Cross-border payments has been one of the most significantly impacted segments of the global financial industry. We have benchmarked against the overall UK and US stock markets where most players are listed (i.e. the FTSE 100 or S&P500). Overall, even though the markets have bounced back a little over the past few days, most payment companies’ stocks are still down.
A mix of effects are pulling some companies up, but most of them down:
- Travel for both businesses and consumers is significantly down and it remains to be seen for how long this dip will continue. Companies exposed to travel spend and cash (such as Finablr, Ebix and Euronet) have really felt the hit.
- Technology, in particular contactless payments are being encouraged, especially with fears of the spread of the virus via banknotes. The large payment processors have seen predominantly business as usual with much of their work powering the day to day payments of economies.
- With traditional supply chains impacted and more people staying at home, ecommerce may see some boosts, especially in countries outside of China. But anyone reliant on a supply chain involving China and therefore payments to China are having a challenging time.
Herd mentality of the markets often leads to over-reactions. What we do not know yet is how close we may be to the bottom or is there still further to go.
Finablr, owner of Travelex
As a footnote, Finablr is down a further 20% today as of 2pm London time. Maybe this experience at a Travelex cash machine at Heathrow Airport on Tuesday helps explain why:
- Debit personal account: GBP200
- Cash received: Zero
- Comment by clerk: We know the machines are broken (but no offer of the GBP200 was made).
Right now, we’re still down 200 pounds, Finablr a lot more.