The Zip Co Ltd (ASX: ZIP) share price is in retreat today.
Shares in the All Ordinaries Index (ASX: XAO) buy now, pay later (BNPL) stock closed yesterday trading for 30 cents. During the Thursday lunch hour, shares are swapping hands for 28.5 cents apiece, down 3.3%.
For some context, the All Ordinaries is down 1.0% at this same time.
Here's what's got investors jittery.
What's pressuring the Zip share price on Thursday?
With today's losses factored in, the Zip share price is down a painful 53% over 12 months.
Zip isn't the only stock in the red today, though, with the broader BNPL sector coming under selling pressure across the globe.
Here in Australia, the Block Inc (ASX: SQ2) share price, for example, is down a steep 7.9%.
The turmoil across the pay by instalments companies looks to have been spurred by France-based payments company, Worldline SA (EPA: WLN).
The Worldline share price closed down 59% on the French market overnight after the company cut its full year guidance. With recession concerns mounting in the EU, Worldline cited a slowdown in sales, particularly in its core market Germany, for its reduced full-year forecasts.
The sell-off spread to other European listed payments companies and also impacted US listed BNPL stocks.
In fact, the Zip share price is faring better than most, with Affirm Holdings Inc (NASDAQ: AFRM) shares falling 15% and PayPal Holdings Inc (NASDAQ: PYPL) shares closing down 5% in US markets overnight.
Atop recession fears, BNPL investors are awakening to the fact that global interest rates may remain higher for longer than previously priced in.
Here in Australia, the odds of another rate hike from the RBA increased yesterday after the ABS reported that annual inflation of 5.4% was still running well above the central bank's target range of 2% to 3%.
Earlier this month, newly appointed RBA chair Michele Bullock reiterated that the bank "remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome".
The series of rate increases ushered in over the past year and a half have already thrown up significant headwinds for the Zip share price. Shareholders will be hoping the RBA takes a dovish turn.
