About Global Payments Inc

Global Payments Inc. and its consolidated subsidiaries (Global Payments) operate as a payments technology company. The company is delivering software and services to its customers globally, with worldwide reach spanning North America, Europe, the Asia-Pacific, and Latin America. The company’s technologies, services and team member expertise allow the company to provide a broad range of solutions that enable its customers to operate their businesses more efficiently across a variety of channels around the world. Business Segments The company operates in two reportable segments: Merchant Solutions and Issuer Solutions. During the second quarter of 2023, the company completed the sale of the consumer portion of the company’s Netspend business, which comprised the company’s former Consumer Solutions segment. Merchant Solutions segment Through the company’s Merchant Solutions segment, the company provides payments technology and software solutions to customers globally. The company’s payment technology solutions are similar around the world in that the company enables its customers to accept card, check and digital-based payments. The company’s comprehensive offerings include, but are not limited to, authorization, settlement and funding services, customer support, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and reporting. In addition, the company offers a wide array of enterprise software solutions that streamline business operations to customers in numerous vertical markets. The company also provides a variety of value-added solutions and services, including specialty point-of-sale software, analytics and customer engagement, human capital management and payroll and reporting that assist its customers with driving demand and operating their businesses more efficiently. The company’s value proposition is to provide distinctive high-quality, responsive and secure services to all of its customers. The company distributes its Merchant Solutions services globally through multiple technology-enabled and relationship-led distribution channels and targets customers in many vertical markets located throughout North America, Europe, the Asia-Pacific, and Latin America. The company also earns software subscription and licensing fees, as well as other fees for specific value-added services, which may be unrelated to the number or value of transactions. Distribution Channels In the Merchant Solutions segment, the company actively markets and provides its payment services, enterprise software solutions and other value-added services directly to the company’s customers through a variety of technology-enabled and relationship-led distribution channels. Technology-Enabled. The company’s technology-enabled distribution channel includes integrated and vertical market software solutions and ecommerce and omnichannel solutions, each as described below. Many of the company’s payment solutions are technology-enabled in that they incorporate or are incorporated into innovative, technology-driven solutions, including enterprise software solutions, designed to enable merchants to better manage their businesses. The company’s technology-enabled solutions represent a substantial component of the company’s revenues. Integrated Solutions. The company’s integrated solutions provide advanced payments technology that is embedded into business management software solutions owned by the company’s technology partners who operate in numerous vertical markets, primarily in North America. The company grows its integrated solutions business when new or existing merchants enable payments services through enterprise software solutions sold by the company’s partners, both new and existing. Vertical Markets Software Solutions. The company’s vertical markets software solutions provide advanced payments technology that is integrated into business enterprise software solutions that the company owns. The company distributes its vertical markets software solutions primarily through the following businesses: ACTIVE Network. Through ACTIVE Network, the company delivers cloud-based enterprise software, including payment technology solutions, to event organizers in the communities, government services and health and fitness markets. AdvancedMD. Through AdvancedMD, the company provides cloud-based enterprise solutions to small-to-medium sized ambulatory care physician practices in the United States. Education Solutions. The company offers integrated payment solutions specifically designed for all levels of educational institutions. For colleges and universities, the company offers integrated commerce software and payment solutions, as well as a variety of additional value added services. For institutions serving kindergarten through 12th grade levels, the company provides ecommerce and in-person payments and cafeteria POS and back-office management solutions. Xenial. Through Xenial, the company offers cloud-based enterprise software and hardware solutions that integrate with the company’s payment services and other business applications to the restaurant and hospitality and stadium and event venue vertical markets. Zego. Through Zego, the company offers a comprehensive resident experience management software and digital commerce solutions to property managers, primarily in the United States. Ecommerce and Omnichannel. The company offers ecommerce and omnichannel solutions that seamlessly blend payment gateway services, retail payment acceptance infrastructure and payment technology service capabilities through a unified commerce platform to allow merchants and partners to accept various payment methods through any channel. The company sells ecommerce and omnichannel solutions to customers of all sizes, from small businesses accepting payments in a single country to payment facilitators, enterprise and multinational partners and