Evertec Inc., a significant acquirer processor and card issuer in Latin America and the Caribbean region for 25 years, is casting part of its business as that market's Square Inc. and looking to supercharge its payments business after its April 12 initial public offering.
"It's a great day for us," Evertec CEO Peter Harrington said the day the San Juan, Puerto Rico-based company began trading its shares on the New York Stock Exchange under the ticker EVTC.
"The major advantage for us is that we truly become a stand-alone company and can focus on continuing to expand our market," Harrington says.
Evertec sometimes uses the nickname "Square of Latin America" as a reference to its EverPay mobile card reader, which it sells in 19 countries.
The EverPay reader, like Square, allows merchants to accept card payments with a smartphone or other mobile device. Unlike Square, it accepts EMV chip-and-PIN card payments.
Whereas Square and rivals such as PayPal, Groupon and Intuit sell their readers to micro-merchants whose size deterred them from accepting credit and debit cards, Evertec is focused on larger merchants.
"There are large companies in these emerging markets that are not accepting card payments because there are not as many [point of sale] terminals and land lines to set them up," Harrington says.
That set of circumstances leads to "considerable adoption of mobile pay" in those markets, he adds. With that in mind, Evertec also plans to expand its person-to-person mobile payment platform, Harrington says.
Evertec earlier operated as an independent unit of Popular Inc., a large financial institution in the Caribbean, until a merger in 2010 resulted in Apollo Global Management LLC acquiring a 51% majority interest in Evertec. That merger set the stage for Evertec to become its own company, Harrington says.
Evertec's attention now turns to a market expansion that most likely will target South America, rather than North America, Harrington says.
"We have a good footprint in this market, and we understand the language and the culture," Harrington says. "We are now focused on the Colombian market and would be moving south from there."
The company intends to "move forward on the payments side" of its business because it offers all major services — POS terminals, ATM services, acquiring, card issuing, payment portals and networks, Automated Clearing House and mobile payments, Harrington says.
Because Evertec operates ATH, the dominant debit network in the region, the company already has relationships with every bank in its marketplace, Harrington says.
"We can almost create a closed-loop system, setting up P2P from one bank customer to another without involving each bank," he adds.
Because Puerto Rico is a U.S. territory, Evertec has to follow Durbin Amendment regulations regarding interchange and debit transaction routing, Harrington says.
After its first day on NASDAQ, Evertec's share price closed at $20.38, after a high of $21.99 and a low of $20.16 per share. The company processes more than 1.8 billion transactions annually and manages an electronic payment network of more than 4,100 ATMs and 104,000 POS terminals, according to the company's S-1 registration for its IPO.