 authorisation currencies; and

Processes 150 million transactions every day

Visa Checkout enables consumers to create an account with them by inputting their

details and card information. Once this is complete, they are able to shop online and

checkout out at the end of their shopping experience via their username and

Price (USD) 73.8


Source: Bloomberg

Holder % Holding Blackrock 6.0 Vanguard Group Inc. 5.4 FMR LLC 5.3 T Rowe Price Group Inc 4.7 State Street Corp 3.9 Source: Bloomberg

Charles W. Scharf Chief Executive Officer Ryan McInerney President Kelly Mahon Tullier Executive VP Jim McCarthy Global Head of Innovation Vasant Prabhu CFO Ellen Richey Vice Chairman Michael Ross Global Head of HR Bill Sheedy Global Exec Rajat Taneja Executive VP Source: investor.visa.com

password from Visa Checkout, providing the merchant website has signed up to use

the system.

Visa Checkout helps prevent fraud by offering a verification service in order to ensure

that cardholders are legitimate before they make a purchase. It is designed to reduce

fraudulent transactions through the use of device fingerprinting and step-up

authentication.

Currently Visa Checkout is supported by over 180 financial institutions and is

available for use at many online stores.

Visa supports the use of Visa Cards with Apple Pay.


-4000 -2000 0 2000 4000 6000 8000

Service fees

Data processing fees

International transaction…

Other revenues

Client incentives6,847.0

5,629.0

226.0

U.S. OperatingRevenues

Rest Of WorldOperating Revenues

EU Fee OperatingRevenues

2 November 2015 - Visa Inc. to Acquire Visa Europe

6 October 2015 - Visa and Chevron Bring Mobile Payments to the Pump

15 September 2015 – Visa introduces EMV Chip-based Biometrics, with South

Africa's Absa Bank the first to trial the fingerprint validation at chip ATMs

24 August 2015 – Visa Checkout expands global availability with new merchants

and issuers in China and the UAE

17 September 2015 - Samsung joins the Visa Digital Enablement Program, which

offers a commercial framework that makes it easier for issuers and technology

companies to access the Visa Token Service (VTS).

28 July 2015 – Visa and Stripe, a mobile and online payment provider, partner to

support new technologies for merchants, developers and consumers worldwide.

3 June 2015 – Visa and FireEye join forces to co-develop tools and services to

help merchants and issuers protect against advanced cyber-attacks targeting

payment data.

3 June 2015 – Visa Inc. and Verifone, a leader in point of sale payments,

announced a partnership to enable merchants to offer their customers a more

streamlined, secure purchase experience across digital face-to-face commerce

environments (omni-channel)

2 March 2015 – Visa and Bharti Airtel, a leading telecommunications services

provider, extend mobile payments to seven African countries including Gabon,

Ghana, Kenya, Madagascar, Rwanda, Seychelles and Tanzania

1 March 2015 – Visa and Samsung bring mobile payments to the new Samsung

Galaxy S6 using secure Visa payments with Samsung Pay

27 February 2015 – Visa announced an agreement to acquire TrialPay, a privately

held company with an offers platform that connects merchants with millions of

consumers through targeted promotions

13 February 2015 – Visa announced that it is expanding the use of new security

technology that replaces the traditional 16-digit Visa account number

In Millions of USD FY 2014 FY 2015 FY 2016 Est FY 2017 Est 12 Months Ending 09/30/2014 09/30/2015 09/30/2016 09/30/2017 Market Capitalisation 131862.7 169552.4 - Cash & Equivalents 6965.0 9399.0 + Preferred & Other 0.0 0.0 + Total Debt 0.0 0.0 Enterprise Value 124897.7 160153.4 Revenue, Adj 12702.0 13880.0 15229.9 17107.7 Growth %, YoY 7.8 9.3 9.7 12.3 Gross Profit, Adj -- -- 15229.9 17107.7 Margin % -- -- 100.0 100.0 EBITDA, Adj 8585.0 9682.0 10578.5 12047.8 Margin % 67.6 69.8 69.5 70.4 Net Income, Adj 5721.0 6208.1 6914.5 7880.4 Margin % 45.0 44.7 45.4 46.1 EPS, Adj 1.9 2.3 2.9 3.3 Growth %, YoY 19.2 20.8 25.3 16.2 Cash from Operations 7205.0 6584.0 Capital Expenditures (553.0) (414.0) (516.9) (551.6) Free Cash Flow 6652.0 6170.0 6913.2 7947.8

Source: Bloomberg

Source: Bloomberg

Western Union aims to meet consumer needs through providing new, innovative

solutions. The company provides innovative solutions, high service levels, and omni-

channel integration for cross-border, cross-currency money transfer.

