Global Payments adds Google Cloud to spur merchant growth

Global Payments is working with Google to integrate the tech giant's cloud services.

The arrangement, which focuses on merchant services, comes about six months after Atlanta-based Global Payments secured a similar partnership with Amazon Web Services on the issuer side of its business.

The Google partnership enables Global Payments to shift its merchant acquiring technology to Google Cloud, and integrations into Google Workspace, My Business and Ads. Merchant clients would have access to the software-as-a-service offerings for data and analytics, omnichannel ordering, payments, e-mail marketing, online services, loyalty, gift cards and other point-of-sale and payroll solutions.

In addition, Global Payments becomes a merchant acquiring provider to Google, which will leverage the Global Payments commerce platform for payment acceptance technology. It also establishes a co-selling arrangement for the companies, with joint go-to market strategies for referral and new customer acquisition for both through various tech channels, while also driving growth by helping merchants connect with consumers through search channels.

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With relationships established with both Google and Amazon, issuers and merchants served through Global Payments will convert legacy coding and technology into the digital offerings now available, said Global Payments CEO Jeff Sloan. It also sets Global Payments apart from competitors in working with two technology mega-companies, Sloan added.

"We've had a first-row seat in terms of our relationships with Amazon and Google in the past," Sloan said during a Monday earnings call. "Our issuer folks have worked with AWS for a number of years as part of their modernization initiatives, so on the issuer side it is technology modernization and transformation at the same time."

On the merchant side with Google, the merchant clients are already engaged in many digital services, so the partnership represents "more of a shift rather than a lift and shift in the merchant business," Sloan noted.

It will be vital for merchants to have access to the Google cloud services through the Global Payments network, said Cameron Bready, president and chief operating officer at Global Payments.

"We know Google in the merchant business very well," Bready said. "What struck me most is the shared vision we both have as it relates to helping merchant customers drive opportunities for their businesses digitally, which they need now more than ever."

The other key factor is that Google services will help merchants "run their businesses more efficiently and effectively," Bready added. "We have very shared visions around innovation, and about anything that we can do to help our customers drive more customers to their businesses."

Global Payments will eventually establish new service and pricing tiers that incorporate the Google cloud offerings.

"We are trying to create an even more differentiated portal offering to our customer base by enhancing our existing value-added services and as co-develop new products with Google, we would incorporate those into the portal as well," Bready said. "The nice thing about a portal environment is it is completely self-select."

Global Payments reported revenue of $1.79 billion for the fourth quarter of 2020, about a 3% decline from the $1.8 billion it reported the previous year. Net income for the fourth quarter was $540 million, up from $488 million the previous year before the acquisition of TSYS was completed.

Global Payments executives sang the praises of the company's efforts to continue to grow the company while navigating the rough waters of the COVID-19 pandemic. Just a few months after closing a $21.5 billion deal that merged Global Payments and TSYS in September of 2019, the first signs of how difficult the pandemic would become were starting to surface.

The combined company is serving about 3.5 million merchant locations and 1,300 financial institutions in more than 60 countries physically and reaching more than 100 virtually.

One goal of the acquisition was to push the TSYS technology into more global markets for e-commerce growth and cross-border payments, while also adding the scale needed to compete with Stripe and Square in those worlds. TSYS also owned the prepaid card provider Netspend, a business that allowed Global Payments to claim it delivered stimulus payment checks to American citizens faster than any other service.

For the entire year, Global Payments reported a 5.2% decline in total revenue at $6.75 billion, compared to $7.12 billion the previous year. Net income for 2020 was $1.92 billion, compared to $1.23 billion in 2019.

"We are in a scale business, and that continues to be true today and it will continue to be true tomorrow," Sloan said. "More scale in a scale business is always a good idea. We have shown this with Heartland and with TSYS, and I don't think having scale in a technology business is ever going to go out of favor."