Cryptocurrency is the future lead of the payment system

15.Apr.2019 | Editorial

The merger between Fidelity National Information Services (FIS) and Worldpay is just the latest chronologically but the biggest in the payment system. Fidelity, an international provider of financial services technology and outsourcing services headquartered in Florida, has acquired Worldpay, a payment processing company and technology provider headquartered in Ohio area. They agreed on an amount of $ 43 billion.

A world giant is born: according to Bloomberg it is the largest in the world. The combined company will also have pro forma 2018 annual revenue and adjusted EBITDA of approximately $ 12 billion and $ 5 billion, respectively. Through 2021, FIS expects organic revenue growth outlook of 6% to 9%.
Worldpay merged with Vantiv,a leading credit card processor and POS solution provider for businesses of all sizes, just over $ 10 billion two years ago. There were many M&A in the industry last year: 104 transactions with a combined value of $ 46 billion have been completed in the first half of 2018 ($ 32,9 billion in 2017). PayPal made four acquisitions in May and June 2018.
There is some sort of commotion also in Italy: Nexi, paytech which builds the future of electronic payments in Italy, is getting ready for stock market with some of the major European IPOs of this year. For the past number of months there has been talk of a possible merger between Nexi and Sia, is European leader in the design, creation and management of technology infrastructures and services for companies. However, this hypothesis seems to be far away right now.

Not for nothing especially these startups the financial markets lead the financial markets. The increasingly limited circulation of cash is making new giants offering e-banking services that they are quicker, safer, more transparent and customized according to the requirements of the customer. This is a breeding ground for all of the players providing instant money transfers through cryptocurrencies (above all bitcoin and ripple) and stablecoins. JP Morgan and IBM lead the group through platforms specifically designed for transactions made between institutional accounts and in the B2B market. JP Morgan has mined its stablecoin called JPM Coin, pegged to the dollar and specifically dedicated to institutional accounts. When the client sends money to an other one out of the blockchain, the digital coin is transferred and instantly redeemed to get the US dollar equivalent, without any money transfer times.

IBM, jointly with Stellar, has launched the cross-border payment network called Blockchain World Wire. It supports more than 47 currencies in 72 countries. The firm is already working with two American banks and with six credit institutions for delivering a token pegged on an equal footing with a fiat like US dollar or euro. This is some kind of consortium which would enormously encourage operations between banks (and their clients). Head of Blockchain Solutions, Financial Services at IBM Jesse Lund said that this process was developed in fast motion mode after the great media excitement connected to the JPM Coin.

These are the two most important examples of a virtuous circle under construction. JP Morgan and IBM are two benchmarks for all of the operators who aspire to enter the field and provide customers with considerable investment wallet. Consulcesi Tech serves as partner for numerous institutional clients and large companies for counseling services to entities interested in merge and acquisition through criptocurrencies and stablecoins. Fintech is growing very fast and will reach three trillion dollars in 2023, according to estimates by American worldwide management consulting firm McKinsey & Company. Huge numbers that move from one account to another in real time thanks to criptocurrencies and blockchain. Let’s forget briefcases full of money and bank guarantees emblematic of complicated bureaucracy. You can now acquire a firm just a click away.