EVERTEC, Inc. (‘EVERTEC’) operates as a full-service transaction-processing business and financial technology provider in Latin America, Puerto Rico and the Caribbean, providing a broad range of merchant acquiring, payment services and business solutions.
EVERTEC Inc.’s subsidiaries include Holdings, EVERTEC Group; EVERTEC Dominicana, SAS; Evertec Chile Holdings SpA; Evertec Chile SpA; Evertec Chile Global SpA; Evertec Chile Servicios Profesionales SpA; Tecnopago España SL; Paytrue S.A.; Caleid...
EVERTEC, Inc. (‘EVERTEC’) operates as a full-service transaction-processing business and financial technology provider in Latin America, Puerto Rico and the Caribbean, providing a broad range of merchant acquiring, payment services and business solutions.
EVERTEC Inc.’s subsidiaries include Holdings, EVERTEC Group; EVERTEC Dominicana, SAS; Evertec Chile Holdings SpA; Evertec Chile SpA; Evertec Chile Global SpA; Evertec Chile Servicios Profesionales SpA; Tecnopago España SL; Paytrue S.A.; Caleidon, S.A.; Evertec Brasil Solutions Informática S.A. (‘EVERTEC BR’); EVERTEC Panamá, S.A.; EVERTEC Costa Rica, S.A. (‘EVERTEC CR’); Zunify Payments Ltda; EVERTEC Guatemala, S.A.; Evertec Colombia, SAS; EVERTEC USA, LLC; OPG Technology Corp.; Evertec Placetopay, SAS (‘PlacetoPay’); BBR Chile, SpA, and BBR Perú, S.A.C. (collectively ‘BBR’); Paysmart Pagamentos Eletrônicos Ltda, Issuer Holding Ltda., and Issuer Instituição de Pagamentos Ltda. (collectively ‘paySmart’); EVERTEC México Servicios de Procesamiento, S.A. de C.V.; Sinqia S.A.; Torq. Inovação Digital Ltda.; Sinqia Tecnologia Ltda.; Homie do Brasil Informática S.A.; Rosk Software S.A.; Lote 45 Participações S.A.; and Compliasset S.A. (collectively ‘Sinqia’); Grandata, Inc.; Grandata Mexico, S.A. de C.V.; Grandata USA, Inc.; and Big Data Analytics SA (collectively ‘Grandata’); and Nubity S.R.L.; Nubity Inc.; and Nubity Cloud, S.A.P.I. de C.V. (collectively ‘Nubity’).
The company serves 26 countries out of 24 offices, including its headquarters in Puerto Rico. The company owns and operates the ATH network, which is one of the leading debit networks in Latin America. It processes over ten billion transactions annually through a system of electronic payment networks in Puerto Rico and Latin America, and a comprehensive suite of services for core banking, cash processing, fulfillment in Puerto Rico, and a ‘one-stop shop’ access to products for the financial sector in Latin America, which includes solutions, such as core banking, investments, asset management, pension funds, and consortium. Additionally, it offers managed services, managed security services, and payment transactions fraud monitoring to all the regions it serves. The company serves a diversified customer base of leading financial institutions, merchants, corporations, and government agencies with ‘mission-critical’ technology solutions that enable them to issue, process, and accept transactions securely.
The company’s broad suite of services spans the entire payment processing value chain and includes a range of front-end customer-facing solutions, such as the electronic capture and authorization of transactions at the point-of-sale for both card-present transactions and card-not-present transactions, as well as back-end support services, such as the clearing and settlement of transactions and account reconciliation for card issuers. These include: merchant acquiring services, which enable point-of-sale (‘POS’) and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (‘EBT’) cards; (ii) payment processing services, which enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines (‘ATM’), and EBT card programs; and business process management solutions, which provide ‘mission-critical’ technology solutions, such as core bank processing, as well as IT outsourcing and cash management services to financial institutions, corporations, and governments. The company provides these services through scalable, end-to-end technology platforms that it manages and operates in-house.
The company sells and distributes its services primarily through a proprietary direct sales force with established customer relationships. The company’s revenue is predominantly recurring in nature because of the mission-critical and embedded nature of the services it provides. In addition, it enters into multi-year contracts with its customers.
For the year ended December 31, 2024, approximately 31% of the company’s revenue was generated from its relationship with Popular. The revenue concentration with Popular makes its MSA with them its most significant client contract.
