In a deal that will provide it with an instant
15 percent share of the UK’s card processing market, US payment
processor Global Payments is to buy a 51 percent stake in UK bank
HSBC’s merchant acquiring business for $439 million in cash. The
deal extends a relationship between the two companies that began
with the formation of a similar joint venture (JV), Global Payments
Asia-Pacific, in July 2006.
15 percent share of the UK’s card processing market, US payment
processor Global Payments is to buy a 51 percent stake in UK bank
HSBC’s merchant acquiring business for $439 million in cash. The
deal extends a relationship between the two companies that began
with the formation of a similar joint venture (JV), Global Payments
Asia-Pacific, in July 2006.
In the latest deal HSBC will retain a 49
percent stake in a new company to be created, HSBC Merchant
Services, which will serve 135,000 merchant outlets in a customer
portfolio that includes 20 of the UK’s 100 largest listed companies
and a diverse range of smaller businesses.
percent stake in a new company to be created, HSBC Merchant
Services, which will serve 135,000 merchant outlets in a customer
portfolio that includes 20 of the UK’s 100 largest listed companies
and a diverse range of smaller businesses.
In addition the JV will have the capability to
provide internet-based merchant acquiring services in at least 37
countries and 35 currencies. The JV forms part of a broader
strategy aimed at growing HSBC’s and Global Payments’ market share
in the UK and Europe.
provide internet-based merchant acquiring services in at least 37
countries and 35 currencies. The JV forms part of a broader
strategy aimed at growing HSBC’s and Global Payments’ market share
in the UK and Europe.
“We expect to focus on growing the customer
base by providing an expansive range of card payment solutions,”
said Global Payments’ CEO Paul R Garcia, a veteran of more than
three decades in the payment processing industry. “Longer-term,
with the adoption of the Single Euro Payments Area initiatives, we
expect to be in an excellent position to provide seamless acquiring
services to merchants throughout Europe.”
base by providing an expansive range of card payment solutions,”
said Global Payments’ CEO Paul R Garcia, a veteran of more than
three decades in the payment processing industry. “Longer-term,
with the adoption of the Single Euro Payments Area initiatives, we
expect to be in an excellent position to provide seamless acquiring
services to merchants throughout Europe.”
A key part of the JV’s strategy will be to
enhance marketing. Initiatives planned in the short term will
revolve around direct sales including targeting specific merchant
segments, enhancing sales force training, introducing additional
sales force automation tools and using a more focused sales
approach. In addition there are plans to introduce new products and
services that are generally more common in the US, such as online
merchant statements.
enhance marketing. Initiatives planned in the short term will
revolve around direct sales including targeting specific merchant
segments, enhancing sales force training, introducing additional
sales force automation tools and using a more focused sales
approach. In addition there are plans to introduce new products and
services that are generally more common in the US, such as online
merchant statements.
In 2007, HSBC’s UK merchant acquiring business
generated revenue of £114 million ($230 million). Global Payments,
which has operations in the US, Canada, Asia and Eastern Europe,
reported revenue of $310.6 million in the nine months to 29
February 2008.
generated revenue of £114 million ($230 million). Global Payments,
which has operations in the US, Canada, Asia and Eastern Europe,
reported revenue of $310.6 million in the nine months to 29
February 2008.
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