The company has a strong foundation in delivering such services to customers and

businesses around the globe. They have an extensive network, including more than

500,000 agent locations in more than 200 countries and territories as of December

31, 2014. This combines with a strong global brand, tailored solutions for businesses,

and compliance and regulatory capabilities that allow them to operate in a complex

environment.

WU enables customers to:

Send and receive money

Pay bills

Provide business solutions

Facilitate prepaid phone and gift cards and money orders

This is carried out via a network of more than 500,000 Western Union, Orlandi Valuta and Vigo Agent locations in more than 200 countries and territories and over 100,000 ATMs and kiosks.

In 2014, The Western Union Company completed 255m consumer-to-consumer

transactions worldwide, moving $85 billion of principal between consumers, and

484m business payments.

Price (USD) 17.1


Source: Bloomberg

Holder % Holding Capital Group Companies 13.2 Capital Resources 12.6 Fidelity 9.1 Vanguard 9.0 T Rowe Source: Bloomberg

Hikmet Ersek Chief Executive Officer

Elizabeth Chambers Chief Strategist Ragesh Agrawal CFO

Source: investor.visa.com

19 November 2015 – Western union has submitted a non-binding proposal to buy

OzForex, the Australian Forex company.

17 November 2015 – Offers new global money transfer service in WeChat, the

social media platform owned by Tencent Holdings Limited.

30 September 2015 – Western Union takes Bill Payment Service to Walgreens.

4 August 2015 – Western Union renews agreement with Cash Money in Canada.

20 July 2015 – Western Union and Kroger extend more than 30 year relationship.

6 June 2015 – Western Union enhances Mobile Money transfer capabilities in

Africa.

19 May 2015 – Sainsbury’s Bank announces new relationship with Western Union.

3 May 2015 – Western Union and Belgian post group expand relationship.

29 April 2015 – Western Union and US bank extend relationship.

11 February 2015 – Western Union and Meijer Ink Deal to continue long standing

relationship.

In Millions of USD FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 9466.8 9340.1 - Cash & Equivalents 2073.1 1783.2 + Preferred & Other 0.0 0.0 + Total Debt 4213.0 3720.4 Enterprise Value 11606.7 11277.3 Revenue 5542.0 5607.2 5501.5 5625.0 Growth %, YoY (2.2) 1.2 (1.9) 2.2 Gross Profit 2307.0 2309.8 2288.9 2318.6 Margin % 41.6 41.2 41.6 41.2 EBITDA 1389.5 1412.4 1398.9 1420.4 Margin % 25.1 25.2 25.4 25.3 Net Income 810.9 852.4 855.6 859.8 Margin % 14.6 15.2 15.6 15.3 EPS 1.5 1.6 1.7 1.7 Growth %, YoY (17.9) 9.5 4.5 3.6 Cash from Operations 1088.6 1045.9 Capital Expenditures (80.2) (105.9) (200.0) (202.3) Free Cash Flow 1008.4 940.0 925.7 959.9

Source: Bloomberg

Source: Bloomberg

Wirecard is one of the world’s leading companies for payment processing and risk

management. Its aim is to provide an all-in-one payment service that can take the

user through their entire checkout experience, starting with the payment system,

through to risk management and banking. Its aim is to pave the way towards a one-

stop cashless payment process.

Wirecard Checkout Page – The Wirecard checkout page supports all popular

payment methods and can be quickly and easily integrated into an online store. It

offers an intuitive user interface, and customers can choose whether they want to

pay via their mobile in store or online. All payments are verified online, in real time,

and the customer receives a confirmation, which enables immediate processing of

the order. The checkout is currently available in 26 languages.

