Global Payments and HSBC Bank plc Form Strategi...

ATLANTA, June 17 /PRNewswire/ --

    Global Payments Inc. (NYSE: GPN), a leading provider of electronic
transaction processing solutions, announced today it has agreed to form a
joint venture with HSBC Bank plc ("HSBC") to provide payment processing
services to merchants in the United Kingdom and Internet merchants globally.
The new company will operate under the name HSBC Merchant Services.


(Logo: http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO )

    HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc (LSE:
HSBA), one of the largest financial services institutions in the world, with
assets of approximately US$2.4 trillion and approximately 10,000 offices in
83 countries and territories, as of December 31, 2007. In the United Kingdom,
HSBC Bank estimates that its merchant acquiring business commands an
approximate 15 percent market share by providing payment card processing
services across 135,000 merchant outlets.


    "We are thrilled that HSBC, one of the world's most respected financial
institutions, has agreed to expand its relationship with Global Payments into
the United Kingdom," said Chairman, President, and Chief Executive Officer of
Global Payments, Paul R. Garcia. "We expect to focus on growing the customer
base by providing an expansive range of card payment solutions. Longer-term,
with the adoption of the Single Euro Payments Area (SEPA) initiatives, we
expect to be in an excellent position to provide seamless acquiring services
to merchants throughout Europe," Garcia continued.


    "The creation of HSBC Merchant Services builds on our partnerships with
Global Payments in Asia and North America," said Group General Manager
Commercial Banking, Alan Keir. "Through the combination of HSBC's extensive
business customer franchise, and Global Payments' experience in transaction
handling, HSBC Merchant Services will offer a compelling proposition," added
Keir.


    "We are pleased to be joining a leading provider of electronic payment
processing solutions. Being a part of a strong company that understands our
business will be welcomed by our merchant customers and provide new
opportunities for our 400 employees," said Head of Card Acquiring for HSBC,
Darren Wilson.


    Under the terms of the agreement, and pending regulatory approvals and
customary closing conditions, Global Payments will pay HSBC US$439 million in
cash to acquire a 51 percent majority ownership in the joint venture. HSBC
will control the remaining 49 percent and will contribute its existing
merchant acquiring business in the United Kingdom to the joint venture. In
addition, the bank has agreed to a ten-year marketing alliance in which HSBC
will refer customers to the joint venture for payment processing services in
the United Kingdom. The transaction is expected to be completed within two
months.


    For the calendar year 2007, HSBC's merchant acquiring business in the
United Kingdom generated revenue of approximately US$229 million (114 million
pounds Sterling). Global Payments expects the transaction to be accretive to
diluted earnings per share in the first year following the close of the
transaction. Global Payments' management will discuss this acquisition during
its fiscal 2008 year-end earnings call in July 2008. Please refer to the
attached fact sheet for further details. The company has also posted a slide
presentation relating to this transaction under the Investor Relations
section of its Web site at www.globalpaymentsinc.com .



    Global Payments Inc. (NYSE:GPN) is a leading provider of electronic
transaction processing services for consumers, merchants, Independent Sales
Organizations (ISOs), financial institutions, government agencies and
multi-national corporations located throughout the United States, Canada,
Latin America, Europe and the Asia-Pacific region. Global Payments offers a
comprehensive line of processing solutions for credit and debit cards,
business-to-business purchasing cards, gift cards, electronic check
conversion and check guarantee, verification and recovery including
electronic check services, as well as terminal management. The company also
provides consumer money transfer services from the United States and Europe
to destinations in Latin America, Morocco, and the Philippines. For more
information about the company and its services, visit
www.globalpaymentsinc.com .



    This announcement by Global Payments' may contain certain forward-looking
statements within the meaning of the "safe-harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Statements that are not historical
facts, including revenue and earnings estimates and management's expectations
regarding future events and developments, are forward-looking statements and
are subject to significant risks and uncertainties. Important factors that
may cause actual events or results to differ materially from those
anticipated by such forward-looking statements include the following:
continued certification by credit card associations, foreign currency risks,
competition and pricing, product demand, market and customer acceptance,
development difficulties, the effect of economic conditions and consumer
spending, security breaches or systems failures, costs of capital, changes in
state, federal or foreign laws and increases in credit card association fees,
utility or system interruptions, the ability to consummate and integrate
acquisitions, and other risks detailed in the Company's SEC filings,
including the most recently filed Form 10-Q or Form 10-K, as applicable. The
Company undertakes no obligation to revise any of these statements to reflect
future circumstances or the occurrence of unanticipated events.


