German payments provider outgrows country's biggest bank

Wirecard, based in a the Munich suburb of Ascheim, overtook Deutsche Bank by market value on Monday

Wildcard makes use of mobile technology and is now larger than Deutsche Bank. AFP

A payments provider that gets 5 per cent as much revenue as Deutsche Bank is now worth more than the German lender deemed by regulators to be one of the world’s most important banks.

Wirecard, based in a the Munich suburb of Ascheim, overtook Germany’s biggest bank by market value on Monday, riding a wave of investor enthusiasm for payments companies. The stock, which has climbed by more than 84 per cent this year, is set to join the country’s benchmark DAX index next month, possibly at the expense of Commerzbank.

Wirecard’s growth mirrors the success of Adyen a European-based payments start-up whose shares have more than doubled since their debut in June. Payments companies are popular with investors because they can profit from the rapid global growth of online commerce and the use of mobile devices for banking - without having to bear the costs of providing and managing long-term credit to the economy.

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Wirecard, whose market value stands at about €21.1 billion euros ($24.1 billion), provides software and systems for online payments and fraud prevention. Revenue at the 19-year-old company is expected to grow to about €2.5 billion euros by the end of 2019 compared with 1.5 billion euros last year. By contrast, Deutsche Bank’s revenue has fallen by more than 10 percent in the last three years and chief executive Christian Sewing has announced further cuts this year, leaving analysts sceptical about its ability to grow.