Credit Card Processing – Wirecard is a payment service provider and bank, and

consequently it is able to offer a full end-to-end service that can be used in

conjunction with all major credit and debit cards, and all common transaction

currencies.

SEPA Direct Debit – In an effort to reduce costs and minimise administration

expenses, Wirecard offers automated processing of SEPA (single euro payment

area) direct debits in all 33 countries of SEPA.

Online Banking Payments – Wirecard is able to offer customers who do not have

a credit or debit card a way to make purchases online securely. These service

providers include:

CIMB clicks – Extensively used throughout Asia

Debito Bradesco –operated by Banco Bradesco, one of Brazil’s biggest banks

Giropay – This service has 1,500 participating banks in Germany and almost 17

million users

iDEAL – Used for the processing of over 60% of all Dutch e-commerce

Trustly – Open to all customers holding bank accounts in any of the supporting

countries (Estonia, Finland, Poland and Sweden)

Price (EUR) 45.8


Source: Bloomberg

Holder % Holding Jupiter Investment Management 8.1 MB Beteilgungsgesellschaft 6.1 Alken Asset Management Ltd 4.9 Ameriprise Fin Grp 3.8 T Rowe Price Group Inc 3.2 Source: Bloomberg

Markus Braun Chairman Burkhard Ley CFO Jan Marsalek COO Iris Stoeckl Investor Relations

Source: Bloomberg

Maybank2u.com – Offered by Maybank, Malaysia, allowing customers to pay

online directly from their bank accounts

POLi – Supported by 14 Australian and 8 New Zealand banks, and is currently the

preferred method for over 50% of online purchases

Przelewy24 (P24) – More than 80% of online purchasers use P24 in Poland and

over 8,000 retailers are using it for processing payments

Alternative Payments – Wirecard is able to offer 20 different national and

international payment methods for e-commerce such as e-wallets, prepaid

vouchers and purchase on account. Examples include:

Skrill Digital Wallet

PayPal (e-wallet)

Paysafecard (prepaid voucher)

RatePay (payment by instalment, payment by direct debit and buying on account)

Wirecard Checkout Portal – This portal offers small and medium-sized

companies and start-ups the ability to choose a method of payment that they

would like to provide on their website, and simply set it up through online

registration and a plugin tool. The process is easy and quick to apply and, pricing

is a one-off fee.

Wirecard’s system of risk management begins with the implementation of its fraud

prevention system. This is designed to recognise irregular transactions before

completion, and also to limit and avoid the possibility of unnecessarily flagging a

transaction as fraudulent. Part of the risk management system also supplies

analytics, simulation, rule processing and case management.

Wirecard Bank is a wholly owned subsidiary of the Wirecard Group, which offers

combined payment processing and banking services. It is a Principal Member of

Visa, MasterCard and JCB and operates as an acquirer in over 69 countries, offering

merchants in retail and mail order more than 100 transaction and 15 payment

currencies.


68%

31%

1%

Electronic Payment& Risk Management

Acquiring & Issuing

Call Center &CommunicationServices

49%

28%

19%

4%

Revenue by Origin

Germany

Europe

Rest of the World

11 December 2015 - Wirecard and Alipay sign agreement for innovative POS

payment acceptance

27 October 2015 - Wirecard acquires payments business of Great Indian (GI)

Retail Group

23 September 2015 – Wirecard Payment Services now available for all Sky

subscriptions.

27 July 2015– partners with Sparhandy.de, a German online reseller of

smartphones

7 July 2015 – MyOrder an mCommerce platform selects Wirecard for host card

emulation technology solutions.

