Why the EML Payments (ASX:EML) share price is crashing 52% lower

The EML Payments Ltd (ASX:EML) share price has lost over half of its value on Wednesday morning. Here's why its shares are crashing…

| More on:
Red wall with large white exclamation mark leaning against it

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The EML Payments Ltd (ASX: EML) share price has returned from its trading halt and is crashing lower.

In morning trade, the payments company's shares are down a massive 52% to a 52-week low of $2.47.

Why is the EML Payments share price crashing lower?

Investors have been selling the company's shares this morning after it revealed that its Irish regulated subsidiary, PFS Card Services Ireland Limited (PCSIL), has received correspondence from the Central Bank of Ireland raising significant regulatory concerns.

According to the release, the central bank's concerns relate to PCSIL's Anti-Money Laundering / Counter Terrorism Financing (AML/CTF), risk and control frameworks, and governance.

The correspondence states that the central bank is inclined to issue directions to PCSIL pursuant to section 45 of the Central Bank (Supervision and Enforcement) Act 2013.

There are a number of possibilities in this section, one of which is the revoking of its financial service provider authorisation.

Is this a big deal?

As you might have guessed from the EML Payments share price reaction today, this could potentially be a very big deal.

Following Brexit, EML Payments moved the European operations of its Prepaid Financial Services to Ireland. As a result, during the third quarter of FY 2021, the company estimates that approximately 27% of its global consolidated revenue derived from programs operating under PCSIL's Irish authorisation.

The central bank has invited PCSIL to provide it with submissions in relation to the concerns. The company advised that it intends to do so by 27 May 2021.

In the meantime, the central bank and PCSIL are in close dialogue regarding the concerns raised. Furthermore, PCSIL is working with the bank to assist it with receiving information and documentation relevant to its concerns.

EML concluded: "EML welcomes the opportunity to engage more closely with the CBI in relation to the matters raised and PCSIL's business model more generally. EML is committed to cooperating with the CBI and is taking steps to address concerns raised."

FY 2021 guidance

Failing to give the EML Payments share price a lift today an update on its guidance. 

The release explains that, excluding any potential costs relating to the above, EML Payments is on course to achieve its guidance in FY 2021.

This will mean underlying revenue in the range of $180 million to $190 million and underlying net profit of $30 million to $33.5 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

Bored man sitting at his desk with his laptop.
Share Fallers

Why Catalyst Metals, Duratec, Nufarm, and Rio Tinto shares are dropping today

These shares are ending the week in the red. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Dexus, Mayne Pharma, Nufarm, and Treasury Wine shares are falling today

These shares are having a tough session on Thursday. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why James Hardie, Mayne Pharma, Nufarm, and Resimac shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Kogan, Monash IVF, OFX, and ResMed shares are falling today

Why are these shares taking a tumble today? Let's find out.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Share Fallers

Why Appen, DroneShield, Gentrack, and New Hope shares are dropping today

These shares are starting the week in the red. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Dexus, Dusk, Fletcher Building, and Paladin Energy shares are falling today

These shares are ending the week in the red. But why?

Read more »

Couple look at a bottle of wine while trying to decide what to buy.
Consumer Staples & Discretionary Shares

Treasury Wine shares: Buy, hold, or sell? Here's Macquarie's take

What is Macquarie forecasting for Treasury Wine shares amid the CEO’s unexpected exit?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Newmont, NRW, Peet, and Treasury Wine shares are dropping today

Let's find out why investors are selling down these shares on Thursday.

Read more »