Worldline shares drop over 41% on allegations of fraud cover-up
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More news: Shares in European payments processor, Worldline, continued their descent on Wednesday, falling over 40% by 1:35pm in Paris, wiping around €500 million ($894 million) from the company's market value.
The share price fall came after Dutch, German and Nordic outlets reported that the firm had continued doing business with prohibited and high-risk customers and had failed to stop fraudulent transactions being processed on its platform. The investigation was reportedly based on confidential internal documents and data from Worldline.
Worldline shares drop over 20% on media allegations of fraud cover-up
The news: An investigation titled ‘Dirty Payments’ led by European journalism network EIC and 21 media outlets reported that Worldline allegedly covered up fraudulent activity by customers.
The numbers: Shares in Worldline plummeted almost 23% by 11am in Paris on Wednesday morning, seeing €300 million ($536 million) wiped from the payment firm’s market value. Trading in the company’s shares was halted several times on Wednesday.
The context: Media reports by Dutch, German and Nordic outlets reported that the firm had continued doing business with prohibited and high-risk customers and had failed to stop fraudulent transactions being processed on its platform. The investigation was reportedly based on confidential internal documents and data from Worldline.
Dutch newspaper NRC alleged that in “recent years” Worldline “looked away” from lucrative customers with high fraud rates even as its risk management department pressed for stricter checks.
Another report said that in efforts to reduce fraud rates for clients, it would shift fraudulent customers to other divisions to evade detection. In one instance, Worldline allegedly moved multiple high-risk clients from Worldline Belgium to its Swedish subsidiary to hide them there after credit-card provider Visa Inc. raised alarms.
The payments giant which handles hundreds of billions of euros in transactions annually and had a market value of €1.3 billion at Tuesday’s close, published a statement in response to the media investigation on Wednesday. The company said that according to the latest international schemes reports, “Worldline’s fraud ratio is below the industry average.”
Worldline added that its executive management and board of directors are “fully committed to strict compliance with regulation and risk prevention standards and to strictly enforce related rules and procedures with zero-tolerance.”
The sources: Worldline Statement, De Standaard, Le Soir, NRC, Dagens Nyheter, Bloomberg, Reuters
