FDJ strengthens its position in payment services

La Française de Jeux, the French leader in gaming, intends to take advantage of its ideal positioning with tobacconists to develop a new activity of payment of public service bills and other everyday bills. The acquisition of Aleda should enable it to accelerate this diversification strategy.La Française de Jeux, the French leader in gaming, intends to take advantage of its ideal positioning with tobacconists to develop a new activity of payment of public service bills and other daily bills. The acquisition of Aleda should enable it to accelerate this diversification strategy.

FACTS

• The FDJ has published a press release about its entry into exclusive negotiations with Aleda, the software publisher (created in 2005), which notably offers Kapseo cash registers.

• Aleda is a specialist in cash collection solutions for local shops (bars, newsagents, etc.) and dematerialised payment services (telephone top-ups, prepaid bank cards, money transfers, etc.).

• Aleda has nearly 100 employees in France, spread over the sites of Limoges, Challans and Montpellier.

• Through its entity called FDJ Services, the gambling operator is building on the success of the "Proximity Payment" service developed for the Direction Générale des Finances Publiques (DGFiP) in partnership with the Confédération des Buralistes.

• The results of this first experiment:

• 6,700 French municipalities covered

• 13,400 tobacconists approved by 31 December 2021

• 2.5 million public bill payment transactions.

CHALLENGES

• Diversifying its business: This acquisition confirms FDJ's desire to develop its payment and services business. In 2021, this branch will represent only 2.8% of its turnover. It also reinforces the Group's commitment to supporting retailers by offering them value-added services to help them manage and develop their points of sale.

• Addressing the digital divide: According to a study conducted by Harris Interactive*, 20% of French people - i.e. 6 million households - are not charged for their daily bills. 56% are afraid of being defrauded when paying over the Internet and 1 out of 4 French people are unfavourable to the dematerialisation of payment methods. Given this situation and the huge challenge that invoice collection represents for companies, this new service, which will soon be available, could represent an interesting solution.

• Take advantage of a large territorial network: With the closure of bank branches, the tobacconist network provides an interesting solution for users for many banking services such as outsourcing the collection of their bills.

MARKET PERSPECTIVE

• This is FDJ's second attempt to buy a point-of-sale terminal operator, following its acquisition of Bimedia, which was rejected by the French Competition Authority in August 2020.

• When it was floated in 2019, Française des Jeux paid €380 million to the state to benefit from the gaming monopoly for 25 years. The European Commission must check whether this amount is fair. If it is insufficient, the bill could be very high. According to Citigroup, FDJ could have to pay €1.06 billion more than the amount initially paid.