merchants that have complex payment needs and operate retail and online businesses in multiple countries. Relationship-Led. Through the company’s relationship-led direct sales forces worldwide, as well as financial institution and other referral partnerships, the company offers its payments technology services, software and other value-added solutions directly to customers across numerous verticals in the markets the company serves. Although the company’s primary focus is on building high-quality, direct relationships with merchants, the company also provides its services to merchants through independent sales organizations (‘ISOs’) and financial institutions. Credit and Debit Card Transaction Processing Credit and debit card transaction processing includes processing the world's major international card brands, including among others, American Express, Discover Card (‘Discover’), JCB, Mastercard, UnionPay International and Visa, as well as certain domestic debit networks, such as Interac in Canada. Credit and debit networks establish uniform regulations that govern much of the payment card industry. During a typical payment transaction, the merchant and the card issuer do not interface directly with each other, but instead rely on payments technology companies, such as Global Payments, to facilitate transaction processing services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back-office support services, such as chargeback resolution. The company processes funds settlement under two models: a sponsorship model and a direct membership model. Under the sponsorship model, member clearing financial institutions (‘Members’) sponsor the company and require its adherence to the standards of the networks. In these markets, the company has sponsorship or depository and clearing agreements with financial institution sponsors. These agreements allow the company to route transactions under the Members' control and identification numbers to clear card transactions through Mastercard and Visa. In this model, the standards of the card networks restrict the company from performing funds settlement or accessing merchant settlement funds, and instead, require that these funds be in the possession of the Member until the merchant has been funded. Under the direct membership model, the company is direct members in various payment networks, allowing the company to process and fund transactions without third-party sponsorship. Under this model, the company routes and clears transactions directly through the card brand’s network and is not restricted from performing funds settlement. Otherwise, the company processes these transactions similarly to how the company processes transactions in the sponsorship model. The company is required to adhere to the standards of the various networks in which the company is direct members. The company maintains relationships with financial institutions, which may also serve as the company’s Member sponsors for other card brands or in other markets, to assist with funds settlement. How a Card Transaction Works A typical payment transaction begins when a cardholder presents a card for payment to a merchant at which time card and transaction information, such as the card identification number, transaction date and transaction amount, is captured and transmitted to the company’s network. The information is captured by a point-of-sale (‘POS’) terminal card reader or mobile device card reader, which may be sold or leased to the merchant and serviced by the company, or through a POS device or ecommerce portal by one of a number of services that the company offers directly or through a value-added reseller. After the card and transaction information is captured, the POS device or ecommerce portal automatically connects to the company’s network through the internet or other communication channel in order to receive authorization of the transaction. For a credit card transaction, authorization services generally refer to the process in which the card issuer indicates whether a particular credit card is authentic and whether the impending transaction amount will cause the cardholder to exceed defined credit limits. In a debit card transaction, the company obtains authorization for the transaction from the card issuer through the payment network verifying that the cardholder has access to sufficient funds for the transaction amount. Issuer Solutions segment Through the company’s Issuer Solutions segment, the company provides solutions that enable financial institutions and other financial service providers to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform. In addition, the company provides flexible commercial payments, accounts payable and electronic payment alternatives solutions that support B2B payment processes for businesses and governments. The company also offers complementary services, including account management and servicing, fraud solution services, analytics and business intelligence, cards, statements and correspondence, customer contact solutions and risk management solutions. Additionally, the company’s Issuer Solutions segment provides B2B payment services and other financial service solutions marketed to businesses, including software-as-a-service (‘SaaS’) offerings that automate key procurement processes, provide invoice capture, coding and approval, and enable virtual cards and integrated payments options across a variety of key vertical markets. Issuer Solutions segment revenues are primarily derived from long-term processing contracts with financial institutions and other financial services providers. Payment processing services revenues are generated primarily from charges based on the number of accounts on file, transactions and authorizations processed, statements generated and/or mailed, managed services, cards embossed and mailed, and other processing services