    
                                   Fact Sheet

           Global Payments Inc. and HSBC Bank plc Form Strategic Joint
                        Venture in the United Kingdom


Transaction Summary

    Global Payments Inc. ("Global") has agreed to form a joint venture with
HSBC Bank plc ("HSBC") to provide payment processing services to merchants in
the United Kingdom and Internet merchants globally. The new company will
operate under the name HSBC Merchant Services. As part of the agreement, HSBC
will contribute its existing merchant acquiring operations and merchant base
in the United Kingdom (UK). Global intends to use its existing excess cash, a
new term loan among a syndicate of U.S. banks, and a portion of its existing
U.S. line of credit (as needed) to pay HSBC US$439 million for a 51 percent
stake in the joint venture, with HSBC controlling the remaining 49 percent.
Global will have three seats on the joint venture's Board of Directors and
HSBC will have two seats. In addition, HSBC has agreed to a ten-year
marketing alliance in which the bank will refer customers to the joint
venture for payment processing services. The transaction is subject to
regulatory approvals and customary closing conditions and is expected to be
completed within two months.



HSBC Bank plc Merchant Acquiring

    We believe HSBC's merchant acquiring business in the United Kingdom
commands a market share of approximately 15 percent, providing payment card
processing services to over 135,000 merchant outlets. Its merchant portfolio
includes 20 of the UK FTSE 100 Index companies, as well as smaller merchants
in a variety of vertical markets, such as retail, restaurant, travel and
entertainment, insurance, utilities and business services. The merchant
acquiring division has a staff of 400 employees and is operated by a seasoned
management team. It is anticipated that the majority of these employees will
join Global Payments.



The United Kingdom Payment Card Market

    The United Kingdom is one of the most established credit and debit card
markets in Europe and worldwide. In 2007, approximately 354 billion pounds
was spent on plastic cards -- 221 billion pounds from 4.9 billion debit card
transactions and 133 billion pounds from 1.9 billion credit card
transactions. 42 million, or 84 percent of the adult population, held a debit
card and 31 million, or 62 percent of the adult population, held a credit or
charge card. In all, there were 165 million payment cards in issue -- 72
million debit cards, 67 million credit cards, 6 million charge cards, 20
million ATM-only cards and 0.5 million check guarantee cards. On a payment
card per capita basis, the United Kingdom had 2.4 credit cards per person and
1.6 debit cards per person.


    In the past decade, growth in the United Kingdom card industry has been
fueled by consumers' preference to switch to card payments from the more
traditional payment methods, such as cash and checks. Cash as a proportion of
consumer spending declined from 39 percent in 1996 to 26.5 percent in 2006.
As a result, check usage also declined significantly, from 29 percent of
total consumer spending in 1996 to 16 percent in 2006. This rate of decline
was faster than in the United States, in part due to an increasing number of
United Kingdom merchants electing to no longer accept checks, or placing
heavy restrictions on their usage. In addition to a general shift to
electronic payments, the United Kingdom has experienced strong growth in
Internet transactions. According to APACS, the United Kingdom payments
association, Internet card payments increased nearly four-fold over the last
five years to 34 billion pounds in 2007.



Growth Opportunities

    A strategic joint venture between Global and HSBC has a number of growth
opportunities. The immediate priority will be to implement a number of key
direct sales initiatives, including the targeting of specific merchant
segments, enhancing sales force training, introducing additional sales force
automation tools, and using a more focused sales approach. Additionally, the
joint venture plans to capitalize on the significant investment HSBC has made
in developing a global solution for handling Internet-based transactions. Due
to HSBC's extensive worldwide footprint, the joint venture will have the
capability to provide Internet-based merchant acquiring services in at least
37 countries and 35 currencies.


    Over the long term, the joint venture intends to position itself for
growth throughout Europe with the adoption of the Single Euro Payments Area
(SEPA) initiatives. Many European countries have been restricted to
competition due to proprietary debit schemes. It is expected that those
constraints will be lifted with the adoption of SEPA.


