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Why Global Payments to Buy Tsys is "more defensive than offensive"




<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This is the third mega-merger this year in the payment industry : Global Payments ( GPN ) buys Total System Services ( TSS ) in a $ 21.5 billion share sale, announced companies Tuesday. Data response time = "15"> It is the third mega- merger in the payment sector this year: Global Payments (GPN) buys Total System Services (TSS) in a $ 21.5 billion share sale, the companies announced Tuesday

<p class = "canvas-atom canvas text Mb (1[ads1].0em) Mb ( 0) – sm Mt (0.8em) – sm "type =" text "content =" This agreement follows payment processor Fiserv first buys Data for $ 22 billion in January, and & nbsp; Fidelity National Services & nbsp; bought Worldpay for $ 35 billion in March. "data-reactid =" 16 "> This agreement follows payment processor Fiserv acquires first $ 22 billion data in January, and Fidelity National Services buys Worldpay for $ 35 billion in March.

<p class =" canvas-textile textile Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" As CFO Cameron Bready [n/a told Yahoo Finance its Yfi AM live show We is in a scale business, and the scale is always useful … what's nice about bringing our two companies together, that's the right kind of scale. Unlike other deals that are made in our room, we are interest-bearing debt. "" data-response time = "17"> As CFO Cameron Bready, Yahoo Finance told its Yfi AM live show, "We are in a scale business, and the scale is always useful … what's nice about bringing our two companies together, is it the right kind of scale. Unlike other deals made in our room, we are paying interest money. "

The pairing of Global Payments and Tsys, says Bready," better positions us both to compete with the perpetual Changing landscape around payments We get exposure to over 900 premier financial institutions globally, with whom we can now collaborate … In addition, Tsys has good exposure to digital P2P payments, as well as B2B payments through the NetSpend business. "

But At least one payment analyst doesn't see it that way.

Dan Dolev from Nomura Instinet calls the deal "more defensive than offensive" and adds, "I don't think this merger makes much sense strategically."

Dolev sees the merger as just the last sign that large payment operators are frightened by Square, which rapidly increases the merchant's market share.

Square CEO Jack Dorsey is interviewed on the floor of New York Stock Exchan Ge, Thursday, November 19, 2015. (AP Photo / Richard Drew)

<p class = "canvas-textile-textile Mb (1.0em) Mb (0) – sm Mt " Jack Dorsey should be happy "" data-reactid = "33"> "Jack Dorsey should be happy "

– sm" type = "text" content = " p class =" canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Nomura has religiously tracked downloads of Square's Cash App vs. PayPal Venmo and Dolev say Cash Apps gains are bad news for Tsys, since the Netspend service targets the sub-bank – the same demogr Afiska Cash App services with their new debit card . "data-reactid =" 34 "> Nomura has religiously tracked downloads of Square's Cash App vs. PayPal's Venmo, and Dolev says Cash Apps winnings are bad news for Tsys, since the Netspend service targets those sub-bank – the same demographic Cash App services with their new Debit card.

Dolev concludes that the Global Payment Merger with Tsys "strengthens Square's superiority, because it all happens as a result of the disturbance caused by Square – both at the merchant, where Square goes after retail and restaurants and gobbling up, but also at prepaid Netspend angle, where the Cash App gets a lot of traction and goes after this. So I think Jack Dorsey should be happy. "

In the first quarter 2011 revenue report, the net amount for Global Payments in North America (fee collected on behalf of card companies such as Visa, MasterCard) was only 3%, another metric Dolev says is bearish for global payouts, because visa revenues from such Taxes increased by 8% in the same quarter, in other words, Global Payments are underperforming the growth of the major US payment industry. "Our research shows that the global situation in Global Payments is much worse than they say," Dolev explains.

The story of the payment processor business in 2019 has been about M&A so far this year, won "Not the case in 2020," says Dolev, because Global Payments Tsys is probably the last major reel in the room. He doesn't see any "natural acquirers" for Square now, as he argues, Square "gives a scarcity value."

<p class = "canvas-atom canvas text Mb (1.0em) Mb) – sm Mt (0.8em) – sm" type = "text" content = " Daniel Roberts is a senior author and live show hosted on Yahoo Finance. He covers paid tech. Follow him on Twitter on @ readDanwrite . "data-response =" 39 "> Daniel Roberts is a senior author and live show host at Yahoo Finance. He covers paid tech. Follow him on Twitter at @ readDanwrite .

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<p class =" canvas-atom canvas text Mb (1.0em) Mb (0.8em) – sm "type =" text "content =" Square's new debit card "kills several birds with a stone" "data-reactid =" 42 "> Squares new debit card kills several birds with a stone"

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Why Square's bitcoin game was" brilliant " "data-reactid =" 43 "> Why Sq uare's bitcoin play was" brilliant "

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