for cardholder accounts on file. Most of these customer contracts have prescribed annual minimums, penalties for early termination, and service level agreements that may affect contractual fees if specified service levels are not achieved. Issuer Solutions segment revenues also include software subscription, licensing fees, loyalty redemption services and professional services. Strategy The company’s intellectual property is an important part of its strategy to be a leading provider of payment technology and software solutions. The company continues to operate its business in accordance with the following strategic framework: leading with technology and innovation to deepen the company’s competitive advantages; further scaling the four pillars of the company’s strategy: software-driven focus, ecommerce and omnichannel solutions, exposure to faster growth markets and B2B payments; delivering commerce enablement solutions globally to broaden the company’s leading position as a sales-driven, product-led company; providing frictionless, best-in-class customer experiences, creating longer-term relationships; nurturing its culture, values and diversity, equity and inclusion initiatives; and supporting its communities as a socially responsible company with purpose and understanding. Acquisitions On March 24, 2023, the company completed the acquisition of EVO Payments, Inc. (‘EVO’). EVO is a payment technology and services provider, offering payment solutions to merchants ranging from small and middle market enterprises to multinational companies and organizations across the Americas and Europe. The acquisition aligns with the company’s technology-enabled payments strategy, expands the company’s geographic presence in attractive markets and augments the company’s business-to-business (‘B2B’) software and payment solutions business. Dispositions On April 26, 2023, the company completed the sale of the consumer portion of its Netspend business. The disposition further aligns the company’s businesses with its strategy to focus on its core corporate customers, including merchants, financial institutions, software partners and technology leaders. On April 1, 2023, the company completed the sale of its gaming business. The disposition further aligns the company’s businesses with its strategy to focus on its core corporate customers. Government Regulation The company is subject to rules promulgated by the various payment networks, including Nacha, American Express, Discover, Interac, Mastercard and Visa. The Dodd-Frank Act also created the Consumer Financial Protection Bureau (‘CFPB’), which has responsibility for enforcing federal consumer protection laws, and the Financial Stability Oversight Council, which has the authority to determine whether any nonbank financial company, such as the company, should be supervised by the Board of Governors of the Federal Reserve System (the ‘Federal Reserve’) on the ground that it is ‘systemically important’ to the U.S. financial system. Because the company provides digital payment processing services to banks and other financial institutions, the company is subject to examination by the Federal Financial Institutions Examination Council (the ‘FFIEC’), an interagency body primarily comprised federal banking regulators, and the company is also subject to supervision or examination, as may be applicable, by various state and international financial regulatory agencies that supervise and regulate the financial institutions for which the company provides digital payment processing and other payment related services. In many countries, the company is legally or contractually required to comply with the anti-money laundering laws and regulations, such as, in the United States, the Bank Secrecy Act, as amended by the USA PATRIOT Act, and similar laws of other countries, which require that customer identifying information be obtained and verified. In some countries, the company is directly subject to these requirements; in other countries, the company has contractually agreed to assist its sponsor financial institutions with their obligation to comply with anti-money laundering requirements that apply to them. In addition, the company and its sponsor financial institutions are subject to the laws and regulations, enforced by the Office of Foreign Assets Control, that prohibit the U.S. persons from engaging in transactions with certain prohibited persons or entities. Similar requirements apply in other countries. The company is subject to anti-corruption laws and regulations, including the U.S. Foreign Corrupt Practices Act (‘FCPA’) and similar laws outside of the U.S., such as the U.K. Bribery Act, that prohibit the making or offering of improper payments to foreign government officials and political figures. The company is subject to the Telephone Consumer Protection Act (‘TCPA’) and various state laws to the extent the company places telephone calls and short message service (‘SMS’) messages to customers and consumers. Competition In the United States, the company competes with a large number of providers, including but not limited to Fiserv, Inc. (‘Fiserv’), Worldpay, LLC (‘Worldpay’), Chase Paymentech Solutions, LLC, Elavon, Inc., a subsidiary of U.S. Bancorp, Bank of America Merchant Services, Wells Fargo Merchant Services, Toast, Inc., Stripe, Inc., Shopify Inc., and Block Inc. The company competes outside the U.S. with financial institutions in the markets in which the company operates, as well as both large providers (such as Worldpay, Worldline, Nexi) and new entrants (such as Adyen, Block and Stripe). The company’s competitors in Issuer Solutions segment include, but are not limited to Fiserv, FIS, Marqeta, Nexi, Worldline, i2c, Bill.com, AvidExchange, Billtrust, Adyen, Stripe and Zeta. History Global Payments Inc. was founded in 1967. The company was incorporated in Georgia in 2000.