Global Payments is buying TSYS for $21.5 billion, bringing Global Payments’ annual transaction volume to $50 billion across the world. The deal will vertically integrate many of the steps required in payments processing by combining Global Payments’ core competency of helping merchants process card, mobile and online payments with TSYS’s capability of helping card issuers and financial institutions like banks and credit unions accept and clear payments.
The all-stock deal is the latest consolidation in the fintech sector, particularly in payments. Earlier this year two giant fintech deals occured: FIS purchased Worldpay for $35 billion and Fiserv purchased First Data for $22 billion.
Expect M&A activity to continue. “Look for us to do more technology deals,” says Global Payments chief executive, Jeff Sloan.
Acquiring market share is one of the quickest ways to grow in this fast-moving, innovative sector. Leapfrogging the development cycle and purchasing an already proven system is essential to remain relevant with customers and gaining scale allows companies to edge out the competition as more and more consumers and businesses turn to digital payments. As the gap between finance and technology becomes blurred, we can expect more deals in both software and fintech to continue.