Executives at Ingenico SA see an opportunity to boost the France-based payment-terminal maker’s market share in North America, where a shake-up has occurred over the past few months involving the region’s top two vendors.
Ingenico believes it can regain its position as the region’s second-largest terminal provider based on revenue, Thierry Denis, Ingenico president for North America, tells PaymentsSource. The company’s share of the market fell from second to third position in the U.S. this year as change rocked the terminal market.
In August, Gores Group LLC, a Los Angeles-based private equity firm, bought No. 2 vendor Hypercom Corp.’s U.S. terminal business (
Last month, Gores rebranded Hypercom’s U.S. operations as Equinox Payments LLC (
Earlier this year, Ingenico had expected to buy Hypercom’s U.S. operations, but the U.S. Justice Department blocked the purchase because it would have reduced competition by leaving the U.S. with just two major terminal makers (
Anticipating the purchase, Ingenico “took its foot off the gas in the second quarter,” allowing its sales to fall and its market share to dip, says Rick Oglesby, senior analyst with the Boston-based Aite Group LLC. Ingenico’s North American revenue plummeted to a projected $81 million this year from $142 million in 2010, he says.
“They have a lot of ground to make up, but the stars are aligned for it,” Oglesby notes, adding that Ingenico is introducing the Trillium platform in North America and needs to “make a big splash” with it.
The market sees a need for only two strong players, and Ingenico intends to be one of them, Denis says.
The company’s extensive experience abroad should serve it well here, Denis contends. Visa Inc.’s push for proliferation of EMV in the U.S. and a movement here toward Near Field Communication for mobile payments both favor Ingenico because of the company’s experience with those technologies in other countries, he says.
“It is a great opportunity for us,” Denis says. “We have been doing smart cards since Day 1.”
But calculating the size of the opportunity remains difficult, Denis say. No one knows how many North American terminals will need replacement instead of just a software update to accommodate EMV and NFC. VeriFone and Equinox are reluctant to share that information, he says.
Ingenico hopes to certify its latest products with nine or 10 major payment processors in North America in the first half of next year, Denise says. It then plans to turn its attention toward independent sales organizations, he notes, adding that pursuing acquirers now would be premature without the processor certifications in place.
ISOs may deploy Ingenico hardware and then sell merchants white-label value-added functions, including gift cards and transaction-management software, Denis says. The functions give small retailers functions that only national merchants have had in the past, such as instantaneous information, he says.
Denis has been with Ingenico for 21 years, mostly in the company’s Asia-Pacific operations. He took on his current job earlier this year.
“We arrived here in April to run the North American region,” he says. “It is great opportunity for us because we are here at the right time.”
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