Payment Methods

Earnings Giveth and Taketh Away for Payments Stocks

Wall Street

In the week that just ended, with a bang and not a whimper on strong jobs numbers, the Payments Stock Index gave a decidedly mixed performance. The earnings numbers continue to dominate headlines and also the stock swings that were in evidence over the past several days.

On the positive side of performance, the payments processing marquee name Square had dominated the earnings headlines, with a double-digit percentage gain that helped push the stock up a net 7 percent to end the week. Investors were heartened by a better than expected loss on the bottom line, with selling volumes on the rise and better traction at the larger sellers signing on to use the platform. The Street had expected a loss of 20 cents a share, while the actual number was 11 cents. The revenues of more than $400 million topped the Street nicely, which had been at $390 million. The key metric of course was transaction volume, which gained 42 percent year over year to $12.5 billion. The largest sellers, with transaction volume north of $125,000 annually, saw activity spike 62 percent year over year.

FleetCor jumped a bit on the news that the fuel card provider had acquired Travelcard Nederland, expanding its reach into Europe. No financial terms were disclosed.

On the negative side of the performance ledger, Planet Payment lost a staggering 20 percent on the week in the wake of results that missed the Street by a penny, with net income of 2 cents per share versus the Street at 3 cents per share. Though the company guidance was roughly in line with expectations, investors were clearly not impressed.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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