Global Payments’ Diabolical Plan: Silence Heartland, Bail Out Mercury, Grow Portfolio
You may have read about a deal Global Payments struck to purchase competitor Heartland Payment Systems, but there's more than meets the eye. Read between the lines of Global Payments’ motives to acquire Heartland and you’ll see something more scandalous than a simple desire to grow its portfolio.
Allow me to provide an overview of the lay of the land for those not too familiar with the relationships between these companies.
Global Payments is a credit card processor with a relatively unimpressive reputation among businesses and independent sales organizations (ISO) that is looking to expand its client base through acquisitions.
Mercury Payment Systems is a large and quickly growing ISO that uses Global Payments to process its transactions. Mercury was acquired by Vantiv last year, but the recent Mercury processing statements we've reviewed indicate it's still running transactions through Global Payments. Mercury is well-known within the processing industry for eliminating a business’s competitive choice through partnerships it forges with POS developers and then slipping hidden fees into its clients’ charges in the form of excessive assessments.
Heartland Payment Systems is a well-respected credit card processor with a solid reputation among businesses and ISOs that is currently suing Mercury Payment Systems, alleging false advertising, unfair competition, and more. The basis for the suit is the excessive assessment charges I mentioned in the preceding paragraph.
Now that you have an overview of the players involved, here’s a closer look at how the pieces fit together.
Global Payments handles the transaction volume for Mercury Payments, which generates significant revenue. Mercury Payments is being sued by Heartland Payments, which has damaged Mercury’s reputation and has had a negative impact on its transaction volume and in turn the money Global earns on the volume.
Global Payments claims it is looking to expand its portfolio through acquisition but coincidentally purchases the processor that is currently engaged in a lawsuit that damages its prized ISO’s reputation and negatively impacts its bottom line.
Heartland’s CEO, Bob Carr, has long been an advocate for transparency in the processing industry, and his strength of character is pretty evident from reading his personal blog. This makes it that much more intriguing that Bob is selling Heartland Payments to a company with strong ties to another that he’s currently suing for deceptive business practices.
Is this simply selling, or selling out?