Worldline Under Fire: Credit Agricole Staff Demand Answers on Risky Payments Partnership

The air at Credit Agricole SA is thick with questions as employees challenge the bank's decision to deepen ties with French payments giant Worldline SA. Recent fraud allegations swirling around Worldline have ignited concerns among staff, who are now demanding an explanation for the 2024 stake acquisition.

Employee representatives have reportedly sent an email to Credit Agricole's management, seeking clarification on why the bank took a 7% stake in Worldline early last year. The core of their inquiry: did the bank conduct appropriate due diligence at the time? Credit Agricole has so far remained silent on the matter.

This isn't Credit Agricole's first foray into a troubled payments partnership. The current joint venture with Worldline, established in 2023, was intended to replace a previous collaboration with Wirecard AG. That partnership famously collapsed in 2020, becoming Germany's largest-ever accounting scandal.

The latest storm around Worldline erupted after media reports, spearheaded by the European journalism network EIC, alleged that the company had covered up customer fraud. These reports claim Worldline ignored earlier warnings and continued to do business with high-risk and prohibited clients, effectively facilitating fraudulent transactions. In response, Worldline's shares plummeted by 38% on Wednesday.

Interestingly, Credit Agricole's stake in Worldline, acquired in early 2024, was partly aimed at stabilizing the payments firm. This move came after Worldline announced in October 2023 its decision to sever ties with some German clients. This followed German financial watchdog Bafin's imposition of severe restrictions on Worldline's local subsidiary, Payone, for failing to prevent credit card fraud by third parties.

During a conference call with analysts on Wednesday, Worldline CEO Pierre-Antoine Vacheron dismissed the media reports as an "attack" and stated there was "nothing new" in the allegations. However, analysts at Jefferies note that these developments raise the risk of Worldline's joint venture partners "re-evaluating their partnerships."

While Credit Agricole initially signed a deal with Wirecard in 2018, it put a halt to joint projects the following year due to mounting concerns about the firm.

Worldline's annual report, released earlier this year, indicated that the partnership with Credit Agricole, dubbed CAWL, was expected to be "fully operational during the first half 2025." Worldline holds a controlling stake in the joint venture, owning 50% plus one share.