29 June 2015 - launches mobile checkout development platform for retailers

8 June 2015 – Wirecard launches B2B payment solution for the Chinese market.

21 April 2015 – CIMB Bank Singapore teams up with Wirecard to embark on

merchant acquisition business

18 March 2015 – opentab launches payment via Wirecard Checkout Portal

16 March 2015 – signs mobile payment cooperation agreement with Drillisch

10 February 2015 – announces Wearable Payments Developer Kit

27 January 2015 – expands European collaboration with Triumph

13 January 2015 – teams up with Bank Mega to support Carrefour Indonesia

11 December 2014 – acquires GFG Group Limited, New Zealand

In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation 3224.5 4501.8 - Cash & Equivalents 547.2 818.0 + Preferred & Other 0.0 0.0 + Total Debt 233.1 98.4 Enterprise Value 2910.3 3782.2 Revenue, Comparable 481.7 601.0 758.0 934.5 Growth %, YoY 22.1 24.8 26.1 23.3 Gross Profit -- -- 345.0 421.9 Margin % -- -- 45.5 45.2 EBITDA 125.4 174.3 227.1 282.0 Margin % 26.0 29.0 30.0 30.2 Net Inc, Comparable 82.7 107.9 152.6 193.7 Margin % 17.2 18.0 20.1 20.7 EPS, Comparable 0.7 0.9 1.3 1.6 Growth %, YoY 10.8 20.4 41.3 26.7 Cash from Operations 124.2 126.5 Capital Expenditures (51.3) (75.0) (57.0) (73.7) Free Cash Flow 72.9 51.5 136.6 162.0

Source: Bloomberg

Source: Bloomberg

Worldline is an End to End digital service provider, designing and providing solutions

and processing services around payment. The company was spun out of Atos, the

French computer-services provider in June 2014, which still owns a 73% stake. It

aims to cover the whole payment value chain through the creation of digital platforms

that handle all the transactions between a company, its partners and its customers.

Worldline seeks to do this through a three pillared approach.

Worldline seek to facilitate consumer engagement with cutting-edge and seamless

services for merchants on their devices, whether it is before or after the point of sale.

It designs services and solutions and implements them for clients.

Commercial Acquiring – Worldline offers a wide range of payment solutions for

Point of Sale, online and mobile payments, whether they are cash or non-cash. Its

aim is to help create new customer experience around payments, such as

customer surveys, terminal advertising and loyalty.

Multichannel Payment Acceptance – Worldline covers the multichannel and

centralised payment acceptance for both remote and face-to-face payments for

merchants & banks. Merchants are able to accept all payment types including

bank cards, bank transfers, digital wallet payments or private cards. This is

intended to improve their clients conversion rate.

Electronic & Mobile Commerce – Worldline offer an intelligent search engine,

Smart Finder, which makes finding, comparing and buying products smooth and

easy. The e-Merchandising function makes it possible to increase the customer

basket amount and order frequency based on the consumer’s profile.

Worldline aims to create digital products for business innovation and operational

efficiency.

Connected Living – this enables vehicles and household items to provide internet

access, enabling services such as in-car payment and a mass market automotive

e-store.

E-Ticketing – Electronic ticketing is a service provided by Worldline, assisting the

transport operators to optimize the management, control, planning and operation

Price (EUR) 22.1


Source: Bloomberg

Holder % Holding

Atos 73.3 Blackrock 5.0 Financiere De L’Echiquier 2.5 Fidelity Management 0.9 Norges Bank Investment Management

0.8

Source: Bloomberg

Thierry Breton Chairman Gilles Grapinet CEO Bruno Vaffier CFO Source: Bloomberg

of their passenger services. This can all be done on mobile devices, providing a

platform for smart ticketing and fare collection.

E-Government Collection Platforms – Worldline provides digitization services,

which ensure that paperless, secured systems are put in place within public

services. The services can also be used for tolling, based on satellite

technologies. Their eHealth realm allows digital healthcare information to be

available to public sector entities and process health insurance card systems.

Worldline aims to help clients anticipate major changes in the industry, through

transformative technologies like mobile, big data or electronic wallet, enabling

processes to be optimised.

Acquiring Processing and Value Added Services – Worldline offers a complete

acquiring processing solution ranging from merchant contract set-up to merchant

post–settlement activities. It is optimised for domestic and international card

schemes on any transactional device: Point Of Sale, ATM, and for epayments.

Issuing Processing and Value Added services – Worldline also offers powerful

and secure technical and financial issuing processing services. Value-added

services include customised cardholder services, enhanced security through

Access Control Server and Efficient Fraud and Risk Management.

Online Banking - Worldline offers online banking through a set of non-card

Payment services and eBanking services for customer-centric transactions. This

product is focused in the retail banking market across all channels.

