Tuesday, June 25th, 2019
According to a new report by Bloomberg.com, a new major deal may be in the works within the payments industry. There is talk of a potential merger, joint venture, or partnership for Global Payments Inc. and Total System Services Inc. (TSYS). Thus far, the two merchant-processing powerhouses have held preliminary discussions about the arrangement.
Both Global Payments and TSYS specialize in traditional merchant processing, while also targeting integrated payments via software developers. Both companies have shared their recent success’. Global Payments’ recent earnings report shows North American integrated payments growth as very strong.
Likewise, TSYS has revamped its Vital brand for the Vital POS services. The company has also launched a mobile point-of-sale business with wireless carrier T-Mobile US Inc., called GoPoint. TSYS is also a major provider of processing services for credit card issuers. In short, both companies are presently experiencing strong growth and taking advantages of opportunities.
If a deal is struck this year, it would be the third megamerger of 2019 for the payments industry. Fiser Inc. announced its plans at the beginning of the year to acquire First Data Corp. for $22 billion. Then, in March, Fiserv competitor Fidelity National Information Services Inc. (FIS) announced its $43 billion deal with Worldpay Inc.
The ‘Big Guys’ Join Together
So, why are so many of the big names in the payment industry suddenly focusing on deals and mergers? First, the industry is ever-changing, and so are the needs and preferences of consumers. Customers today demand a seamless, fast and hassle-free processing service. They expect multiple payment options and the latest in technology. To keep up, many companies are banding together to offer even better services.
Second, many of the large companies feel that it is necessary to work together to remain competitive. There are many new startups entering the market with fresh ideas. To strengthen their presence, companies like Global Payments and TSYS are choosing to merge.
A Global Payments-TSYS relationship would not be surprising, according to investment firm Keefe, Bruyette & Woods Inc. in a research note Friday. “Given the two large mergers that have already occurred within the space this year…, we are not surprised that two of the larger players left standing are contemplating their options, including a potential tie-up,” KBW said.
“We think there are multiple options that may make sense (merger, JV, partnership) given the assets and strengths of each company (i.e. GPN on the merchant-acquiring side and TSS on the credit card issuer processing side).” GPN and TSS are the stock-exchange symbols for the two companies.
Just last month, the following early trading information was released for these two companies. Global Payments shares were valued at $152.92, and TSYS shares at $109.61.
Where to Find Merchant Services
With so many companies and startups in the payments industry, it can be hard to know which one is right for your business. If you need to compare companies and browse helpful reviews, consider the information Best Payment Providers has to offer. Find everything you need – including industry updates – to choose the provider that will help your business thrive.