How Global Payments Looks to ISVs, Payfacs, And M&A to Spur Growth

Global Payments Inc. remains invested in growing by acquisition, but it’s equally committed to growth via third-party agents such as independent software vendors and payment facilitators, its chief executive said early Wednesday as he reviewed his company’s June-quarter results and discussed its strategies in the two markets it straddles—issuing and acquiring.

Global is relying heavily on its so-called profacs, or payment facilitators aligned with Global’s back-office services. Payfacs are independent software vendors that enable other firms to sign up merchants on the payfac’s merchant account. Once aligned with Global’s back-office services, these entities become what the company calls profacs. Global Payments began laying heavier emphasis on its profac strategy last year.

Now, merchant signings by these entities are up 40% since the start of the year, CEO Cameron Bready said, though he didn’t cite a number. Meanwhile, the profac strategy is driving ISV signings, he said.

The influx came as Global launched an update to its point-of-sale software. “We’re pleased with the reception” so far, Bready said. Altogether, Global added 3,500 point-of-sale locations in the quarter. “We’re very focused on merchant business and the intersection of software and payments,” Bready told equity analysts on the morning call. “Our ISV strategy and our POS strategy are core to where we want to drive the business.”

Not all the growth is organic. Having digested EVO Payments, the U.S. processor it paid $4 billion for last year, Atlanta-based Global apparently isn’t taking a breather from M&A, a strategy that extends to overseas markets. In June, the company closed on a $250-millon deal for Takepayments, a United Kingdom-based payments company that generated $67.1 million in revenue in 2022, the most recent year for which numbers are available.

But Bready also hinted Global may be moving toward pulling out of markets where returns aren’t matching expectations. “We are a large-scale provider,” he said, which allows the company to spread costs internationally. But he added, “we have to think hard about whether we should be in those businesses” where Global lacks economies of scale. But he stopped short of details, promising more on the matter later.

Still, one key investment for the company lies in direct merchant sales, where Global’s own employees sign merchants. “We are rebuilding our direct sales team to sell POS solutions direct into the market,” Bready said.

Card-issuing, a smaller part of Global’s business, will see more momentum in 2025 with new technology, Bready promised. “In the short-to-medium term, we feel good about that business,” he said. “We’re seeing new opportunities emerge, seeing good momentum.”

Global posted $2.32 billion in adjusted net revenue for the quarter, up 6% year-over-year, with a 12% boost in adjusted earnings-per-share to $2.93. The merchant-solutions unit recorded $1.81 billion in revenue, an 8% rise, on a 6% increase in dollar volume. Issuer Solutions recorded revenue of $527 million, up 4%. The company characterized transaction growth as “mid-single-digit” without being more specific.