Global Payments CEO says big tech mergers are getting the US closer to going cashless
Pay with your thumb and pay with your face are only the beginning
Jeff. There's been a flurry of mergers going on in this whole Fintech industry. Of course, there is the big $22 billion deal that you did with Total System Service's pieces. And then there's a whole long list of other companies. Fidelity National, Ah, Fiserv, World Line. The list goes on and on. What's behind all of these mergers and why is it going on right now? Sure. Well, Global Payments is a technology company that developed software that allows merchants and banks to issue cards and take payments. You know, at its core, that's what we d'oh to be in that business and be successful globally, you need tohave scale. I think a lot of those murders are all about how do I justify making investments into new products innovation, new geography, ese and the answer to that as I need a bigger base against which has spread those costs, I need scale. I think that's what's driving this murders. And so what can you do now with pieces that you couldn't do before? Or maybe that you could do better now that you're combined? Well, certainly we could make more investments combined. Then we could stand alone. So, for example, some of the future products that were inventing right now Jesus has been issuing business meeting. They help issue credit courts for banks. Global payments was not in that business we have in acquiring business being we facilitate acceptance for merchants. By combining Kardashian's butt court acceptance, we could develop more products. And service is for consumers to make payments online, for example, more secure and provide more complete solutions to our customer base. Help us picture a little bit about the changing landscape because we're all used to using either cash or check credit cards, our cell phones. But with all of these murders that are going on and all the new technology, how is the whole landscape changing about the way we do business with merchants? Well, I think the way you actually shop every day is gonna change. A good example is right here in the turnstiles in New York City, so contactless meaning instead of using your phone, or instead of taking your Carter your wallet much like the tube Susie in the UK, you'll just take your wallet out of your personality was put on top and then you've automatically paid so I expect to see more contactless innovation here in United States. The other thing I expect to see which is a little bit longer dated is more use of Q R code. So in Asia, for example, use your cell phones. You actually don't use a code, and there's like a U P c kind like you see at the supermarket code. And that's actually we get scanned at the point of sale, not a card. So I think the future of the business is very bright, and I think you'll see a proliferation of different means to pay. We hear a lot about pay with your face. How close is that? We'll pay with your thumb. Now become today with your face. So we provide. Service is to 20 the top 40 quick service restaurants in United States, and we also facilitate. We don't do it ourselves, but facilitate delivery. Grubhub indoor dash back to your house Today you can pay with your thumb, or you could pay with your face to do that today. So that's all right here. Now pay with your palm. I think it's the latest thing, and we'll see whether that works out you talked about scale when we just started the conversation, and we know you just did this huge deal with a teeth. But do you need to make more acquisitions, more deals, maybe even consider partnering with someone bigger so that you could do more exciting techie things? But we're not finished yet. I have a lot of energy, and I think we have a lot more things that we can do but listen. In a scale business consolidation is always part of the game because our economics really depend on getting the next transaction in. Each incremental transaction at the margin is cheaper than a prior transaction. That's what Dr Scale Economies, which is why consolidation really makes so much sense. So expect to see more of it, more of it here in United States and really more than globally. Because you think about technology investing in general, there's no reason why we shouldn't have a much bigger on base against which to spread these investments over time. So companies like PayPal that we know so well square apple pay. They've been doing this for years. Where do they fit into this whole new payments world? Well, most of those are partners in the ecosystem with the nice things about our businesses were gently the beneficiaries of innovation. So papal, for example, is one of our big partners. So his Visa, MasterCard, the more innovation you see at the point of sale, let's think about contactless, which is really coming from these and massacred in the banks. The more innovation there, the better our service is more highly value. They are. So the other day, the nice thing about where we are, Susie, is that we the beneficiary of all those things, they get rolled out in the market. You know, when we look at what people in China are doing, they have so far ahead of us in terms of using cash or card on doll that they've really gone cash list. How long is it gonna be before we're living like that here in the U. S. This year? It away? Is it a decade away longer? I think it's longer. That's gonna take a long time. In fact, you very seen efforts by some local governments to ban, like Amazon go some of the cashless initiatives that you've seen at a fear that the unbanked or the underbanked are not gonna be well represented in some of those markets. So I think it's been quite some time. But what I do think will happen and it's happening today is a share of the payments that's going into the digitization, which is to say, moving from cash on dhe check into Elektronik that is only going to increase on. That's increasing all income levels. So I think cash and cheque will go down in percentage, maybe a really long time before we go truly cashless. So what? The economic impact of all of this as people go as we go more towards that cashless world, what does it mean for our economy? Short. So I think the easy answer is, the more you can do something, the easier it is, the more you gonna do with it. You know, at the end of the day. And I think if you look at the history of credit card transactions in the United States, the more loyalty points and more rewards and more inclusive those things are the more people. So it's nothing but good news. I think for the consumer economy that it's better, faster, cheaper for consumers to buy things at the point of sale that you can buy it on the phone by paying with your thumb of your face that you buy it online, that you could return in a physical store that does nothing but reduce the friction that's embedded in commerce and give people more twice, which I think is a very good thing for society. Lord Jeff, When you became a CEO of global payments just seven years ago, you told your employees we will become a Fortune 500 company by the next decade. He just missed it for this year, but you're getting very, very close. Why is this milestone so important to you and to your employees? I think it's super important for us to set really audacious goals when we're starting out. And really, the way I looked at that, Susie was that was really a proxy for doubling the size of the company by way of revenue, which is really the metric that fortune uses, I think is very important when you're driving in business with 24,000 people to be able to say objectively, what is success? What is good behavior? What is not success and what is not great behavior. And I think setting up a milestone that took us about seven years to achieve, which is to say, doubling the size of the company, getting more scale in what we do more than double the market value of the company, I thought was a really good objective to set and of course, much, much like people in politics. I said, And doing it by the end of the decade was ultimately our goal, and I was really pleased that our folks and I will be celebrating that. More importantly, how do you want people to be describing global payments? Let's say 23 years from now, What is it going to be doing that's different than what you're doing now? So I think it's really as a cutting edge technology company where I tell folks all time is we really transformed the business from kind of legacy payments processing business into a cutting edge technology company, and those are the folks that we need to hire. Those are the folks who need to motivate on the folks that we need to retain, and I want people to think about it as I could go work at Apple. I could go work at Google. I could go work a global payments. I really want to put us in the same category as the most sophisticated, complex, well respected, unknown brands in the world for technology, and that's the kind of message I think we're trying to.