Global Payments (ticker: GPN) which processes electronic transactions for merchants, multinational corporations, financial institutions, consumers, government agencies, and other profit and nonprofit business enterprises reached agreement with HSBC (ticker: HBC) that will give them access to the debit and credit card markets of Mainland China and India. Chairman, President and CEO Paul Garcia discussed the agreement during management's Q1 2006 earnings results conference call:
On the HSBC Agreement
....we have agreed to form a payment processing joint venture with…..HSBC, in the Asia-Pacific region.
....HSBC's merchant acquiring channel….provides credit and debit card payment processing services to more than 40,000 merchant locations.
....the 10 countries and territories expected to be included in the joint venture….comprise almost 40% of the world's population for which Global previously had no direct access.
....the vast majority of this 2.5 billion people are living in Mainland China and India, which are the two markets with the highest likelihood for future payment processing growth.
....HSBC's existing presence will provide us with a strong share of the high growth Asia-Pacific payments market in addition to immediate access to Mainland China and India.
On the Opportunity for Credit Cards and Payment Processing
....the Chinese consumer -- by the way they're probably approaching 1 billion bank accounts in China with very, very few credit cards. So the upside in India obviously, the same story -- the upside is enormous.
On the Timing of Payment Adoption
....I think it would be unrealistic for us to expect that China and India are going to adopt payments the way we did in this country. I think even a much slower adoption rate….so even a much lower adoption rate still produces significant opportunity.
(Quotes are from the CCBN StreetEvents transcript.)