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Global Payments: Embracing Fintech With Partnerships And Mergers

Apr. 01, 2021 6:53 AM ETGlobal Payments Inc. (GPN) Stock10 Comments
Khaveen Investments profile picture
Khaveen Investments


  • Global Payments is one of the top three third-party merchant acquirers globally processing over 16 bln transactions and maintains a solid market position with the TSYS merger.
  • It has a partnership with Google to provide acquiring services for its 3 bln annual transactions and will migrate its platform to Google Cloud.
  • The partnership also allows the company to integrate value-added services featuring Google’s suite of software to enable merchants to manage and grow their business.
  • It is also a partner of Citi, one of the largest global banks, to provide payment processing services for its latest digital payments offering as it expands globally.

global payments logo

Source: Global Payments

Headquartered in Georgia, USA, Global Payments (NYSE:GPN) is a leading merchant acquirer. Collectively, the company, Fiserv via First Data (FISV) and FIS via Worldpay (FIS) form the three largest third-party acquirers globally. Competition is fierce and consolidation is rampant with major M&A deals. Yet, Global Payments remains as a solid acquirer with a growing market share.

One of the major drivers of the company is the merger with TSYS which creates a pure-play payments powerhouse with a larger scale. Combined, both companies provide solutions to 3.5 mln merchants and over 1,300 financial institutions across 100 countries. Besides that, the company also expands its presence along the payments value chain as shown below through TSYS’s processing services for issuing banks and consumer solutions businesses with prepaid cards. This provides significant cross-selling opportunities to financial institutions through integrative services.

Source: Arstechnica

The company’s strategy is software-driven focus, omnichannel expansion and exposure to faster growth markets. To drive growth, the company has secured partnerships with big tech and various financial institutions to enhance its core processing capabilities and enhance its distribution channels. Its major partnership is with Google (GOOG) (GOOGL), where the company will provide merchant acquiring solutions to Google and will provide complementary and value-added software solutions and tools from Google to its merchant base. Moreover, the company will migrate its merchant acquiring systems to Google Cloud to enhance performance and drive significant cost efficiencies.

Additionally, it has a partnership with Citi (C), one of the largest global banks, to provide processing services for its latest online and omnichannel payment offering. This will allow the company to expand its international operations by leveraging Citi’s wide global network across 96 countries.

In terms of its revenue breakdown, the company derives revenues from three major segments represented in the chart below.

This article was written by

Khaveen Investments profile picture
Khaveen Investments is a Global Macro Quantamental Hedge Fund managing a portfolio of globally diversified investments. With a vested interest in hundreds of investments spanning diverse asset classes, countries, sectors, and industries, we wield a multifaceted investment approach that combines top-down and bottom-up methodologies, integrating global macro, fundamental, and quantitative investment strategies. We serve accredited investors throughout the globe, which include HNW Individuals, Corporates, Associations, and Institutions. At the heart of our investment prowess lies specialized expertise in cutting-edge technologies that are reshaping the fabric of numerous industries. Our strategic orientation centers around a spectrum of booming domains, encompassing the transformative realms of Artificial Intelligence, Cloud Computing, 5G, Autonomous & Electric Vehicles, FinTech, Augmented & Virtual Reality, and the Internet of Things.www.khaveen.com

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Comments (10)

Pillpoppinpuppy profile picture
GPN is the simply the best company in the industry, generates more FCF than SQ or PSFE can dream of, and I think the author's valuation of the company is quite conservative. GPN is trading at 15.5X year+2 EBITDA, offering 64% upside to its 3-year average EBITDA multiple of 24.2X. SQ, BTW, is at 91X year+2 EBITDA, which of course is silly. While I'm no authority on PSFE, I think that SPACs generally are uninvestable, because they are really set up to get people to buy into them based on some story, and then they later file to issue 10s of millions (or 100s of millions in the case of PAYA) so that insiders can cash out. GPN is the way to go. Good report.

One thing I am curious about regarding the report is why the author didn't mention GPN's deal with AWS.

I am also curious why the author, who works at a hedge fund, would spend all this time researching GPN and not own any shares. Doesn't make sense to me.
Gary J is Rich on AMZN profile picture

Wow somebody needs some SPAC 101. Learn about major success DraftKings, for example, through association with Paysafe.

And maybe the author owns no shares because he spent "all this time researching GPN".
Pillpoppinpuppy profile picture
@Gary J is Rich on AMZN Every once in a while I run into a genius like you on SA, but you are committing the fallacy of composition. Check your Copi (that is an informal logic text if you didn't go to college).
Gary J is Rich on AMZN profile picture

Best you've got. I understand.
SQ has consistently outperformed GPN.
Gary J is Rich on AMZN profile picture
Let them all scramble for share, I'll take Paysafe (PSFE). The biggest thing in payments now is Digital Wallets and Paysafe owns the space. Just taken public by Bill Foley.
@Gary J is Rich on AMZN Have you read their 10K?
seekingalpha.com/... Huge risks.
Gary J is Rich on AMZN profile picture
@Kulak be specific
which one do you like best as a long term investment among these: GPN, FIS, FISV and ADYEY? Thanks
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