Global Payments Expanding International Partnerships

Payment solutions provider Global Payments Inc. reported another strong quarter as it works to expand its worldwide presence through new international ventures — including additional e-commerce and omnichannel offerings.

Global Payments currently has major presences across the Asia-Pacific region, Brazil, Canada, Central and Eastern Europe, Russia, Spain, the U.K. and the U.S.  The second-quarter earnings report released Thursday (Jan. 8) showed revenue for the quarter at $697.3 million, up 10 percent, year over year. Global Payments reported a profit of $74.8 million, and earnings per share grew 19 percent when comparing the same time period.

"We are very pleased to deliver another quarter of solid performance across our direct businesses," CEO Jeff Sloan said in a company news release. "We also continue to successfully expand our worldwide footprint, one of our key strategies to accelerate growth. During the quarter, we completed the acquisition of Ezidebit, a technology company with direct distribution in Australia and New Zealand and an expanding presence throughout Asia. We also announced an agreement to establish a new joint venture with Bank of the Philippine Islands. This partnership will increase our existing distribution in the highly attractive Philippines market. These transactions help fulfill the vision we set forth in 2012 with the purchase of the minority interest in our then joint venture in Asia."

The company reported that Q2 results were the "largest core operating margin expansion" of any quarter in several years. Sloan gave insight about how the company is doing across all of its markets, citing that the company had strong growth across both its U.S. and international markets, including its e-commerce efforts.

"Consistent with recent trends, our U.S. business delivered impressive results led by our direct channels, which generated double-digit organic revenue growth for the second consecutive quarter. Canada also maintained stable performance in local currency with consistent business fundamentals," he said during the company's earnings call. "Our international results reflect solid business performance across most of our markets, with particularly strong revenue growth in Asia, Spain, and our e-commerce channel. Additionally, we experienced markedly better than expected margins in our international business, largely from outstanding execution, augmented by market based pricing changes in Spain.

New markets the company entered in Q2 included Australia and New Zealand with the company's acquisition of Ezidebit — the cloud payments software. Agreements were also made to establish a merchant joint venture with the Bank of the Philippine Islands, which Sloan said will help the company increase distribution of its payment services across the "highly attractive Philippines market."

"These transactions will enhance our position in some of the fastest growing payments' markets in Asia Pacific and demonstrate that we are making significant progress on our strategy in that region, executing on our vision that we set forth in 2012 with the purchase of HSBC's remaining interest in our then Asia Pacific joint venture," he said.

During the Q2 earnings call with investors, Global Payments executives were asked questions about the competitive nature across each region and industry discussions about the amount of companies being funded in the e-commerce space, particularly in Europe. When asked about the North American OpenEdge competitive environment, Sloan discussed the omnichannel offerings and how Global Payments is navigating that space.

"We tend to think about it, especially in Europe, as really an omnichannel offering. So, we tend to think going forward it's going to be less about how the transaction really came into the merchant, and more about our ability to service people on both a card not present environment, as well as a card present environment," he said. "So, we're actively positioning our business, and repositioning our business in the case of Global Solutions, to really deal with omnichannel customers, to provide better value-added analytics and services in an environment where we think merchants will be more inclined to accept a transaction however it comes in, as rates are reduced. So, I think we think a little bit less along the lines of e-commerce, and more along the lines of can we capture share by offering value-added solutions that are almost channel-agnostic."



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