On Wednesday, I bought a 60p pack of chewing gum with my debit card.
A few years back, I would have fished around for some coins rather than use plastic for such a tiny purchase. Cards were for bigger, more serious transactions, such as groceries or a sofa. No longer. In this new era of contactless payments, where you can touch your card to a screen and it magically subtracts cash from your account, plastic is king.
This bodes well for Worldpay, Britain’s biggest payment processor. The FTSE 100 company has done well since its blockbuster stock market float in October, gaining 25% to close on Friday at 300p.
When it unveils maiden annual results on Tuesday, analysts expect it to reveal a 12% rise in turnover to £970m. Pre-tax profits are likely to be an improvement on the £52m loss last year. By how much depends on several factors: the residual costs of its separation from former parent RBS, currency swings and falling fees.
What is clear is that Worldpay is in a privileged position in a rapidly changing industry. Its challenge is to not become the Yahoo of its sector, an early leader left behind by smarter, savvier rivals.
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Financial technology, or fintech, is all the rage. There are now well over 300 payment methods in use, from Bitcoin to Paypal to contactless terminals.
There are ever more takeovers. Worldpay has picked up a few smaller developers, and may scoop up more, especially in America, where it remains a niche player.
It is also nearing the end of a £500m scheme to build a new payments platform that works across many fast-growing segments, from Apple Pay to purchases made from mobile phone apps.
The key will be its ability to push beyond what it has traditionally been good at — taking fees to process payments — into add-on services such as analysis of customer data and fraud protection.
It’s Worldpay’s game to lose. After a recent bout of profit-taking sent the stock into a slide, now is a good time to have a punt that it won’t get overhauled the way Yahoo did. Buy.
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danny.fortson@sunday-times.co.uk mailto:danny.fortson@sunday-times.co.uk