Fintech Giants Join Forces To Dominate Payments Space

Columbus, Georgia-based financial technology firm Total System Services (TSYS) and its Atlanta-based rival Global Payments announced last week that they will be merging. The deal was announced by Global Payments, who called it a “merger of equals.” The $21.5 billion all-stock transaction will result in a larger payments processor—but might also lead to job cuts at the newly-combined company.

Catching a wave of merger frenzy within the fintech industry, the Global Payments-TSYS merger is the third such deal in the payments industry to date this year. As with the previous two deals—Fiserv’s acquisition of First Data Corp. in January and Fidelity National Information Services’ merger with Worldpay in March—the main goal behind the merger is to create a two-party payments platform that can service merchants and financial institutions alike.

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Under the terms of the deal, the newly-formed company will operate under the Global Payments name with headquarters in both Atlanta and Columbus. Global Payments shareholders will own 52 percent of the newly-created company, while TSYS shareholders will own the other 48 percent. Executives project that the new company will process in excess of 50 billion transactions annually in 100 countries, catering to 3.5 million merchants and over 1,300 financial institutions.

In a statement, TSYS chairman and CEO Troy Woods stated: “Our companies share common values, a strong culture of putting people first, and a relentless commitment to doing the right thing, making this combination the perfect fit.”

Global Payments CEO Jeff Sloan concurred, telling MarketWatch that “[the merger] accelerates the strategy we’ve had for the last couple of years to grow in the most attractive markets with a leading international payments business, a leading e-commerce and omnichannel business, and exposure to the fastest-growth geographies.”

The merger is expected to close later this year. Sloan will continue on as CEO in the newly-formed company, while Woods will act as chairman.

Following the deal’s announcement, TSYS shares climbed 5.6 percent in next-day trading, following a 14 percent gain in the previous week when rumors of the deal first emerged. Global Payments, on the other hand, saw its share price fall 2.2 percent in next-day trading after rising on deal rumors the prior week.