PayPros Deal Supports Global’s Strategy, But Not at Expense of ISOs, Company Says

Global Payments Inc.’s $420 million deal to buy integrated payments-software maker Payment Processing Inc., or PayPros, is furthering its strategy as the payment processor looks to grow its direct sales, says a Global Payments spokeswoman.

Atlanta-based Global Payments announced the deal Friday to buy the Newark, Calif.-based PayPros, which specializes in developing payment features that others can incorporate into their software. Founded in 1995, the independent sales organization has about 58,000 small to mid-size merchants in its portfolio.

The deal not only expands its direct-sales segment, it also will aid the processor’s plan to expand into new vertical markets, Global says. Analyst David Koning, at Milwaukee-based investment firm R.W. Baird & Co. Inc., says in a research note that some of those markets include self-storage, vacation rentals, dry cleaning, tourist attractions, schools, and other businesses. It should complement Global Payments’ 2012 acquisition of Accelerated Payments Technologies Inc., a Pleasant Grove, Utah-based ISO and integrated payments provider, Koning adds.

“This gives us the further opportunity to expand our integrated model,” says the Global Payments spokeswoman. PayPros 2013 revenue is expected to be approximately $100 million.

Global Payments’ focus on integrated payments is not at the expense of its ISO relationships, David E. Mangum, chief financial officer and senior executive vice president, said in a January conference call on Global Payments’ second-quarter earnings results. “The ISOs are great partners,” Mangum says. “We served them well for the last decade and beyond. That will continue to grow.”

Still, Global Payments is looking at ways to increase the amount of revenue under its control, he said. “It\’s certainly incumbent on us to continue to grow our other channels around them and make sure that we, with the partner-of-choice strategy, have arrayed a series of channels and distribution mechanisms that allow us to grow for the long term.”

That begat the focus on integrated payments, and the “focus on either directly or with partners driving access to mobility, mobile payments, tablet processing, whatever is going to be the paradigm that merchants use and consumers use for processing over time,” Mangum said. “And that kind of complexity is nothing but good for us.”

Global Payments expects the PayPros deal to close by May 31, its fiscal year end.