211 / 354
20
Financial Information concerning the Group’s Assets and Liabilities, Financial Condition andResults
Group Consolidated Financial Statements
211
Worldline
2016 Registration Document
Credit and/or CounterpartyRisk
counterparty will default on its contractual obligations resulting
in financial loss to the Group. The Group believes that it has
limited exposure to concentrations of credit risk due to its large
and diverse customer base. The Group’s greatest credit risk
Credit and/or counterparty risk refers to the risk that
position is borne with respect to its financial institution
customers.
The Group manages this credit risk by consistently selecting
leading financial institutions as clients and by using several
banking partners.
The Group is also exposed to some credit risk in connection
with its commercial acquiring and checks services businesses:
cardholder. Additionally, the Group offers a guarantee of
“service rendered” to the cardholder. Accordingly, in the
event a merchant goes bankrupt (or ceases to operate)
before delivering the product or rendering the service
exposed to a credit risk in the event of non-payment by the
time that they are actually rendered (e.g., ticket purchases
purchased by a cardholder, the cardholder can require the
Group to reimburse it for the amount of the transaction. This
credit risk exposure is especially significant where services
are purchased through e-Commerce well in advance of the
(collateral build up, delegation of insurance, etc.) and
checking daily transaction flows to avoid excessive
exposure to these risks;
through travel agencies). The Group monitors these risks by
selecting financially sound clients, requesting guarantees
provides a performance guarantee to the merchant in
respect the cardholder’s payment. Therefore, the Group is
Commercial acquiring. For each transaction, the Group
●
merchants accordingly.
bad Cheques, the activity can become loss-making. The
Group manages this risk by analysing bad debt levels for
each type of merchant business and adjusts fees charged to
Cheque services. Under its Cheque Service business, the
●
Group pays its merchant clients indemnities for unpaid
Cheques that have been approved by the Group based on a
credit scoring system. To the extent that fees received from
merchants for this service are less than the average levels of