Global Payments Investment Thesis

Global Payments Inc. provides payment technology and software solutions for card, electronic, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific. It operates through three segments: Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions. The Merchant Solutions segment offers authorization services, settlement and funding services, customer support and help-desk functions, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and statements, and on-line reporting services. This segment also provides an array of enterprise software solutions that streamline business operations of its customers in various vertical markets; and value-added services, such as point-of-sale solutions, and analytic and engagement tools, as well as payroll and human capital management services. The Issuer Solutions segment offers solutions that enable financial institutions and retailers to manage their card portfolios through a platform; and commercial payments and ePayables solutions for businesses and governments. The Business and Consumer Solutions segment provides general-purpose reloadable prepaid debit and payroll cards, demand deposit accounts, and other financial service solutions to the underbanked and other consumers, and businesses under the Netspend brand. It markets its products and services through direct sales force, trade associations, agent and enterprise software providers, referral arrangements with value-added resellers, and independent sales organizations. The company was founded in 1967 and is headquartered in Atlanta, Georgia.

Global Payments (GPN): What Happened?

1. Executive Summary

Global Payments, like its peers Worldline and PayPal, has been de-rated as the market assumed payments had become a commodity. The thesis for GPN is now a value play: Can they successfully pivot to software-led payments (POS, Vertical Software) faster than their legacy merchant acquiring business decays?

Key Thesis Points

The "Junk" Disposition: GPN is actively pruning low-margin businesses and exiting geographies to focus on core profitable markets. This shrinks revenue but improves quality.
Valuation Floor: Trading at <10x forward earnings, the market is pricing in zero growth. Any stabilization in organic revenue growth would drive a re-rating.
Buybacks: Management is using free cash flow to aggressively buy back undervalued shares.

2. Business Overview

Merchant Solutions: Payment terminals and e-commerce gateways.
Issuer Solutions: Processing services for credit card issuers (banks).

3. Risks

Adyen/Stripe: These modern competitors iterate faster. GPN is burdened by legacy tech stacks that are hard to modernize.
Macro Sensitivity: Payment volumes are directly tied to consumer spending. A recession hits GPN immediately.