Fintech Firms Like Worldline Caught Naked as Tide Goes Out
Payments middlemen have few places to hide as consumer spending slows.
Gilles Grapinet, chief executive officer of Worldline SA.
Photographer: Nathan Laine/BloombergA rising tide lifts all boats, but only when it goes out do you see who’s been swimming naked, as Warren Buffett famously said. So it is for the boom in digital payments and online shopping, which drove huge investor enthusiasm for all tech middlemen shuffling payments from A to B and taking cuts along the way. Now the sector is revealing hidden nasties as recession looms.
French payments firm Worldline SA is the latest to get burned. The company’s stock plunge of as much as 59% after it reported third-quarter earnings on Wednesday comes after a fintech reckoning that’s already hit the likes of Paypal Holdings Inc., Block Inc. and Adyen NV, which are collectively down about 80% in two years; throw in Italy’s Nexi SpA and the value destruction since then has been about $450 billion. Worldline’s scrapping of its growth targets for 2024 and downgrade to expectations for this year suggest the bad news still might not be over for a sector whose sales expansion is already expected to cool to around 10% next year from about 30%.