Payment Service Providers: Fewer Transactions… Fewer Commissions?

The rise of e-commerce has helped payments players stay afloat in a difficult year. “The decline in purchasing power in the eurozone is weighing on consumption and transaction volumes. However, inflation still made it possible to compensate for the negative volume effect with the price effect., notes Paul Charpentier, analyst at Bryan, Garnier & Co. The result: shares of payment service providers (PSPs) came under pressure. Worldline, which left the Cac 40 on Monday after its valuation melted like snow in the sun, has seen shares fall 58% in one year. PayPal (-17%), Adyen (-10%) and Nexi (-2%) also lost.

According to Morningstar’s Niklas Kammer, “The decline in share prices in the sector can be explained by the rise in interest rates, which has encouraged investors to shift their focus from growth stocks to income stocks”. But even if they’re slowing down, the PSP business isn’t doing badly: Worldline, Nexi and PayPal’s sales are up 7% to 8% in the first nine months of the year. Adyen fared better with growth of 22%. This is partly explained by its leading positions in e-commerce, with its European competitors Worldline and Nexi deriving most of their revenue from brick-and-mortar.