The news: Fintech SumUp expanded into consumer payments with a digital wallet for customers across Europe, per a press release.
Here’s how it works:
Why now? UK-based SumUp raised €590 million ($698 million) in a June downround that valued the point-of-sale payments provider at €8 billion ($9.5 billion). The valuation fell far short of the €20 billion ($22.6 billion) it reportedly targeted in January.
SumUp may be looking to diversify and grow by using its latest raise to expand into business-to-consumer (B2C) products. This would help it spread risk and tap demand in Europe for digital wallets so it can buck the wider economic downturn that’s hurt payment firms’ valuations.
Why it could work:
The bottom line: Mobile wallets are poised to pick up more consumers as cash use declines and digital payments become more popular. But SumUp faces stiff competition in the UK and Europe from more established firms like PayPal and Block, which also offer digital wallets and POS payment methods. If it can outcompete rivals, SumUp can capitalize on a market forecast to grow 22% compounded annually to hit a value of more than $16.2 trillion by 2031.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.