Global Payments (GPN) is one of the largest merchant processors in the world, and due to a suspected data breach on Friday the stock dropped about 9%. Over the weekend Visa has said that they are removing their seal of approval which could make the small businesses that make up Global Payments client base, leery of doing business with them. According to the WSJ (GPN) can still process Visa transactions so the ramifications don’t appear to be catastrophic quite yet. This will be an interesting situation to watch as at T&T Capital Management we find the merchant processor business to be quite attractive.
The industry is still in the earlier growth stages in Asia but it has been difficult to get into these stocks at a reasonable price. I think it is fairly likely that Global Payments should be able to mend the relationship with Visa over time as it is not in either company’s best interests to not work together. If the stock were to come down a lot more it could be interesting, but I need to do more research to get fully comfortable.