Payments processing is big business and – as is often the case in industries of this size – it's dominated by a few large names in the US. In this instance, companies like PayPal, Visa Inc (V) and, increasingly, Stripe, control large portions of the market.

Outside of the US, however, things are a little more fragmented. The industry is still dominated by a number of big names, but smaller (and when I say smaller here, I still mean multi-billion dollar market capitalization) entities are drawing market share from their incumbent peers. Primarily, this is driven by the speed of innovation and an adaptability that the larger players are unable to accommodate.

I believe these 'smaller' players have the potential to make rewarding exposures over the coming decade as they revalue to reflect their increased market share.

Wirecard AG (FRA:WDI)(WRCDF) is a company in the digital payments space, with assets including online payments, mobile payments, and point of sale systems. The company offers a comprehensive lineup of payment services for businesses, primarily in the European market (but expanding internationally). Its service offerings include payment systems, card issuing, risk management technologies, customer services and loyalty programs.

I think this company is one of the best representations of the above-outlined thesis.

Earlier this month, Wirecard held an earnings conference call for its Q1 results. Alongside the primary numbers, executives (as is generally customary) gave some indication of where the company is focusing its resources in its efforts to achieve growth.

Here's a look at some of the key points from the call and how they play into my thesis on the stock.

The main speaker in the conference call was Marcus Braun, the company’s CEO, CTO, and a member of the management board. In his section of the call, he highlighted several financial metrics the company attained in that quarter. A main point of emphasis in the presentation was digitization. As most readers will be aware, digital payments are increasingly dominating financial transactions worldwide. Wirecard aims to be a leader in the growing digital payments space, offering a wide range of digital payment options.

Management is confident that its q1 financial results are a vote of confidence in its strategic plan.

Overall, the company saw strong growth across the board. The company increased its first quarter transaction volume by 34%, which translated into a revenue increase of 31%. The company’s Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) increased by 31. Call participants also touted strong cash flow development, which increased by 32%.

Part of the revenue growth was driven by 2 acquisitions, both involving Citigroup Inc(NYSE:C); that of Citi Prepaid Portfolio and that of Citi’s Asia Merchant Portfolio. The company also completed a number of smaller acquisitions in South Africa. Based on these acquisitions, Wirecard is expecting a revenue contribution of $200 million and an EBITDA contribution of $20 million, stemming in part from the previously mentioned acquisitions.

According to CFO Bernard Ley, most relevant financial figures for the company have increased by about 30%. In the interest of balance, however, it's worth noting that the company’s tax burden was higher than in previous quarters.

During Q1 2017, cash flow was a major priority for the company. it eliminated [gross] effects on the balance sheet, specifically in the positions of receivable and payables in Wirecard's acquiring business. The company’s operating cash flow was 32%, while the cash flow from banking operations added to that considerably.

Also worth noting, and as highlighted by Ley on the call, is the seasonal nature of the business. Q4 corresponds to the Christmas season, which tends to be a highly profitable year for payment companies, for obvious reasons. Wirecard’s Q1 cash flow was slightly lower than its Q4 cash flow, but, as management pointed out, and as I've just mentioned, this falls in line with expectations.

In addition to pursuing growth and acquisitions, Wirecard also did some aggressive hiring in Q1 2017. Compared to the same quarter in 2016, the company’s total staff increased by 700 individuals. This is a one-time cost and not representative of the company’s recurring expenses.

Management was also quick to note that, although revenue increased, so too did operating costs. Most of these costs were related to the 1-time transaction costs associated with acquiring the Citi properties, however, and the company is expecting that these acquisitions will eventually generate revenue that will more than pay for the cost of acquisitions.

No surprises there.

For me, these acquisitions are about more than revenue generation, however. They serve as a springboard into the US market – something that the company has sought to achieve for the better part of the last half-decade but has – until now – failed to execute on. If they pay for themselves in revenues, great. If not, or if it takes longer for them to do so than expected, there's plenty of nontangible value in the company's US presence.

In 2015, Wirecard generated €5.6 million in revenue. In 2016, this rose to €7.5 million. This points to strong growth for the company. Ley described the revenue growth as “sharp,” but was quick to point out that it was driven by acquisitions that will add leverage to the company’s balance sheet.

Ley also touched on the company’s cash flow conversion. The company’s goal is to be above 65%. On that topic, Ley said: “With regard to EBITDA, you see we are well on track to achieve this target over the next 3 years as well.”

Looking at things from a bit more an operational perspective as opposed to a quantitative one, a major source of growth for the company was its mobile initiatives. Mobile phones are playing an increasingly important role in the payment industry, and Wirecard is investing big, with a number of mobile payment technologies.

Alongside the optimism on the call, and somewhat in contrast to its overall tone, management also highlighted a number of risk factors: increasing personnel expenses, the cost of materials, and the fact that some of the company’s M&A activities took place in North America, where salaries tend to be high.

Nonetheless, and as I've mentioned above, management was also quick to point out that several expenses seen in Q1 2017 were one-time expenses. Naturally, these expenses will decrease or even be eliminated over time.

One concern for Wirecard in its recent operations is taxes. Until recently, the company's tax rate was around 15%. However, management is expecting its tax burden to increase to 17-18% in the coming years. Again, this pertains to acquisitions. Citi, for example, operates in a jurisdiction with a tax rate of 35%. While management is confident that the strong growth will continue, tax and regulatory issues remain an area of concern. As CEO Markus Braun said, "all the indications are strong that it will perform better than we expected."

So what's driving growth going forward?

Wirecard has major plans for the future. As a digital payments company, it is banking on the convergence of Internet technology in all sales channels, and the replacement of cash with digital payments. These are all very real, existing trends, which benefit Wirecard as a company.

To sum this up, then, Wirecard has built a fully digitized payment platform in anticipation of the growth of online transactions. To that end, it has acquired a number of other companies in the same space. However, the company is not content to be simply a market leader in Europe. It has its sights on Asia, Latin America, and other continents. It's currently active on five continents and management used the latest call to reiterate a commitment to achieving a global reach and becoming one of the world’s leading digital payment providers. One of these commitments is already achieved. The other, the latter, I believe could be just around the corner.