Summary
Global Payments Inc. (GPN) announced on June 18, 2010, that Canadian Imperial Bank of Commerce (CIBC) will not renew its Visa sponsorship agreement with the company. This agreement is set to terminate in March 2011 after its 10-year term. In response to this development and as part of its strategic plan for Canadian operations, Global Payments has filed an application with Canadian regulatory authorities to establish a loan company in Canada. This new entity will allow the company to directly process Visa transactions, thereby eliminating the need for a third-party bank sponsorship and ensuring continuity of services for its Canadian clients.
Key Highlights
- 1Termination of Visa sponsorship agreement with CIBC scheduled for March 2011.
- 2The agreement was for a 10-year term and will not be renewed by CIBC.
- 3Global Payments is proactively addressing the termination by applying to form a loan company in Canada.
- 4The new loan company will enable direct processing of Visa transactions in Canada.
- 5This strategic move aims to maintain operational continuity and independence in the Canadian market.
- 6The Chief Financial Officer, David E. Mangum, signed the report, indicating financial oversight of the event.
Frequently Asked Questions
The primary reason for this filing is to report that Global Payments Inc. was notified by CIBC that their Visa sponsorship agreement will not be renewed and will terminate in March 2011.
Global Payments is applying to form its own loan company in Canada. This will allow the company to directly process Visa transactions without relying on a third-party bank sponsor.
The agreement is set to terminate at the end of its 10-year term in March 2011.
The company appears to be proactively managing this change by seeking regulatory approval for its own loan company, which should enable a smooth transition and continued direct processing of Visa transactions in Canada.