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CORRECTED-Dutch fintech Adyen sees 80 pct jump in 2016 payment volumes
February 8, 2017 / 2:04 PM / in 8 months

CORRECTED-Dutch fintech Adyen sees 80 pct jump in 2016 payment volumes

(Company corrects number of retail outlets using Adyen payment terminals in seventh paragraph to 2,700 stores from 1,400 stores)

By Eric Auchard

FRANKFURT, Feb 8 (Reuters) - Adyen, one of Europe’s biggest fintech companies, reported an 80 percent jump in 2016 payment transaction volumes to $90 billion powered by some of the world’s biggest online players and expansion in Asia and the Americas.

The Dutch company handles cross-border payments for ecommerce giants Uber, Spotify, Airbnb, and Booking.com, advertising for Facebook and Twitter and ads and subscriptions for LinkedIn.

It accepts payments from hundreds of national and regional payment systems.

Chief Commercial Officer Roelant Prins said he expects growth this year to be driven by its new in-store payment systems as well as by clients preparing for major changes in European payment regulations expected in early 2018.

Adyen’s expansion beyond online payment processing to in-store payment systems contributed around 5 to 10 percent of 2016 transaction volumes, Prins told Reuters in an interview, referring to the company’s preliminary results.

“We expect to grow quite significantly. Over the next few years it will move to 50 percent of our business,” he said.

More than 2,700 stores in Europe and the United States now use its point-of-sale systems, with clients including fashion retailers Burberry and Tory Burch and cosmetics brand L‘Oreal.

GAINING GROUND

Prins said the company expects to continue to grow at similar levels in absolute volumes in 2017, adding another $40-50 billion in payment transactions, although at a slowing overall growth rate.

While still far smaller, Adyen is closing the gap on established peers. Worldpay reported 11 percent growth in first-half transactions to 217 billion pounds ($270.9 billion) and will publish full-year results next month.

Silicon Valley-based PayPal reported $354 billion in transactions in 2016, up 26 percent.

Much of Adyen’s revenue comes from major online clients, but Prins said it is also seeing growth among mid-market customers looking to adopt the same state-of-the-art payment systems as the likes of Uber and Spotify.

Its client base in 2016 expanded to 4,500 from around 4,000 in 2015, he said.

The European Commission’s forthcoming Payment Services Directive 2 (PSD2), set to come into force in early 2018, is set to open up competition in the payments industry.

It is also expected to put pressure on merchants to strengthen customer security protections, which could play to Adyen strengths.

Prins said the directive is expected to fuel growth in Europe and among overseas clients in 2017 as they race to make their payment systems “PSD2 ready”.

Half of its 2016 payment volumes came from Europe and 20 percent from the United States.

“Global brands looking to take full advantage of the European market will need a player ready to help them make sense of this evolving market,” Prins said.

The company, which has been profitable for five years, increased its profitability during 2016 Prins said. He declined to provide details until the company’s audited figures are ready around April.

Adyen enjoyed strong growth in Asia including Indonesia, the Philippines, Singapore and Australia. Brazil, Mexico and the United States also grew strongly, Prins said.

The Amsterdam-based company backed by wealthy tech investors including Facebook’s Mark Zuckerberg was last valued at $2.3 billion in 2015.

Adyen has no plans to raise fresh capital and is in no rush for a stock market listing in 2017, Prins said.

$1 = 0.8010 pounds Editing by Jason Neely

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