The European acquiring market is surging

by Antonio W. Romero

The volume of online merchant payments (acquiring) in EU countries reached 543 billion euros in 2022. Over the past decade, it has almost doubled due to the displacement of cash from circulation, the growth of ecommerce and the digitalization of business. The market is forecast to grow further. Such large market volume makes acquiring very attractive for many companies.

There are several categories of players in the European acquiring market but new generation paytech firms like NJoy by Anatoly Makeshin and Kevin are gaining traction in an industry that has typically been dominated by traditional banks and integrated software developers.

NJoy Payments, founded last year by entrepreneur Anatoly Makeshin is already actively developing in Latvia, hoping to eventually challenge the leaders in this market. This product designed for the SME segment connects the service quickly via a personal account. Its known that the company is providing the payment card processing online with several top-notch ways of payments form integration possibilities, which seemingly improves the checkout process and provides the payer with joy from purchasing online.

Kevin, another fast-growing newcomer in the acquiring market, which provides merchants with a payment screen customized to their brands and easy access to European banks.

The unique characteristics of these new firms such as high automatization, cost-efficient and simultaneously personal attitude to every client, is likely to bring about a revolution in the world of paytech.

For traditional banks, acquiring is a side business, while the bulk of their profits is made on classic banking products. Therefore, banks carry out acquiring mainly for large businesses, to which they can simultaneously provide other services, such as loans. Acquiring in traditional banking is further limited since it is not cost effective for them to focus on small and medium enterprises, which would require additional investments to develop necessary automated processes. Banks, therefore, focus mostly on large companies.

A more popular option for acquiring is offered by integrated software providers. Their solutions allow for not only making payments, but also for issuing invoices, keeping accounts, etc. Examples of these include U.S. services such as Square (part of Block Inc.), Clover (part of Fiserv Inc.) and Toast, which specializes on software for restaurants and on processing for various types of payments. There are also strong European paytech firms like the Netherlands-based Adyen, which is one of the market leaders in payments processing not only in Europe, but globally, as well as companies like Nexi Group, which dominate certain markets like the Italian and Scandinavian ones.

However, the European acquiring market overall is fragmented. In France, for example, most online payments are processed by banks, which often have complex procedures in place. In Greece, cash payments are still preferred, and acquiring has only recently gained momentum. But there is huge potential for growth of the paytech industry in Europe considering the rise of alternative payments like digital wallets, money transfer systems, and cryptocurrency.

There are hundreds of acquiring companies operating in the European market and each one is able to find its own niche. After all, a small trading company that employs only a few people may prefer paytech firms over a large bank, which may be too expensive and inconvenient. And the bells and whistles of fintech companies that offer payments as part of costly business management software is not an appealing solution for small businesses, which aim to minimize costs.

Often, small companies need only basic features from an acquirer: a low commission and user-friendly interface for itself and its customers, and fast payments so that there is no glitch or misfunction which can lead to lost orders and revenue. This is where new generation paytech firms, such as NJoy Payments and Kevin have stepped in. They are user-friendly, and their solutions are based on advanced technologies, including machine learning to automate payment processes and ensure high conversion. New generation paytech enables easy self-onboarding for merchants and integrates them with all available payment solutions at a low price.