Report: Macroeconomic Slowdown Expected to Reduce Payments Growth

Macroeconomic headwinds reportedly may begin weighing on the B2B payments sector.

For example, B2B payments technology and services provider Fleetcor Technologies faces the primary challenge of a macroeconomic slowdown that will reduce payments growth, Seeking Alpha reported Wednesday (Oct. 26).

The company has also been coping with rising interest rates affecting its debt load and cost of capital, according to the report.

“While FLT is investing in growing its [electric vehicle (EV)] charging and related payments capabilities in Europe, its earnings results may be reaching a near-term peak as its debt service costs grow markedly throughout 2023,” Donovan Jones, financial analyst of IPO Edge at Seeking Alpha, wrote in the report.

“As economies slow, the firm will see an increase in bad debts and fraudulent usage activity, also adding to expenses,” Jones wrote.

PYMNTS has reached out to Fleetcor for comment.

In Fleetcor’s most recent earnings release, the company reported that its second-quarter results for both revenue and adjusted net income per share came in ahead of expectations it had provided in May.

“Our businesses continued the positive momentum from the first quarter, with the majority of the second quarter outperformance coming from organic growth,” Charles Freund, who was at the time chief financial officer (CFO) of Fleetcor Technologies, said in the Aug. 3 press release.

Looking ahead, Freund said in the release: “The outlook for the second half of the year remains positive, as we expect the fundamental trends from the first half of the year to continue. We expect the net benefits from higher fuel prices, higher fuel spreads and lower share count to effectively offset headwinds from foreign exchange rates and higher interest rates.”

Fleetcor is to announce its third-quarter results Nov. 2, the company said Monday (Oct. 24) in a press release.

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