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Risk Factors
Risks related to the Group’s business and industry
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Worldline
2016 Registration Document
negatively impact the Group’s business, financial condition
and is dependent on the success of its clients, which could
decline of consumer, business and government spending
cycles and credit risk of its clients and the risk of an overall
The Group is subject to economic and political risk, business
and results of operations.
customers, the success of which the Group cannot control.
its clients to effectively market and sell these products to their
its clients to consumers, the Group is dependent on the ability of
manufacturers, services and platforms that are then on-sold by
provides, and/or develops jointly with, its clients, such as car
product and services upgrades. Furthermore, where the Group
software, which may adversely impact sales of the Group’s
clients may be more reluctant to renew their IT hardware and
consumer purchasing habits. A renewed deterioration in
spending, consumer discretionary income or changes in
that affect consumer confidence, consumer and government
factors. The Group is exposed to general economic conditions
base, the Group’s business is particularly dependent on these
spending, and, with a significant retail and government client
overall level of individual consumer, business, and government
processing, and digital services industries are influenced by the
The merchant services, electronic payments, payment
payments, consumers using Online Banking e-Payment (OBeP)
fewer sales of their products and services using electronic
fewer transactions with their cards, the Group’s merchants make
cardholders of the Group’s financial institution clients make
could result in a decrease in the Group’s revenue and profits. If
payments. A reduction in the amount of consumer spending
average size of transactions made using card and electronic
Group’s financial performance by reducing the number or
operates, particularly in Europe, may adversely affect the
macro-economic conditions in key countries where the Group
during economic downturns, our existing and prospective
offerings and component of its growth strategy. Moreover,
comprise an increasingly significant portion the Group’s services
digital services offerings and other value-added solutions, which
disposable income, might be less likely to opt for the Group’s
Additionally, the Group’s clients and their customers, with less
sizes, resulting in a potentially significant decrease in revenue.
fewer transactions to process and smaller average payment
people spend less money per transaction, the Group will have
and other non-card payment methods make fewer payments or
imposition of governmental austerity measures or changes in
Furthermore, a renewed economic downturn and the possible
26%) of the Group’s revenue generated in France was
entities. In particular, in 2016, a significant portion (approximately
e-Transactional Services’ total revenue from government
of its total revenue and approximately 39% of Mobility &
financial condition. In 2016, the Group derived approximately 11%
effect on the Group’s business, results of operations and
United Kingdom, in particular), could have a material adverse
revenue is derived from government clients (in France and the
spending, which, given that a significant portion of the Group’s
government policies could prompt decreases in government
attributable to contracts with government entities.
consumers for services and products purchased but not
network standards could require the Group to compensate
assessed by the card payment networks. Card payment
providers, are liable for any fines or penalties that may be
electronic payment system, including payment service
Group’s merchant clients and the other participants in the
business, financial condition and results of operations. The
of operation, which would negatively impact the Group’s
any transactions processed by that merchant in its final months
economic conditions, the Group is unlikely to receive its fees for
may find itself liable for any such charges.
contract, insolvency, bankruptcy or any other reason, the Group
service providers and other agents, due to fraud, breach of
the Group is not able to collect such amounts from payment
provided following a merchant’s bankruptcy. In the event that
Group. In the event of a closure of a merchant due to adverse
transactions and therefore lower revenue and earnings for the
they issue credit cards to, resulting in fewer and smaller
reduce credit limits and be more selective with regard to whom
major financial institutions. Additionally, credit card issuers might
and to potential credit losses, including as a result of default of
the Group’s sensitivity to price pressure vis-à-vis its competitors
geographic areas in which the Group operates could increase
More generally, a weakening of the economies in the
solutions.
Risks related to the management of projects to develop new
development costs and expenses may prove to be much higher
development of new systems. This business entails the risk that
The Group enters into fixed-fee contracts in relation to the
results of operation.
material adverse effect on its business, financial condition and
the Group would record a provision, which could have a
or sufficient to compensate for the increased cost. In such cases,
be able to secure an upward revision to the fixed fee, either at all
management of the project. In such cases, the Group may not
during the course of the project, or errors in the operational
estimates, the emergence of new and unexpected challenges
than initially anticipated, whether as a result of incorrect initial
If the Group is unable to effectively respond to competition,
decrease significantly.
demand for its services may be adversely affected and
Verifone’s acquisition, in 2011, of Point, a distributor of the
a dominant position within the merchant terminals market.
business from Ingenico and Verifone, in particular, who maintain
particularly intense competition in its Merchant Terminals
players and innovative startups. The Group also faces
traditional information technology companies to specialist
beyond its typical payment industry competitors, ranging from
broad spectrum of strong market participants that extends
global business line, the Group competes with a particularly
services offered through its Mobility & e-Transactional Services
banks and telecommunication companies, co-exist in the
platforms offered by an increasing range of players, including
mobile payments businesses, as a wide range of payment
Group also faces heightened competition in its online and
retain or enhance its current position within this market. The
Group’s merchant terminals, could affect the Group’s ability to
companies and start-ups. Some of the Group’s competitors may
suppliers, telecommunications and information technology
banks, to e-Commerce software providers, payment terminal
and range from payment processing providers and acquiring
vary depending on business line and product or service type,
product and services portfolio, the Group’s primary competitors
markets in which it operates. Given the diversity of the Group’s
The Group is exposed to significant competition in the various
respect to its innovative digital and e-Consumer & Mobility
innovative programs and services than the Group’s. With
arrangements. Moreover, competitors may also introduce more
develop better security solutions or more competitive pricing
recognition or merchant acceptance than the Group has or may
advertising and marketing strategies to achieve broader brand
services than the Group offers, may use more effective
new technologies and services, may offer a wider range of
operational resources to the development and marketing of
have greater ability than the Group does to devote financial and