    Other growth opportunities include the introduction of new products and
services, including those that may be common in the United States, such as
online merchant statements, but that are less common throughout Europe.



Competitive Advantages

    In the United Kingdom, the joint venture will primarily compete against
national banks offering merchant acquiring services. As such, among the most
compelling competitive advantages of the joint venture are strong attributes
both parties bring to the joint venture. Global's singular focus and
expertise in electronic transaction processing, the experience and leadership
of Global's executive management team, the combined resources of HSBC and
Global, the value of the HSBC brand and the bank's market position and local
knowledge strategically position the joint venture to effectively compete in
the second largest payments market in the world. Further, the ten-year
marketing alliance agreement will provide the joint venture with merchant
referrals from HSBC's branches and affiliates in the United Kingdom.



Financial Impact

    For the calendar year 2007, HSBC's merchant acquiring business in the
United Kingdom generated revenue of approximately US$229 million (114 million
pounds). Global expects the transaction to be accretive to diluted earnings
per share in the first year following the close of the transaction. Over the
long term, Global anticipates strong revenue growth and earnings accretion
from this transaction as the joint venture further penetrates the United
Kingdom and other countries in Europe. Global Payments' management will
discuss this acquisition during its fiscal 2008 year-end earnings call in
July 2008.



About HSBC Bank plc

    HSBC Bank plc is a wholly-owned subsidiary of HSBC Holdings plc (LSE:
HSBA), one of the largest banking and financial services institutions in the
world, with established businesses in Europe, the Asia-Pacific region, the
Americas, the Middle East and Africa. The HSBC Group services approximately
128 million customers worldwide with 330,000 employees located throughout
10,000 offices in 83 countries and territories. At December 31, 2007, HSBC
Holdings plc held assets of US$2.4 trillion. HSBC Holdings is listed on the
London, Hong Kong, New York, Paris, and Bermuda stock exchanges. Shares of
HSBC Holdings are held by more than 200,000 shareholders in over 100
countries and territories.



About Global Payments Inc.

    Global Payments Inc. (NYSE:GPN) is a leading provider of electronic
transaction processing services for consumers, merchants, Independent Sales
Organizations (ISOs), financial institutions, government agencies, gaming
establishments, and multi-national corporations located throughout the United
States, Canada, Latin America, Europe and the Asia-Pacific region. Global
Payments offers a comprehensive line of processing solutions for credit and
debit cards, business-to-business purchasing cards, gift cards, electronic
check conversion and check guarantee, verification and recovery including
electronic check services, as well as terminal management. The company also
provides consumer money transfer services from the United States and Europe
to destinations in Latin America, Morocco, and the Philippines. For more
information about the company and its services, visit
www.globalpaymentsinc.com .



    This fact sheet by Global Payments' may contain certain forward-looking
statements within the meaning of the "safe-harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Statements that are not historical
facts, including revenue and earnings estimates and management's expectations
regarding future events and developments, are forward-looking statements and
are subject to significant risks and uncertainties. Important factors that
may cause actual events or results to differ materially from those
anticipated by such forward-looking statements include the following:
continued certification by credit card associations, foreign currency risks,
competition and pricing, product demand, market and customer acceptance,
development difficulties, the effect of economic conditions and consumer
spending, security breaches or systems failures, costs of capital, changes in
state, federal or foreign laws and increases in credit card association fees,
utility or system interruptions, the ability to consummate and integrate
acquisitions, and other risks detailed in the Company's SEC filings,
including the most recently filed Form 10-Q or Form 10-K, as applicable. The
Company undertakes no obligation to revise any of these statements to reflect
future circumstances or the occurrence of unanticipated events.



    Sources: APACS, The UK Payments Association, available from
http://www.apacs.org.uk/index.html; Internet; accessed 09 May 2008. "The rise
of the plastic generation." www.vrlknowledgebank.com .


    
    Investor Relations Contact: Jane M. Elliott
                                [phone] Voice
                                [e-mail]

    Media Relations Contact:    Phyllis McNeill
                                [phone] Voice
                                [e-mail]


    Web site: http://www.globalpaymentsinc.com
              http://www.apacs.org.uk/index.html
              http://www.vrlknowledgebank.com