Dutch payments processor Adyen has set its sights on becoming a bigger player in the U.S. market, and it’s expanding its presence in the Midwest as part of that effort.

The company’s North America president, Brian Dammeir, was in Chicago this week to formally open a new tech hub in the city. It’s one of two that Adyen announced in February, with the other being in Madrid. 

At a coffee shop in Chicago's West Loop neighborhood for an interview this week, Dammeir pointed to Google’s building across the street as he explained why Chicago was the best place for the company to create the new hub. Other major tech players also have a significant presence in Chicago and have been expanding there in recent years, including social media company Facebook parent Meta, online retailer Amazon and payments player Braintree, which was acquired by PayPal in 2013.

In attracting a pack of big technology companies over the past decade, the city has accumulated a wealth of tech talent with help from a slew of state and private universities in the region, said Dammeir, who is based in the company's biggest North American office in San Francisco. In addition, Chicago offers extensive commercial real estate for a new office at reasonable rates and a major airport, he added.

For now, Amsterdam-based Adyen’s Chicago operations are located in temporary quarters at a WeWork building that has dedicated space to the processor. Eventually, the company will have its own space and Dammeir expects to populate it with hundreds of employees. He declined to say how many Adyen employees are working at the Chicago office now.

“We’re really a viable domestic player in this market,” Dammeir said in an interview regarding the “hyper-growth” strategy. “Chicago shows we’re serious about North America.”

Adyen, which currently has about 2,500 employees worldwide, has posted online for hiring in 14 different roles in Chicago, from software engineer to project operations manager to senior technical recruiter. Adyen had about 200 employees in San Francisco as of the end of last year and about 70 in New York, according to its second-half financial report issued in February.

The company has relocated some existing employees to Chicago to fill the tech hub, including Bert Wolters, Adyen’s executive vice president of technology who was based at the Amsterdam headquarters until this month.

In making its bid to grow in North America, Adyen is taking on sizable competitors, including established processors such as Jacksonville, Florida-based Fidelity National Information Services (FIS) and Brookfield, Wisconsin-based Fiserv as well as new fintech peers like Stripe, with dual headquarters in San Francisco and Dublin.

Adyen increased its U.S. market share relative to merchant acquirer rivals last year and ranks No. 8, based on U.S. payments dollar volume, according to the industry consulting firm The Strawhecker Group. Adyen mainly trailed much older competitors such as FIS and Fiserv, but outranked younger fintechs like Stripe. 

Adyen, founded in 2006, already has a sizable North American clientele, and being closer to those customers, including in the Midwest, is another benefit of building out its presence in Chicago. Among its Midwest clients is Chicago-based McDonald’s, which has its headquarters just down the street from Adyen’s new Chicago outpost. It also counts Beaverton, Oregon-based shoemaker Nike, the Coraopolis, Pennsylvania merchant Dick’s Sporting Goods, and Milford, Connecticut sandwich chain Subway as clients.

Adyen has won over tech-centric companies that have similar upstart cultures and appreciate its "fresh way" of approaching the business, especially with respect to e-commerce, said Trevor Forbes, who is director of market intelligence at TSG. "Adyen offers more of that unified, clean experience that seems to resonate" with merchants, Forbes said by email. He declined to say whether Adyen is a TSG client.

With respect to servicing other fintechs, customers include the Boston-based restaurant payments company Toast and Bellevue, Washington-based spa software provider Zenoti. 

The U.S. business has already helped make North America Adyen’s second-biggest market after Europe, Dammeir said, even though it also has operations in Asia and Latin America.

In addition, Adyen has been building its U.S. business with the help of the U.S. banking license it acquired, giving it "greater operational scale and services," Forbes said by email. The company received that bank branch charter last year with approvals from the Office of the Comptroller of the Currency and from the Federal Reserve. 

In the second half of last year, the company’s net revenue surged 47% over the same period in 2020 to 556.5 million euros ($597 million), according to the company’s financial statement. The company also said earnings before interest, taxes and depreciation rose 51% to 357.3 million euros.

The net revenue from its North America business grew at an even faster 70% clip to 131.3 million euros for the second half, relative to 2020, the company said. It now makes up about a quarter of Adyen’s net revenue, Dammeir said.

“Now, as we exit the reaction phase of COVID, we’re seeing a second wave of innovation as merchants across other verticals – e.g. hospitality, large-format retail, leisure – are increasingly aware of the impact of consumer preference shifts,” Dammeir said in a North America update included in the report for the second half of 2021. “Our newly acquired federal branch license should help us be able to fully meet these merchants' needs.”

By Lynne Marek on May 27, 2022
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