Electronic payment processing is a multi-billion dollar a year industry.
Encompassing banks, card processors, online payment services and dozens of
other financial companies, the industry does over $75 billion in revenue
annually. The Automated Clearing House (ACH) Network alone processed over
$25.5 billion in sales last year, including both debit and credit card
In the developed world, payment processing is an established business.
Despite all the innovation going on, most businesses and consumers in
developed countries have access to adequate payment solutions. For this
reason, it’s likely that future growth in the payment processing industry
will be driven by the developing world. Companies in the payment processing
space may benefit from moving outside their neighborhood and into countries
where the industry has room to grow.
Wirecard AG (FRA: WDI) is one company that is following such a policy. It’s
a German-based IT company that specializes in payment processing and mobile
payments. According to their own website, the company’s mission is to
“mitigate the complexity of payment processing and make online payment for
merchants and consumers transparent and secure.” To that end, the company
has developed a number of innovative solutions, including standard payment
processing, mobile payments, fraud prevention services, and more.
In this article, we’ll explore Wirecard’s market strategy, explaining the
company’s unique approach to this dynamic market. We’ll show how the
company plans to make payment processing faster, easier and more secure,
for businesses as well as customers. We’ll explain the company’s products
and services, including the broad product categories they operate in.
Finally, we will show how the company is using partnerships and
acquisitions to expand aggressively worldwide.
We’ll start by looking at the company’s plan for penetrating the global
A Unique Market Strategy
Wirecard is pursuing a unique market strategy in the payment processing
space. Whereas most IT companies in this industry, like Paypal and Square,
have a dedicated focus on one main service, Wirecard is pursuing a more
diversified approach. Rather than focusing on one main area, the company is
determined to cover a broad spectrum of payment processing products and
These products and services will include credit card processing, mobile
payments, Point of Sale systems, fraud prevention services, and much more.
The company has dozens of offerings, catering to a wide variety of
industries. The ultimate goal is to build a highly diversified sales
pipeline with a broad array of clientele, from small businesses to Fortune
So far, the company has had some success with its chosen market strategy.
It has over 25,000 customers, about 3600 employees, and connections with
more than 200 payment networks worldwide. This growth has been gradual but
consistent, with the company adding new customers, employees and networks
Wirecard Products and Services
Following from Wirecard’s diversification strategy is a commitment to
product and service development. Wirecard’s total product and service
offerings are too numerous to list here. They can be summarized in a few
Payment Processing. The company offers a wide variety of payment solutions,
including credit card processing, SEPA direct, and in-app payments.
Risk Management. The company also offers risk management solutions like
fraud prevention, credit worthiness checks, and individual solutions.
Issuing. Through its subsidiary, Wirecard Bank, the company also issues
credit cards in all 33 countries in the Single Euro Payments Area.
Integration and Testing. Wirecard supplies a number of tools for testing
and integrating payment systems, including enterprise integration,
transaction testing, payment hub, customer self-select PIN and secure
Consulting Services. Wirecard Communication Services GmbH offers premium
consultation and information services, including outsourced customer
Value-Added Services. Last but not least, Wirecard offers a number of
services that add value and strengthen customer loyalty. These include
ConnectedPOS, a POS platform for brick and mortar stores, and Card-Linked
Offers, a customer loyalty program system.
This is a massive number of product and service offerings for one company.
Wirecard’s management is quick to point out that, although its offerings
are diverse, the company has, and always will have, a primary focus on
payment processing, including mobile payments.
The Three Pillars Of Wirecard’s Mission
Wirecard’s mission, as stated earlier, is to “mitigate the complexity of
payment processing and make online payment for merchants and consumers
transparent and secure.”
This mission has three key pillars. The first is ease-of-use, which
mitigates complexity by making products easier for businesses and their
customers to use. The second is transparency, a commitment to being honest
with their customers on topics like fees, safety, transfer times and other
areas of critical importance. The third is security, which means a
commitment to providing encrypted networks that keeps clients’ money and
Wirecard’s management believes that by offering easy-to-use, transparent
and secure services, the company can win a large clientele in a diverse
array of industries worldwide.
Global Expansion: Partnerships and Acquisitions
Global expansion is a key priority for Wirecard. The company already offers
payment processing in the 33 member states of the Single Euro Payments
Area. This shows a significant commitment to expansion outside Germany. The
company is also highly committed to expanding beyond Europe.
Noting the fast growth observed throughout Asia, the company has pursued
significant partnerships in that region. The company has relationships with
over 200 payment networks, including many in the Asia-Pacific region. It
has partnered with companies, industry leaders and banks in the region as
Wirecard is also pursuing its global expansion through acquisitions. In
2009 it acquired the Singapore-based financial services business, E-Credit
Plus. In 2012, the company made a second M&A transaction, this time in
Indonesia. In 2015, the company made waves with its acquisition of the
Great Indian Retail Group’s payment business. In 2016, the company entered
the North American market with the acquisition of Citi Prepaid Card
Services. This is an aggressive acquisition history that shows the company
has its eyes set on growth.
The payment processing industry is seeing significant growth worldwide.
Wirecard AG hopes to tap into that growth, through a combination of direct
service offerings, partnerships and acquisitions.
The company has expanded well beyond its traditional European base,
offering its services to customers in Asia, Latin America, and beyond.
It has established a number of strategic partnerships worldwide, most
notably with over 200 payment processing networks.
It has conducted a number of acquisitions, in East Asia, India, Latin
America and even North America.
Finally, the company has developed a diverse and broad-reaching product
line that it hopes will help with its global expansion.
Only time will tell if these efforts will pay off. If the company’s
aggressive plays are any indication, they may become a force to be reckoned
with in the global payments industry.