Worldline considers itself a European leader, and global player in the payments and

transaction services industry. It has over 40 years of experience and employs more

than 7,200 people worldwide in 17 countries.


360 370 380 390 400

Merchant Services &Terminals

Financial Processing &Software Licensing

Mobility & e-TransactionalServices

36%

29%

13%

11%

6% 5% France

Belgium andNetherlands

United Kingdom

Germany and Centraland Eastern Europe

Iberia and LatinAmerica

Asia and India

8 December 2015 - Worldline teams up with MICHELIN® Solutions to launch

EFFITRAILERTM, a new connected solution for managing truck trailers

22 October 2015 - Worldline and Auriga partner to deliver an integrated Multivendor ATM Software solution

10th September 2015 - Carrefour Belgium, Visa and Worldline enable contactless payments in Belgian retail

26th

August 2015 - Luxembourg’s banks choose Worldline’s Access Control Server (ACS) solution to secure e-commerce with 3D-Secure

29th

May 2015 – Fuelgenie (Worldline subsidiary) works its magic with Sainsbury's partnership

21st May 2015 - Worldline launches first HCE (near field communications Mobile

Payment) solution in Germany.

20th

May 2015 - Worldline secures First Great Western contract to digitise the railway

13th

May 2015 - Worldline and ING Belgium together for MyBank eMandate solution

30th

April 2015 - Worldline selects Transatel to enhance its connected objects solutions and mobile payment terminals

11th

March 2015 - Worldline supports D8 with the first ever Twitter-based TV voting system

19th

February 2015 - Major Dutch Banks choose Worldline to manage SEPA eMandate services and iDEAL transactions

4th

November 2014 - Worldline partners with Powa Technologies to offer tablet-based POS terminals across Europe, Middle East and Africa

8th

October 2014 - Worldline and Alpha Card sign new American Express merchant agreement

In Millions of EUR FY 2013 FY 2014 FY 2015 Est FY 2016 Est 12 Months Ending 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Market Capitalisation -- 2110.8 - Cash & Equivalents 542.0 215.6 + Preferred & Other 0.0 0.0 + Total Debt 641.6 12.5 Enterprise Value -- 1907.7 Revenue, Comparable -- 1149.3 1223.6 1313.5 Growth %, YoY -- -- 6.5 7.4 Gross Profit -- -- 277.7 303.4 Margin % -- -- 22.7 23.1 EBITDA 207.1 194.2 233.3 257.4 Margin % -- 16.9 19.1 19.6 Net Inc, Comparable -- 113.8 122.1 133.3 Margin % -- 9.9 10.0 10.1 EPS, Comparable -- 0.9 0.9 1.0 Growth %, YoY -- -- 8.2 8.9 Cash from Operations 161.8 184.4 Capital Expenditures (61.7) (68.9) (71.5) (75.7) Free Cash Flow 100.1 115.5 125.1 133.2

Source: Bloomberg

http://worldline.com/en-us/home/media-center/press-releases/2015/pr-2015_09_10_01.html












Source: Bloomberg

.

Worldpay is headquartered in London, UK. It has 25 offices in 11 countries and around

4,500 employees.

The Group has three operating divisions: Global eCom, Worldpay US and Worldpay UK.

Global eCom serves large and fast growing internet-led multinationals with complex

payment needs in emerging markets such as Brazil, India and China as well as in

developed markets. It is focused on five key industry verticals which have complex

and different payment needs: Digital Content, global Retail, Airlines, Regulated

Gambling and Travel.

Worldpay UK (WPUK) provides local in-store, online and mobile payment acceptance

solutions for UK-based merchants, from large corporates to small and medium-sized

enterprises (SMEs/SMBs) and micro merchants, accounting for approximately 42% of

UK card payments by volume of PoS transactions in 2014;

Worldpay US (WPUS) provides local in-store, online and mobile payment acceptance

solutions for US-based merchants, with a focus on integrated payments for SME

customers and vertical-specific solutions for those in the Grocery, Petroleum,

Restaurant and Retail industries. In addition, Worldpay US operates ATM processing

services, including transaction processing for cash dispensing, account deposit

services and certain advanced services, such as bill payment and mobile top up, to

third-party organisations that own or deploy ATMs.

