First, Global Payments bought Heartland Payment Systems for $4.3 billion (details) in 2016. Then, Vantiv bought WorldPay (details) for $10.4 billion last year, and now in 2019 we are seeing the third mega payments acquisition.

2019 started with a bang – Fiserv acquired FirstData for $22 billion and shortly thereafter Fidelity National Services acquired the newly formed WorldPay (the resulting entity of Vantiv’s acquisition of WorldPay) for $34 billion.

The latest of 2019’s monster mergers is Global Payments merger with TSYS – a $21.5 billion deal – bringing 2019’s total to $77.5 billion. That’s just $2 billion shy of the entire GDP of Guatemala.

These numbers are crazy. What does it all mean?

I can’t speak to the financial statements, but I can speak to what it means for the bag-carrying sales reps that work for these companies.

Project the future by looking at the past.

When Global bought Heartland, there were changes felt in many facets of the sales organization. Culture changed, but that is a given in any acquisition. People left, people stayed.

Over time though, Global’s business practices of fee increases and additions continued to hemorrhage their client portfolio despite increasing its profitability. Many of the sales representatives that attached their name to Heartland continued to leave for new opportunities, citing frustration with the amount of time spent on retention of existing clients instead of hunting new ones. Many more stayed though, enjoying the new profitability of their accounts.

Much of that is my opinion laced with anecdotes from people with whom I’ve spoken.

Here’s a cold hard fact: Global’s acquisition of Heartland created internal competition for accounts. Heartland reps were warned against signing Global’s customers.

When WorldPay was acquired by Vantiv, hundreds of salespeople were fired with very little notice and the shareholder’s rejoiced in “cost synergies” that could be passed to the bottom line.

The recent mergers are too new to look at the impact, but when a company’s grade is based entirely on earnings, it’s easy to expect more of the same.

You’re selling to a smaller pool of opportunity – limited on who you can sell.

If you were an outside sales representative for WorldPay, you could sign clients processing with anyone but WorldPay. As soon as the Vantiv acquisition took place, now those Vantiv portfolio clients are off limits.

If you are an outside sales representative for Heartland, you can’t sign OpenEdge or other Global clients. Now, with the acquisition of TSYS, does that mean that TSYS deals are also off limits? How far does it go?

But I have more arrows in my quiver right?

Kind of. Look at Heartland. Heartland has owned PC America and Digital Dining for quite some time. They acquired MobileBytes. These acquisitions created an easier path to acquiring new clients due to an easy integration.

The Global acquisition didn’t open up new channels for Heartland reps to write new business. In fact, Global’s business model is deeply ingrained in ISVs and VARs, so if anything, these resellers of Global’s processing services are more protected than before because they’ve eliminated over 1,000 Heartland sales reps as competition.

This new acquisition of TSYS isn’t going to automatically open up TSYS’s direct integrations just like TSYS’s acquisition of Cayan didn’t offer this same opportunity to TSYS reps.

Look to the goals of your (new) organization.

Every organization has a goal to be profitable. For Global, WorldPay, Vantiv – this amateur analyst says that their actions have proven that profit at all costs is the business model. Heartland was a profitable company, but not as profitable as it could have been without fee increases. That was changed, so expect future acquisition targets to have changes as well.

Vantiv’s business model was ISV and VAR partnership. It worked. Really. Really. Well. They grew like wildfire by systematically integrating to software systems and giving enough profit split to the software owner to make sure they block all competitors. If that’s Vantiv’s model, and they acquire WorldPay, expect that to influence WorldPay’s business practices significantly.

What about my clients? How are they impacted?

If you’re an end-user of services from these companies, that’s an entirely different story. Acquisitions fragment the service model and for most of these companies, service is expensive – one of the many line items they are trying to reduce on their P&L.

Think about the systems integration that would have to take place in order to accomplish a billion dollar merger… now imagine a $20 billion or $30 billion merger. Systems are going to flex and systems are going to break. These systems aren’t cheap and mergers only happen if there’s a promise of increased financial return.

Companies will want to recoup their investment as soon as possible.

Cost synergies are a reduction in operating costs during an acquisition or merger. Company A has a service center in California and Company B has a service center in Oregon. Merge the two and boom, you have cost synergy. You probably don’t have a service center, but you’ve definitely saved money.

When cost synergies are created by getting rid of sales teams, or when inside sales is elevated above outside sales as a cheaper alternative to acquire new clients, the face of your organization leaves. Yes, that’s you by the way.

When representatives go away, the service model that relied upon a local representative begins to erode.

Mergers are tricky. Acquisitions are complicated. The ramifications of these acquisitions could be tremendous. They could rock the industry. Stop worrying about the industry. It’s growing and it’s going to be just fine.

If you’re a sales representative for TSYS, Global, Heartland, FirstData, WorldPay, Vantiv… stop trying to predict the market’s reaction and look at how it’s going to impact you.

Yes, you.