Inside Adyen: Why Adyen Chose To Pivot From Enterprise-PSP to Full-Stack Acquirer
The acquiring market today is a tale of two worlds: legacy players with decades of experience and fast-growing disruptors reshaping the landscape.
On one side, established acquirers like JPMorgan Chase and Worldline have built expansive networks and entrenched themselves in the fabric of global commerce.
On the other, companies like Adyen, Klarna, and Stripe are rewriting the playbook, leveraging innovation, customer-centric strategies, and in-house technology to challenge the status quo.
These disruptors aren’t just competing; they’re defining the future.
From Klarna’s dynamic adoption of Buy Now, Pay Later to Stripe’s horizontal expansion and modularity strategies, each has charted a unique path to success.
In this newsletter, we’ll examine Adyen.
The Dutch-based Payments superstar continues to expand globally as a true Full-Stack Payments company.
However, this wasn’t always the case. They started out as an Enterprise PSP and, through a series of challenges, recognized the opportunity to become an Acquirer and change the industry forever.
We’ll explore what created the environment that led to that, the early strategies that enabled this shift, the competitive dynamics that drove the decision, and the lessons it holds for payments companies navigating a fast-changing industry.
Understanding Adyen’s journey isn’t just about tracing its rise; it’s about uncovering insights that could shape your own approach in this complex and competitive space.
When At First You Succeeded but Exited To Early
Adyen’s story didn’t start in 2006, it began almost a decade earlier with Bibit Internet Payments, a pioneering Dutch payment company founded in 1997.
Bibit was ahead of its time, offering businesses like DaimlerChrysler, The Financial Times, and Fleurop Interflora the ability to accept a wide array of online payment methods across multiple channels, including webshops and call centers.
The company quickly gained traction across Europe and the U.S., building an impressive roster of international clients.
In 2004, Bibit was acquired by the Royal Bank of Scotland (RBS) in what was hailed as a lucrative exit for its investors.
Yet for its founders, including Pieter van der Does and Arnout Schuijff, the sale left a lingering question: had they sold too early?
For the Bibit team, the market still felt untapped and full of potential.
The fragmented nature of global payments infrastructure presented massive challenges for merchants, and the internet’s rapid expansion promised even greater opportunities.
The acquisition by RBS offered financial success, but it also exposed the limitations of working within a larger, slower-moving institution.
This frustration, coupled with the belief that the payments industry was still in its infancy, fueled the founders' desire to start fresh and build something even bigger.
Let’s Do It Again…
That is why, in 2006, Pieter and Arnout decided to do it again, but this time, with a wealth of experience and more financial flexibility to do it better.
Many of the original Bibit team reunited, spending over 18 months crafting a new vision for payments and writing nothing but code.
They aimed to address the inefficiencies they’d seen firsthand: disjointed systems, multiple providers, and limited scalability.
Their goal wasn’t just to replicate Bibit’s success but to rethink payments entirely.
The name Adyen, derived from a Surinamese word meaning "to start over" or "to do it again," reflected this ambition.
With Adyen, they sought to create a unified payments platform that could meet the evolving needs of global merchants and solve the challenges they had only begun to address with Bibit.
It was more than a second attempt, it was a statement of unfinished business in the payments revolution.
The Strategies That Formed Adyen
For any startup to succeed, Strategy is extremely important.
To form a winning strategy, it is important a company needs to:
Diagnose the current landscape and the challenges accurately.
Develop a Wider Approach that allows a company to overcome obstacles by staying flexible.
Develop a Plan of Action in which a set of coordinated steps are followed to execute the approach.
While many Strategy courses have described this in several ways, this is what it boils down to, and is exactly what Adyen did.
Let me explain.
Customer-Centric Problem Identification
From the beginning, Adyen focused on deeply understanding the challenges faced by its enterprise customers.
This approach, known as customer-centric problem identification, involved more than just listening to feedback, it involved immersing themselves in their customers' operations.
Early clients like Booking.com and Groupon clearly illustrated the fragmented nature of payments infrastructure. Global merchants were forced to work with multiple providers for gateways, acquiring, and fraud management, resulting in inefficiencies, high costs, and operational complexities.
Adyen’s leadership recognized that solving these problems required more than incremental fixes. Instead of offering off-the-shelf solutions, they worked closely with clients to understand how payments could drive business growth, and build products that would address that need.
Which they translated internally as “We build to benefit all customers (not just one)”.
This mindset, later down the line led to them landing international merchants, that focused on solving challenges others hadn’t figured out yet.
For example, Spotify needed a seamless way to handle subscriptions across multiple countries, while Uber required a payment system that could scale with its rapid international expansion.
By prioritizing these pain points, Adyen built a reputation as a partner that could simplify global payments. This made it easier for Spotify to focus on its core businesses while developing a solution that could benefit others who faced similar challenges.
This strategy didn’t just fall from the sky, it is a strategy that has proven successful across industries.
Companies like Amazon and Apple have similarly leveraged customer-centricity to redefine their markets, focusing on user pain points to deliver unmatched convenience and loyalty.
For Adyen, this approach wasn’t just about building better features; it was about building trust with merchants who wanted more than a vendor. They wanted a partner invested in their success.
In-House Technology Development
While many PSPs relied on third-party legacy systems to power their platforms, in retrospect, Adyen made a bold decision: to build their entire payments infrastructure in-house.
