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Investing.com -- Shares of Edenred (EPA:EDEN) jumped over 6% on Thursday after France unveiled updates to its meal voucher reform, offering relief to concerns about potential regulatory headwinds.
The government ruled out imposing merchant fee caps, for now, while signaling a shift toward digitalization and greater market competition.
French Minister Delegate Véronique Louwagie presented the new policy direction on June 25, confirming that instead of capping fees, authorities will introduce a transparency charter to guide relationships between voucher issuers and merchants.
This development alleviates a key concern for Edenred, which commands about 40% of France’s meal voucher market and generates roughly €185 million in annual revenue from the country, about 7% of its global operating revenue in the Meal & Food segment.
France’s system, as outlined by Jefferies, serves 5.4 million employees and involves more than 235,000 partner merchants.
Supermarkets account for 31% of voucher spending, while restaurants take 40%.
The market is dominated by four main issuers, with Edenred as the clear leader, followed by Pluxee at 14% market share.
Key changes include the full transition to digital vouchers by February 28, 2027, a move Edenred is well-equipped to handle given its digital-first strategy.
The government will also dissolve the National Commission for Meal Vouchers, transferring issuer oversight to the Banque de France, a change expected to streamline authorization processes.
Further reforms will expand voucher usability, allowing permanent supermarket purchases and Sunday usage, which may boost overall redemption.
However, unused voucher balances will no longer be carried over, a shift designed to stimulate timely consumption.
The €25 daily cap will be retained, and a proposed lower cap for supermarkets was ultimately rejected due to complexity, according to UBS analysts.
While France’s regulatory trajectory appears manageable for Edenred, its position in Brazil faces greater uncertainty.
As reported by Brazilian media and cited by Jefferies, the government is considering a 3.5% cap on the merchant discount rate (MDR) for meal vouchers.
This would be significantly below current fee levels in the voucher industry, though still above 2024 MDRs for credit and debit cards.
Additionally, Brazil may shorten the 30-day payment cycle to merchants, a move that could strain cash flows for issuers and particularly affect new entrants.
Public contracts account for about half of Brazil’s meal voucher volume, and such a change could pose broader fiscal and operational challenges.