Global Payments Shows Glimmers of Optimism in the Face of Covid-19 Lockdowns

Lockdowns and social distancing have been a gut punch for many payments businesses, but early Wednesday top executives at Atlanta-based processor Global Payments Inc. indicated the pain may be wearing off. “We’ve already seen stabilization in April,” chief executive Jeff Sloan said during a morning call with equity analysts. “We like the trends we’re seeing, though it’s too early to say how permanent they will be.”

Global’s 3-year-old Xenial platform has been a star performer, the executives said, as restaurants that have been forced to shut down their dining rooms struggle to meet demand for online ordering, takeout, and delivery. Some 1,800 restaurants have signed up for online ordering just since mid-March, added Cameron Bready, president and chief operating officer.

E-commerce processing is thriving as consumers stuck at home shift shopping patterns away from in-store purchases. The company’s ominichannel and e-commerce processing business was up about 10% last month, Sloan reported. 

The company has also seen a 30% jump in contactless payments year-over-year, Sloan said, though he did not give specifics. Companies are reporting higher contactless card usage as consumers avoid touching keypads at the point of sale.

The coronavirus, Sloan added, “is going to shift [companies] to a further digitization of payments. We will be the beneficiary of the trends catalyzed by Covid-19.” The virus, which causes the Covid-19 respiratory disease, prompted stay-at-home orders in most states by March, and mostly affected payment volumes for that month as companies report first-quarter results.

Overall, volume trends for Global’s merchant business, which accounts for close to two-thirds of the company’s revenue, “have begun to recover,” reported chief financial officer Paul Todd during the call, held to discuss the company’s first-quarter results. This performance, he added, is “offset” somewhat by the slump in in travel, which has hurt Global’s commercial card business.

Another piece of good news for the company was a decision by Truist Financial Corp. to choose Global for issuer processing. Truist is the big Charlotte, N.C.-based banking company formed in December through the merger of BB&T Corp. and SunTrust Banks. Here, Global was helped by its $21.5-billion acquisition last year of Total System Services Inc. (TSYS), which processes transactions on both the issuer and merchant sides of payments. The conversion of Truist’s accounts, which will take place late 2021 and early 2022, “aligns perfectly with our TSYS issuer services,” Sloan said.

Truist may be among the biggest of the new wins, but others are likely to follow, executives assured the analysts. “Our pipeline remains very full,” said Sloan, adding, “this is the time to be opportunistic.”So far, at least, Global’s business “is holding up pretty well, all things considered,” Bready said. All told, Global reported $1.73 billion in first-quarter revenue, virtually flat year-over-year with TSYS included. TSYS did not officially become part of Global until September. Global’s merchant-solutions unit racked up $1.1 billion, up slightly from $1.08 billion in 2019, again with TSYS added in.