Global Payments (GPN) Inks JV to Serve Small & Mid-Size Firms
Global Payments Inc. GPN recently formed a joint venture with the German bank, Commerzbank, in a bid to benefit the nationwide small and medium-sized business clients of the bank with enhanced digital payment services. The organization formed as a result of the joint venture will be named Commerz Globalpay GmbH and is likely to commence operations in the first half of 2024, upon receiving a nod from the concerned supervisory and antitrust authorities.
GPN will hold a 51% share while Commerzbank will hold the remaining 49% share in the joint venture company based in Frankfurt am Main, Germany. The partnership will leverage the strength of the commerce enablement solutions and payment offerings suite of Global Payments and the extensive knowledge and solid customer relationships earned by Commerzbank across the small and medium-sized merchant market of Germany.
This, in turn, is expected to equip the joint venture company to offer an innovative omnichannel payment and software solutions portfolio, as well as an opportunity for merchants of all sizes to accept various forms of payments across any channel. The solutions suite will be powered by the smartphone-based payment applications of Global Payments, which imparts merchants the ability to accept mobile payments devoid of the need for a separate card reader, card terminals and e-commerce or mobile payment solutions.
In addition to this, merchants can also grasp the benefits of cloud-based point-of-sale software, customer loyalty programs, and an analytics and customer engagement platform provided by Commerz Globalpay GmbH.
The latest joint venture seems to be a win-win situation for both parties involved. GPN's management views this joint venture as a perfect opportunity for expanding the reach of its payment offerings and commerce enablement solutions across the small and medium-sized merchant industry of Germany, and subsequently, boosting its nationwide presence. Being a partner to roughly 26,000 corporate client groups and with a private and small-business customer base of around 11 million across Germany, Commerzbank seems to be the apt partner to complement Global Payments’ endeavor.
The increased utilization of solutions suite by German merchants is expected to fetch higher revenues to Global Payments. Joint ventures, acquisitions and alliances remain a means for GPN to bolster its customer base, enter new markets, boost business scale and sustain a competitive edge in the payments technology industry.
Taking the help of the payment technology company is expected to benefit Commerzbank merchant clients in the form of boosting their business growth prospects.
Shares of Global Payments have gained 22.7% in the past year compared with the industry’s 13.4% growth. GPN currently carries a Zacks Rank #3 (Hold).
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Stocks to Consider
Some better-ranked stocks in the Business Services space are Green Dot Corporation GDOT, FirstCash Holdings, Inc. FCFS and Omnicom Group Inc. OMC. While Green Dot sports a Zacks Rank #1 (Strong Buy) at present, FirstCash and Omnicom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Green Dot surpassed estimates in three of the last four quarters and missed the mark once, the average surprise being 15.91%. The Zacks Consensus Estimate for GDOT’s 2024 earnings indicates 12.7% growth while the consensus mark for revenues suggests a 1.5% rise from their corresponding 2023 estimate. GDOT boasts an impressive Value Score of A.
FirstCash’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.86%. The Zacks Consensus Estimate for FCFS’s 2024 earnings indicates 21.6% growth from the 2023 estimate. The consensus mark for revenues implies 7.8% growth from the 2023 estimate. FCFS boasts an impressive VGM Score of A.
The bottom line of Omnicom outpaced estimates in each of the trailing four quarters, the average surprise being 5.47%. The Zacks Consensus Estimate for OMC’s 2024 earnings indicates 4.6% growth while the consensus mark for revenues suggests a 4.7% rise from their corresponding 2023 estimate. The consensus mark for OMC’s 2024 earnings has moved 0.7% north in the past 30 days.
Shares of FirstCash and Omnicom have gained 21.6% and 6%, respectively, in the past year. However, the Green Dot stock has declined 47.7% in the same time frame.
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