Visa (NYSE:V) and MasterCard (NYSE:MA) are best known for their trade names that banks and other financial institutions brand for their own credit card usage. However, they also run proprietary transaction units that process the billions of financial payments each year. Global Payments (NYSE:GPN) is a pure-play transaction processor that is increasingly operating on a global scale.

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Third-Quarter Highlights
GPN's revenues increased 10.9% to a hair under $400 million as international merchant services sales shot ahead 24% to account for 26.5% of the total top line. Management cited strong trends in Asia where it expects full-year sales to grow in the mid-teens. North American sales improved a respectable 7% on higher ticket amounts in the U.S. and particular strength in Canada where revenue grew 13% to $77.1 million, or 19.3% of total sales. A weak dollar boosted non-U.S. results.

Profitability followed sales trends, with international the strongest, posting 39% operating income growth to account for the same proportion of total profits. North America reported 5% operating growth to $60.9 million. Total operating profit came in at $73.8 million and grew 18% from last year's third quarter. Operating margins improved to 18.5% of sales and a lower tax rate helped push net income ahead 38% to $47.7 million, or an impressive 12% of sales. Higher shares outstanding sent earnings per share growth down slightly, though it was still stellar at 35% to 58 cents per diluted share. This came in ahead of analyst projections.

Management expects full-year revenues to increase 10-11% to between $1,615 million and $1,625 million, and for diluted earnings to grow between 19% and 21% to between $2.49 and $2.54 per share. (Learn about the controversies surrounding companies commenting on their forward-looking expectations in Can Earnings Guidance Accurately Predict The Future?)

Bottom Line
The payment processing industry is highly lucrative and requires minimal capital expenditures to maintain and grow. Global Payments, along with Fundtech (Nasdaq:FNDT), is growing most rapidly overseas and should continue to do so. Shareholders can count on organic growth at Global Payments as well as acquisitions to boost the overall expansion profile.

Both above players are also not overly large in terms of market capitalization and could be bought out by a strategic or financial entity. In recent years First Data was acquired by private equity firms, and Metavante was folded into Fidelity National Information Services (NYSE:FIS).

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