Name: Global Payments lands on the Fortune 500 for the first time
Uploaded: 2021-06-01
Duration: 8 min 20 s
Description: CEO Jeff Sloan says the pandemic accelerated the need for contactless payments.

CEO Jeff Sloan says the pandemic accelerated the need for contactless payments.

Global Payments lands on the Fortune 500 for the first time

Leadership

Jeff. So great to see you again and to talk about all the new developments at global payments. You know, the last time we talked was a year ago and it was before all of us were using the word pandemic. And at the time you said to me that contact list innovations will become very commonplace. We're talking about things like QR codes paid with your thumb, paid with your face. And actually we've been doing that. All of us have been doing that over the past year. How has the covid pandemic changed your business? Well, it's a great question, Susie. And what a difference a year makes. Let's just start by start of course by saying that. But so I think the pandemic has really accelerated the digitization of payments which was already ongoing but accelerated it by 3-5 years. So many of things that you just refer to contact lists and QR codes are great examples really are examples of what we call safer commerce. That means still transacting business the way you used to but not actually touching anything physically. So if you think about what we talked about last year, paying with your thumb, paying with your face, paying with a QR code. Pay by length paying by taking your iphone for example, I'm putting it down in the terminal rather than you taking your card and actually sticking it into the terminal and touching the keypad. Those are all trends that were underlying in the payments business for a number of years. But the pandemic brought ahead the adoption of that stuff by 3-5 years. And to be honest, I don't really see that changing. I mean it's remarkable how things have changed. I mean it's very unusual to see cash changing hands. You wrote an op ed piece recently about how much consumer habits have really changed in the past year. And uh you said that safe, commerce, just as you mentioned, is here to stay and that any business that isn't taking advantage of these new preferences is already falling behind the competition. So talk to us a little bit more about the trends you're seeing and what it means in the marketplace. The first thing I'd say is what you're referring to, which is what we call omni channel commerce. If you went back to ancient history, which was probably in payments three years ago. To be honest, doing back in ancient history, you would say, well, there's an e commerce business meaning conducted from your ipad or iphone online and then there's a physical world business. Now we call that Omni channel, meaning there is no difference between online acceptance of cards and the physical world. So one of the things that's done is it's made every retailer, for example, uh pretty much indifferent as to whether something comes into their network through us online or offline. You have to be good at everything or you're gonna find yourself in a very difficult place and something like a pandemic, I would say that's trend. Number one, trend number two is the rise of alternative means of distribution. So for example, think about our business with quick service restaurants, burger king is a great example. Um in the first quarter of 2000 and 20 before the pandemic really hit, we probably did something like 10,000 remote deliveries, meaning you ordered your hamburger or your taco from your phone, pay with your face, your thumb And we had to deliver to you through door dash or you went through the drive through and they handed it to you for the entire year of calendar 20 because of the pandemic. We actually did 100 million of those transactions for $1.5 billion 21 we've done 70 million or run rate of 280 million. So those kind of share shifts where people are doing things remotely an omni channel land and people are doing things remotely in the context of safer commerce, which is my burger example have really accelerated that trend, enthusiasts continued into 2021 I just don't think we're going to go backwards. It's so convenient, so easy for people to do and obviously saved. I think we're just going to continue to apply ahead. Where do you see the real growth and the engine for new opportunities? You mentioned a moment ago about burger king and all the business you're doing there. I know you service a lot of restaurants and retailers and health care providers. But where do you see the real growth prospects going forward? Well, let's start with health care. So as you mentioned rightly, we have a very sizable business called Advance MD in Healthcare. We actually provide the software in the payments that power. 33,000 small doctor's offices here in the United States. And you would be surprised to know that the numbers are kind of staggering that in the first quarter of 2020 we did something like 10,000 Teladoc visits. By the time 2000 and 20 was over, we did 1.5 million Teladoc visits encounter 2020 And now in the first quarter of 21 Tuesday we've done a run rate of two million Teladoc visits. So I don't think we're going to go backwards there. So the state of medicine, especially for small practitioners, has really changed. And now you're getting into the real estate business, you're very close to closing on an acquisition you made called Zygo. What does ego bring to global payments? And how does it work? We're very excited about Zygo. It's our first foray as a principle into real estate technology, primarily what Zygo does use use allows you to pay your H. O. A. Fees, your condo fees online, using your phone, using your ipad, using your laptop, every single amount of money that allows you to submit change orders if something is broken in your residential unit and Diego has 11 million of those here in the United States. Um, it allows you to retrieve your card, allows you to coordinate with the building when rent payments or do so at the end of the day when you think about the confluence of a few things software with digital experiences with payments with safer commerce, who's going to want to walk into the landlord's office and actually write a physical check in a post code and environment. Who's gonna want to go to submit a physical work order when you can do it safely from your cell phone. So I think those trends are really fueling the growth of ego. You've always said that scale is so important in in this business that your urine and that's one of the reasons you've been doing so many acquisitions over the past couple of years. Are you done now? Is the deal making over or more to come look, it's a scale business Technology has always been a scale business. I think it will remain enthusiast, scale business going forward. So we like to do more things like to do more things that incremental margins versus our average margins. So we're really not done yet. So stay tuned. We'll see what happens. But we're very excited about where we're heading. I'd like to get your thoughts, Jeff on Bitcoin. As you know, there's been a lot of talk about this recently. What's your company's policy about Bitcoin? So we've been able to Bitcoin acceptance susie on our gateways. Then you can take at the point of sale since 2016, there really has not been a lot of customer demand at the merchant or consumer level to date. And just imagine asking a grocery retailer who has about a 1% operating margin to take a currency in the form of a virtual coin That is swinging 30 point today when you have a 1% margin. So I think we need to see some stability and some settling out susie before. I think merchants and consumers will start using at the points out. I mean I want to ask you about that because paypal has said that it would accept Bitcoin payments and they deal with a lot of retailers and other merchants. To what extent do you think merchants are prepared and ready to accept Bitcoin payments? Well, I think a small number are prepared today susie, but I don't think they're really ready. I think dealing with the volatility that you've seen is really hard. I would say that at the end of day if you back up for global payments were beneficiaries of innovation ecosystem. So whether it's Paypal is a very good partner of ours or really anybody else, the more innovative people are, the more products that are that we can sell better off global payments is really this is nothing but good news for us. Time will tell whether we reach the point from the stability point of view where you can actually use it effectively at the point of sale. Well when do you expect that your company would be handling a larger volume of Bitcoin payments? How far out is that? Listen I think it's going to be quite a period of time as the recent volatility has shown. I think if facebook has come out with their own stable coin which they called Liberal and I think you know the branding it's something different. I think if you see stable coins or central bank digital currencies as you've seen announcements in china the U. S. The United Kingdom, if those come to market it could be in 2022 will be actually see those at the physical point of sale. I think the quick currencies that have a lot more volatility I think it's going to go well beyond that before they become a routine part of the transaction.