Digital payments whether in-store , online or mobile. In-store includes traditional PoS

terminals and virtual terminals that allow processing of payments over the phone

using web-based technology. Online, mobile and multi-channel payments include a

variety of online payment gateways and can be standalone or integrated systems that

can act as a hosted omni-channel payments service operating over terminals,

websites and apps in a bundled service.

Alternative payments ~ Worldpay offers over 326 alternative payment methods

outside the global card schemes in 126 different transaction currencies. It can tailor

where payment methods range from mobile payments, signed and unsigned direct

debits, e-wallets, offline/online/real-time bank transfers, cash on delivery, cheques, bill

payments and e-banking.

Price (GBp) 306.8


Source: Bloomberg

Holder % Holding Ship Investors 42.0 Blackrock 4.3

Source: Bloomberg

Phillip Jansenf Chief Executive Officer Ron Kalifa Vice Chairman Richard Medlockr CFO Source: investor.visa.com

Value-adding services including fraud and risk management, treasury management

and FX services and business insights such as payment analytics, acceptance

optimisation and business management software. Being able to drive up transaction

acceptance rates is one of the main ways in which Worldpay can help customers

increase their sales.

In 2014, Worldpay processed 11.5 billion transactions with a value of around £370

billion.

Worldpay operates in 146 countries, in 126 currencies through 326 payment types

and has 400,000 customers.

Online transactions, including Cardholder Not Present, accounted for 41% of the total.


15 September 2015 – Worldpay and Zuora team up on Subscription based payments;

27 August 2015 – Worldpay enters Chinese software export market with Wondershare;

22 July 2015 – Missguided turns to Worldpay for global expansion;

15 July 2015 – Worldpay appoints Sir Michael Rake as Chairman;

08 June 2015 – Apple Pay coming to Worldpay’s customers In the UK from launch;

26 May 2015 – Contactless is king as Worldpay transactions soar past £2billion;

20 May 2015 – Worldpay extends global payment acceptance capabilities to India;

11 March 2015 – HK Express to reach new heights with Worldpay

In Millions of GBP FY 2013 FY 2014 Current/LTM 12 Months Ending 12/31/2013 12/31/2014 06/30/2015 Market Capitalisation -- -- 5545.0 - Cash & Equivalents 181.6 168.7 99.5 + Preferred & Other 0.0 0.0 0.0 + Total Debt 2236.7 2422.8 2375.8 Enterprise Value -- -- 7821.3 Turnover 799.2 863.4 918.5 Growth %, YoY 11.4 8.0 13.4 Gross Profit 704.1 765.3 806.7 Margin % 88.1 88.6 87.8 EBITDA 349.3 392.9 409.1 Margin % 43.7 45.5 44.5 Net Income Before XO (164.8) (50.0) (11.9) Margin % (20.6) (5.8) (1.3) Adjusted EPS -- -- Growth %, YoY -- -- Cash from Operations 69.7 142.6 179.9 Capital Expenditures (57.0) (26.4) (29.7) Free Cash Flow 12.7 116.2 150.2

Source: Bloomberg

Source: Bloomberg

Company Code Disclosure All companies listed below: Proxama:

3,6 7

Source: Daniel Stewart 1. Within the past twelve months Daniel Stewart & Co plc and/or its affiliates has managed or co-managed an offering for this Company, for which it received fees or the promise of

fees

2. Daniel Stewart & Co plc and/or its affiliates act as corporate broker, nominated advisor or financial advisor to this Company

3. Daniel Stewart & Co plc and/or its affiliates regularly hold/may hold in future trading positions (which may include options) in this Company

4. Daniel Stewart & Co plc and/or its affiliates holds more than 5% of the securities of this Company

5. The Company holds more than 5% of the securities of Daniel Stewart & Co plc and/or its affiliates

6. Daniel Stewart & Co plc and/or its affiliates may currently be providing, expects to provide within the next three months or may have provided within the previous twelve months,

investment banking services to this Company, which have given rise to payment or the promise of payment

7. The author and/or an individual responsible for production of this report has direct ownership of stock in this Company

8. The author and/or an individual responsible for production of this report received or purchased shares in the issuer prior to a public offering of shares

