EVERTEC, Inc. (EVTC)

EVERTEC, Inc. is a full-service payment transaction processor and financial technology provider serving Latin America, Puerto Rico and the Caribbean. It offers merchant acquiring, payment processing and business process management services across the payment value chain. It says it is one of the largest merchant acquirers in Latin America by number of transactions (per the September 2022 Nilson Report) and believes it is the largest in the Caribbean. It owns and operates the ATH network, which it believes is one of the leading PIN debit networks in Latin America, and it processes over six billion transactions annually. Neither EVERTEC nor its intermediate holding company conducts operations other than through its ownership of EVERTEC Group.

Its services fall into three areas. Merchant acquiring lets point-of-sale and e-commerce merchants accept debit, credit, prepaid and EBT cards. It includes underwriting, POS device deployment and rental, transaction processing, a payment gateway (Placetopay), settlement, reporting and support, and the business processed over 500 million transactions in 2023. Payment processing serves financial institutions and fintechs with card issuing and acquiring processing, authorization, switching, settlement, ATM and POS management, fraud and risk management, bill payment, ACH, electronic check and EBT solutions, using platforms such as Paystudio. It also includes ATH Movil, a person-to-person and person-to-merchant mobile payment product. Business process management provides core banking, credit, investment, payments, foreign exchange, fund, pension and consortium software, digital onboarding, signature and collection tools, IT outsourcing, network hosting, consulting, item and cash processing, and fulfillment. The company believes it is the only non-bank provider of cash processing services to the U.S. Federal Reserve in the Caribbean. Its segments include Payment Services - Puerto Rico & Caribbean, Latin America Payments and Solutions, Merchant Acquiring, and Business Solutions. In 2023 it acquired Sinqia, a Brazilian provider of financial software to banks, funds, pensions and consortiums, and paySmart, a Brazilian issuer processing and BIN sponsorship provider for prepaid programs.

EVERTEC serves financial institutions, merchants, fintechs, corporations and government agencies in 26 countries. It sells mainly through a proprietary direct sales force, usually under one-to-six-year contracts, and most revenue is recurring. About 35% of 2023 revenue came from Popular, and the master services agreement with Popular, which runs through September 2028, is its most significant client contract. The company cites growth in digital payments, rising non-cash transaction volumes in Latin America, and the outsourcing of technology by financial institutions as key market trends. Its growth strategy centers on cross-selling, winning new customers, expanding in Latin America (including Brazil, Colombia, México and Chile) and developing new products.

The company runs its own scalable, end-to-end technology platforms and says it spent over $333 million on technology over the last five years. It operates from 20 offices, including its headquarters in Puerto Rico. In merchant acquiring, its competitors include Fidelity National Information Services, Fiserv, Global Payments, Elavon, PayPal, Block and some local banks. In payment services, they include Tecnocom, Galileo, Marqeta, Total System Services, Visa, MasterCard, dLocal and others. In business solutions, they include Jack Henry, CGI, Totvs, Stefanini and in-house technology departments. It owns trademarks such as ATH and EVERTEC in several jurisdictions, along with domain names and software licenses.