Global Payments Inc. (GPN)

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Global Payments (GPN)

Citi Financial Technology Conference

November 7, 2012 10:40 AM ET


Jeff Sloan - President




Hello (inaudible) I’m a Member of the Computer Services Research Team here at Citi. We’re very pleased to have Jeff Sloan, President of Global Payments. Jeff is going to go through a presentation, short presentation about 10-15 minutes and then we’re going to open it up to Q&A. So Jeff, thank you very much.

Jeff Sloan

Thanks Will and thanks to Citi for having us here today. I’m also with Jane Elliott and Kay Sharpton also from Global Payments. I’m really going to cover three topics today in brief and then take questions. First is what is Global Payments today and how did we get where we are.

Second I will talk a bit about the market in a bit about then our strategy. But just to back up and get everyone on the same page. When we think about what our position and our strategy is for Global Payments it really has three elements to it. The first is we have a worldwide acquiring platform that enables processing of any transaction on any device at any time and that’s a core part of what we do and we will talk more about this as we go through it.

Second, we have multiple avenues of distribution today. For our products we have direct distribution which I will also talk about and we also are a partner of choice for wholesaling our business and I will talk more about that too. And then lastly we think we are very well positioned and very attractive end markets.

We will talk a little bit about our most recent deal with HSBC and the attractiveness of India and Mainland China in particular. Just to start with a snapshot of global payments today. On the left hand side of this page, we have roughly a 70-30 split today of net revenue between North America which for us of course is U.S. and Canada. And we will be calling international for the rest of the world. Our business in Brazil today is a startup that’s also included in North America.

On the right hand side of the page, just to give you a sense of size. We are one of the four largest processors, acquirers worldwide. We are physically present in over two dozen countries around the globe and we process roughly a third of a trillion dollars of volume per year again around the world.

In terms of our go to market strategy, globally there are really three elements to what we do and I touched them initially. The first is to expand the scope of our distribution. If you think about what we do we have a distribution end point largely to our merchants, banks or other partners. We have a technology platform that is then customized by geography. So our first strategy is to go to market through distinctive means of distribution that means two things first direct distribution. We have a roughly 1000 sales people today around the world who are W2 employees and who have quota and are directly producing today globally.

Second is our partner of choice model, where we are effectively a wholesaler and in that business we have bank partners, we have VAR partners and I will talk more about APT additionally in the presentation. We have ISO partners mainly here in the United States and we have got partners in areas like e-Commerce and Card-Not-Present like CyberSource and Visa.

And interestingly that model is changing a bit which is something I will also talk about as it relates to our mobile strategy. The ability to provide solutions to companies like O2 which is a telecommunications company that we announced a few weeks ago. We had entered new partnership with Europe. The ability to actually distribute through mobile technology using what we call here a payment service provider or aggregation model. We’re providing wholesaling services to someone like O2 and then they are reselling those services through mobile technology into their consumer and customer base in United Kingdom. I think it's a new line of business for us and that’s why it's broken out separately here in terms of distribution.

What this means is if you walk into a O2 store in the United Kingdom and you’re a carpenter or a plumber or a painter and alike and get a phone from O2 that will come with an EMV compliant dongle that you can then use to process transactions and we’re wholesaling that infrastructure to O2 today. We announced a similar deal with Yell which is now called Hibu and there is more on that to come but that’s another distinctive element of distribution and I think that you will see more of from us going forward.

Our second initiative is to grow our geographic footprint. We have expanded our business in the last couple of years in Europe through a partnership for example with La Caixa in Spain.

We have expanded our business in Asia-Pacific, most recently through our agreements to repurchase a 44% minority interest from HSBC and expand our business beyond HSBC there is a very good partner of ours into other regions in Asia-Pacific including in particular India and Mainland China and lastly I touched on our expansion into Latin and South-America especially in Brazil.

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