While it was clear that an Enterprise gateway was required to serve their core clients, the truth is that it wasn’t always as clear that they wanted to be a Full-Stack Acquirer.
As the volume in Adyen continued to grow and Digital Enterprise companies signed up, they realized that continuing to rely on outdated legacy infrastructure could one day lead to problems.
The choice to become an Acquirer wasn’t taken lightly or easily. However, once they did, their search for an infrastructure partner was even harder.
Realizing that most of the Acquirers were using legacy infrastructure, working with them would only shift the problem from the Acquirer partner to the infrastructure partner.
Reminded by their own principle, “We create our own path to grow toward our full potential”, the leadership team decided to build their own Acquiring Processing Engine.
This decision laid the foundation for their success and sprouted the development of additional value-added services such as fraud detection, optimization, and analytics.
By controlling the full stack, Adyen gained unparalleled flexibility and scalability, allowing them to adapt quickly to merchant needs and market changes.
Developing technology in-house required significant investment, but the benefits were clear.
Unlike competitors tied to legacy systems, Adyen could iterate rapidly and innovate without external constraints.
For example, their proprietary processing engine allowed them to optimize transaction routing, reducing costs and improving authorization rates for merchants.
This technological edge was crucial in winning enterprise clients like Facebook, who valued a payment provider capable of handling high transaction volumes with precision and reliability.
Companies like Tesla and Shopify have thrived under similar strategies, using in-house development to create highly specialized solutions that outperform generic alternatives.
For Adyen, this strategy became a cornerstone of their ability to differentiate from legacy acquirers and scale alongside the fastest-growing businesses in the world.
Full-Stack Integration as a Differentiator
Adyen’s decision to become a Full-Stack provider, integrating gateway services, acquiring, risk management, and analytics into a single platform revolutionized merchants' payments experience.
This approach eliminated the need for merchants to integrate multiple providers, reducing operational complexity and improving efficiency.
For example, Adyen’s analytics tools provided merchants with actionable insights into transaction performance while their risk management system proactively mitigated fraud.
By combining these capabilities under one roof, Adyen offered a seamless, end-to-end solution that legacy acquirers and fragmented PSPs couldn’t match.
This Full-Stack approach was particularly valuable for merchants like Booking.com, who required global coverage and consistent service quality across multiple regions.
This strategy echoes the success of companies like Apple, whose tightly integrated hardware and software ecosystems have created unparalleled user experiences.
For Adyen, Full-Stack integration wasn’t just a technical achievement it became a defining feature that set them apart from competitors and solidified their reputation as a payments innovator.
Strategic Positioning with Scheme Membership
However, one of Adyen’s most transformative early decisions was to become a principal member of Visa and Mastercard.
This decision often required deep pockets and led mostly banks, such as J.P. Morgan Chase, Barclays, or AIB (Allied Irish Bank), to take that step.
But by making this move it allowed Adyen to bypass traditional intermediaries, such as legacy processors, and take control of the entire acquiring process.
By directly connecting to card networks, Adyen reduced costs, improved transaction speed, and gained greater control over the payment flow.
Scheme membership also gave Adyen a significant strategic advantage.
Unlike competitors reliant on third-party relationships, Adyen could offer merchants more competitive pricing and faster settlements.
For global merchants like Spotify, this meant lower costs and a smoother customer experience, critical factors in maintaining their competitive edge.
This strategy mirrors how Amazon built its logistics network to bypass traditional carriers, gaining control over pricing and delivery times.
For Adyen, becoming a principal member was a key step in their evolution from a PSP to a Full-Stack acquirer. This enabled them to deliver unmatched value to merchants and cement their position as a leader in the payments industry.
Key Takeaways
Adyen’s journey from an enterprise PSP to a Full-Stack acquirer is a masterclass in strategic evolution and bold decision-making.
Their success lies not in following established paths but in forging their own, guided by customer needs, technological innovation, and a relentless pursuit of excellence.
Here are the key lessons from Adyen’s story:
Customer-Centricity Drives Growth
Adyen’s commitment to deeply understanding and solving merchant pain points set them apart. By building solutions that served not only individual clients but also broader market needs, they established trust and loyalty while creating scalable value.
In-House Innovation is a Competitive Advantage
By building its payments infrastructure from the ground up, Adyen avoided the limitations of legacy systems and gained the flexibility to innovate rapidly. This decision enabled them to stay ahead of market demands and secure a leadership position in the industry.
Integration Simplifies and Differentiates
Adyen’s Full-Stack approach eliminated complexity for merchants, offering a unified solution that combined gateway, acquiring, risk management, and analytics. This seamless experience became a key differentiator in a fragmented market.
Strategic Independence Fuels Control
Becoming a principal member of Visa and Mastercard allowed Adyen to bypass intermediaries, reduce costs, and control its acquiring process. This strategic move positioned Adyen as a trusted partner for global merchants and set the stage for its continued growth.
Adyen’s story is a powerful reminder that success in payments and any industry requires the courage to challenge conventions, the insight to identify unaddressed opportunities, and the determination to execute a vision.
Whether you’re a startup navigating your first steps or an established player looking to pivot, Adyen’s strategies offer valuable lessons on what it takes to innovate, adapt, and lead in a competitive market.
Their rise underscores a simple but profound truth: the payments landscape rewards those who dare to build a better way.
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