9. Daniel Stewart and Company is party to an agreement with this company for the publication of research on it

10. This research note has been disclosed to the Company, with resulting amendments, prior to its dissemination

11. An officer of Daniel Stewart & Co and/or its affiliates is an officer of the Company

The Daniel Stewart recommendation structure is based on relative upside/downside to target price. The target price is set on a rolling 12 month view. Upside or downside of 10% or

more is categorised as Buy or Sell respectively, and less than 10% a Hold. Our Distribution of Recommendation statistics table can be viewed at

http://www.danielstewart.co.uk/Footers/Legal__Regulatory/default.aspx

We aim to cover company’s results or major events, but we do not guarantee to do so and coverage may cease at any time.

Although reasonable care has been taken by Daniel Stewart & Co plc to ensure the facts stated and opinions given and projections made in this document are fair and accurate,

Daniel Stewart & Co plc has not independently verified all the information given in this document.

The contents of this document have been prepared by, and are the sole responsibility of and have been issued by Daniel Stewart & Company Plc for the purpose of section 21 of the

Financial Services and Markets Act 2000 and is intended only for investors who are professional clients and eligible counterparties as defined by the FCA, and may not be distributed

to retail clients as defined by FCA. In the event that any such person should come into possession of this document, it is recommended that they should seek independent advice

from a suitably qualified professional advisor before taking any decisions in relation to the investments detailed herein. The investments mentioned in this document may not be

suitable for all recipients or be appropriate for their personal circumstances. The information in this document is believed to be correct but cannot be guaranteed. Opinions constitute

our judgement as of this date and are subject to change without warning. The views expressed in this report accurately reflect the personal views of the author as at the date of the

report. The author did not receive compensation or other payments in connection with the specific recommendations or views expressed herein. This document is not intended as an

offer or solicitation to buy or sell securities. Daniel Stewart & Company, its officers and employees may have positions in the securities mentioned herein. Past performance is not

necessarily indicative of future performance and the value of investments may fall as well as rise and the income from them may fluctuate and is not guaranteed. Clients may not

recover the amount invested. Some securities carry a higher degree of risk than others. The levels and basis of taxation can change. When we comment on AIM or ISDX Markets

shares you should be aware that because the rules for these markets are less demanding than those of the Official List of the London Stock Exchange the risks are higher. There is a

higher risk of losing the money you have invested. Furthermore, the marketability of these shares is often restricted, you may have difficulty in selling your shares and there is often a

big difference between the buying and selling price so that if you have to sell them immediately after purchase you may get back much less than you paid for them. If you are in any

doubt, you should consult your investment advisor.

Owing to its size and structure and analysts’ involvement with existing and prospective clients, Daniel Stewart does not hold its research out as being impartial. As non-independent

research, it is classified as a marketing communication under FCA rules and has not been prepared in accordance with the legal requirements designed to promote the

independence of investment research; and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Daniel Stewart & Co plc may actually or may seek to do business with companies covered in its research reports. The firm’s policy on managing actual or potential conflicts of interest

and other relevant disclosures can be viewed at http://www.danielstewart.co.uk/Footers/Legal__Regulatory/default.aspx

Daniel Stewart & Company Plc may distribute research in reliance on Rule 15a-6(a)(2) of the Securities and Exchange Act 1934 to persons that are major US Institutional investors,

however, transactions in any securities must be effected through a US registered broker-dealer. Any failure to comply with this restriction may constitute a violation of the relevant

country’s laws for which Daniel Stewart & Company Plc does not accept responsibility.

Daniel Stewart & Company is a limited company registered in England No. 2354159 Registered Office: 33 Creechurch Lane, London, EC3A 5EB Authorised and regulated by the

Financial Conduct Authority. Member of the London Stock Exchange

Companies to which disclosures apply: ATOS, Cielo, Earthport, First Data, Fiserv, Gemalto, Global Payments, Ingenico, MasterCard, Paysafe, PayPal, Proxama, Safecharge,

Square, Vantiv, Verifone, Visa, Western Union, Wirecard, Worldline, Worldpay.

daniel stewart & company · izettle, payleven, shopify and shopkeep, to name just a few, have...

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