£6 billion wiped from European payment firms amid market slowdown

More than £6 billion has been wiped from the combined market values of four of the biggest European payment firms in a matter of hours as investors braced for a string of earnings cuts in signs of bleak prospects for the sector.

French firm Worldline, which runs much of the TfL payments operations in London, saw its shares tank almost 60% after it slashed its full-year targets and said it had severed ties with some merchants to reduce the risk of cybercrime.

Analysts at JPMorgan said: "Worldline missed sales estimates in every division...These results are a disappointment in terms of the full-year miss and also that long-term targets have been discarded." 

Contagion spread to Italian payment peer Nexi and Dutch firm Adyen, whose share prices tanked 17% and 6% respectively.

Yesterday, London fintech CAB Payments saw its share price plummet more than 60% as markets opened this morning after it warned of a sudden slump in sales. 

The Sutton-based business, which achieved unicorn status after its debut on the London Stock Exchange in July, raising hopes for the end of a months-long IPO drought, has now seen its market cap collapse to around a quarter of its initial value as investor hopes for its rapid global growth were quickly dashed. 

CAB, which processes business-to-business cross-border payments and foreign exchange, said its fourth quarter revenue was set to come in 17% below previous guidance after market conditions crumbled, adding it was “unclear when and to what extent conditions in these markets may improve.” 

"In recent weeks, the company has seen a number of changes to the market conditions in some of its key currency corridors, on top of the ongoing uncertainties surrounding the Naira, which are impacting both volumes and margins,” the firm said. 

"These market conditions are compressing margins and reducing trading volume. These challenges are recent but continuing, and coincide with the traditionally strong fourth quarter." 

Analysts at Liberum said: “While we think the underlying business has a strong proposition with a large market, management's inability to foresee events and guide is a major concern.” 

CAB shares fell a further 9% today. There were also signs contagion was spreading to the US, with payments firm Block down around 4% in pre-market trading.