Global Payments Inc. executives highlighted its strategic partnerships with PayPal Here in the U.K. and CaixaBank in Brazil as vital to its business in the coming year.
While the company didn't meet fourth-quarter earnings expectations, the payments processor's leaders expressed optimism during a July 25 conference call to discuss its earnings. They pointed to the new partnerships, improvements in Canada and an end in sight for the costs associated with security upgrades that followed
Global Payments will work with eBay Inc.'s PayPal as part of the rollout of the PayPal Here mobile card reader in the U.K. later this summer, chairman and CEO Paul R. Garcia said.
Garcia did not elaborate further on the planned U.K. launch, but the strategy builds upon a partnership from last year, when
In addition to the PayPal initiative in the U.K., Global Payments will expand its strategic partnership with CaixaBank, with Caixa taking a 50% share in Global Payments Brazil, Garcia said.
"The partnership will allow Caixa to use their expertise in Latin America and provide us the opportunity to grow more rapidly in this important region with potential expansion into other Latin American markets over time," Garcia added.
The partners will form Commercia Global Payments Brazil, Garcia said.
"Caixa has a number of significant and direct investments in significant players who can be potential customers for us," Garcia added. "A lot of Caixa's technology will help accelerate our product delivery."
The arrangement with Caixa bank "does not preclude us from doing more with other financial institutions" for added distribution of Global Payments products or services, Garcia said.
Global Payments has already secured "a fair number" of merchants in Brazil, with business growing in that region much faster than anticipated, he added.
The Atlanta-based company reported revenue of $618.4 million for the fourth quarter of its fiscal 2013, a 4% increase from a year earlier. For the full fiscal year, which ended May 31, Global Payments reported revenue of $2.4 billion, an 8% increase from fiscal 2012.
Its net income for the fourth quarter was $46.3 million, a significant boost from the fourth quarter of 2012 at $11.6 million when the company was first dealing with the security breach. For the full year, its net income rose 10%, to $239 million.
David Mangum, Global Payments' senior executive vice president and chief financial officer, said the company should see improvement in its North America business, partly from its acquisition of Accelerated Payment Technologies, which it completed in the second quarter. APT has exceeded expectations, he said.
"North America margins will get a full-year benefit and nice growth from APT, but we also see independent sales organization revenue growth slowing down a little bit," Mangum said. ISO fees and profit margins affect Global Payments' revenue ledgers.
In addition, the processor's U.S. business grew in the past year and "revenue from Canada, which was moving backward in 2013, is going forward in 2014," Mangum said.
The U.S. market generated a 6% increase at $3.72 million for the fourth quarter, compared to $3.52 million a year earlier.
Canada had a 2% decrease in revenue for the quarter at $77.1 million compared to $79 million a year earlier.
