While a multibillion-dollar acquisition involving a card technology seller and payment processor looks like an obvious bridge between two sides of the same industry, these arrangements often end or radically change.
Global Payments has agreed to sell its issuer solutions business to FIS for $13.5 billion while acquiring Worldpay from investment firm GTCR and FIS for $22.7 billion. It's designed to reduce bank technology company FIS' reliance on merchant acquiring while removing card issuing technology from Global Payments menu.
It also draws attention to the complexity of unions that try to do both, given that the new agreement is the latest in a series of M&A moves involving FIS, Global Payments and Worldpay.
"The idea of serving both ends of the card value chain may seem attractive but in reality, the synergies are limited," Aaron Press, research director of worldwide payment strategies for IDC, told American Banker. "It is effectively two very different markets with very different needs."
Tipping the scale
The new Global Payments/Worldpay agreement is expected to close in the first half of 2026, and the firms will continue to partner on technology development. FIS did not return a request for comment. "The divestiture allows us to sharpen our focus," said Cameron Bready, CEO of Global Payments, during a conference call with analysts. "This will simplify our business."
As separate firms, Global Payments and Worldpay processed more than 94 billion transactions and $3.7 trillion in volume across more than 175 countries in 2024.
Global Payments will be a "pure play" as a merchant solutions business with significantly expanded capabilities, extensive scale, greater market access and an enhanced financial profile, Bready said, adding the company anticipates yearly cost synergies of $600 million from the move, as well as revenue synergies of at least $200 million.
"Being a scale player in this industry matters more than ever," Bready said. "This accelerates our transformation."
The latest Global Payments/Worldpay agreement is a "win" for all involved, according to IDC's Press. GTCR earns funds from the sale. FIS grows its already substantial issuing business, adds strong additional technology and services capabilities and can focus on servicing banks. Global Payments can expand its already substantial merchant portfolio and gain some significant technology assets, allowing it to compete more effectively in the enterprise and platform markets. And the customers of FIS and Global Payments get to work with vendors that are more focused, and more able to invest in the technologies and services that they need, Press said.
Other payment experts weren't as bullish.
"The last five years have made clear that scale-driven deals in merchant acquiring are unlikely to work, and we struggle to see how Worldpay and Global Pay, which both have long-term challenges, are ultimately additive to each other," Jeffries said in a research note. "This feels like a redux of failed 2019 playbooks."
In another research note, KeyBanc Capital Markets said neither company had previously indicated an appetite for M&A of this size in the near term. KeyBanc also said "we lean more positively on FIS around the transaction given the complementary nature of acquired assets and cross-sell opportunity. … We'd expect Global Payments' ability to integrate Worldpay to come into question considering the ongoing
Global Payments in late 2024 reorganized its management and product development to launch products faster. It also cut jobs and changed how the company's different units collaborate.
As part of the strategy, Global Payments will launch its expanded Genius retail payments and merchant service platform, over the course of 2025.
Genius, which is partly new payment technology and partly a reorganization of more than a dozen existing products, will deploy in the U.S. in May and internationally later in 2025. In a research note issued before the announced deal, William Blair said Global Payments will struggle against fintechs that compete for merchant payments. William Blair also suggested the issuer side of Global Payments was better shielded from competition and was an acquisition target.
What is the 2019 playbook?
The latest announcement from Global Payments, FIS and Worldpay grew out of a series of M&A activity six years ago that involved legacy companies designed to broaden scale across payment processing and card issuing as technology-focused rivals such as PayPal, Square and Stripe gained ground and began targeting larger merchants.
The payments M&A wave of 2019 totaled more than $100 billion and included
"There's no question that the legacy acquirers are under stress. The battle against becoming commodity processors, or 'dumb pipes,' has been going on for years as technology and value-added capabilities have become more and more part of the business," Press said. "This is substantially due to changes in the retail environment, with omni-channel commerce and marketplace models driving the need for new ways to serve retailers and their customers."
Within four years, the initial FIS/Worldpay combination started to fray. FIS in 2023 announced plans to
"This [latest deal] is essentially conceding that the vision of combining bank and merchant side data to drive reward programs hasn't worked out," Aaron McPherson, principal at AFM Consulting, told American Banker.
The Fiserv/First Data pairing, which is still intact, is a unique case where serving both banks and merchants is working, Press said, adding First Data had already figured out how to manage both issuing and acquiring, including, critically, the very different sales processes and revenue models. "It certainly helps that Fiserv's acquiring business is driven in part by bank partnerships," Press said.