Recent Acquisitions
In October 2024, the company signed and closed an agreement to acquire 100% of the share capital of Grandata, Inc. (‘Grandata’). Grandata is a data analytics company operating in Mexico that specializes in leveraging behavioral data to provide credit risk insights, with a focus on underbanked populations.
In November 2024, the company signed and closed an agreement to acquire 100% of the share capital of Nubity, Inc. (‘Nubity’). Nubity is a cloud services provider based in Mexico, specializing in AWS cloud infrastructure management, DevOps, and cloud-native application solutions for clients across Latin America.
The company owns and operates the ATH network, which is one of the leading debit networks in Latin America. According to management’s estimates, ATH branded products are the most frequently used electronic method of payment in Puerto Rico. The company owns Sinqia, which is one of the leading providers of technology for financial institutions in Brazil. The company’s scale and customer base of top-tier financial institutions and government entities ensure it is the leading card issuer and core bank processor in the Caribbean and the only non-bank provider of cash processing services to the U.S. Federal Reserve in the Caribbean.
The company has built a strong and long-standing portfolio of financial institution, merchant, fintech, corporate, and government customers across Latin America and the Caribbean, which provides it with a reliable, recurring revenue base and powerful references that have helped it expand into new businesses, new channels, and geographic markets. Most of the revenue generated from each of the company’s segments, Payment Services - Puerto Rico & Caribbean, Latin America Payments and Solutions, Merchant Acquiring segments, as well as certain business lines representing the majority of its Business Solutions, are recurring in nature. The company receives recurring revenues from services based on its customers’ ongoing daily commercial activity, such as hosting accounts and information on its servers, processing financial products (credits, investments, foreign exchange, mutual funds, consortium), and processing everyday payments at grocery stores, gas stations, and similar establishments. It generally provides these services under one to five-year contracts, often with automatic renewals. The company also provides a few project-based services that generate non-recurring revenues in its Business Solutions segment and its Latin America Payments and Solutions segment, such as IT consulting for a specific project or integration or one-time license sales. Additionally, it provides a number of critical payment services, core banking services, managed services, and managed security services to Popular as part of the A&R MSA through September 2028, and benefits from the bank’s distribution network and continued support.
The company’s diversified business model is supported by its scalable, end-to-end technology platforms that allow it to provide a broad range of transaction-processing services and develop and deploy technology solutions for its customers.
Segments
The company has four operating and reportable segments: Payment Services - Puerto Rico & Caribbean, Latin America Payments and Solutions, Merchant Acquiring, and Business Solutions.
The Payment Services - Puerto Rico & Caribbean segment revenues consist of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services, such as authorization, processing, management, and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement, and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses, and financial institutions), ATH Movil (person-to-person), and ATH Business (person-to-merchant) digital transactions and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file.
The Latin America Payments and Solutions segment payment revenues consist of revenues related to providing access to the ATH network of ATMs and other card networks to financial institutions, including related services, such as authorization, processing, management, and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement, and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses, and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from transaction switching, processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services. Solutions revenues consist of licensing, support, and maintenance (‘subscription’), implementation, and customization of software used to provide financial products in areas, such as core banking, credit, investments, payments, foreign exchange, mutual funds, pension funds, and consortium, in addition to software used to execute processes, such as digital onboarding, digital signature, and digital collection; and outsourcing of mission-critical IT services. Revenues are based on monthly fixed fees and, in several cases, variable fees based on usage.
The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees, and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit card associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value.
The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas, such as core bank processing, network hosting, managed services, and managed security services, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e., savings or checking accounts, loans, etc.), server capacity usage, or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors, such as the number of accounts processed. In addition, the company is a reseller of hardware and software products, and these resale transactions are generally non-recurring.
Growth Strategy
The company’s key strategies are to continue cross-sales to existing customers; leverage its franchise to attract new customers in the markets it currently serves; expand in the Latin America region; and develop new products and services.
Business
The company offers its customers end-to-end products and solutions across the transaction-processing value chain from a single source across numerous channels and geographic markets, as further described below.
Payment Services
The company’s merchant acquiring business provides services to merchants that allow them to accept electronic methods of payment, such as debit, credit, prepaid, and EBT cards carrying the ATH, Visa, MasterCard, Discover, and American Express brands. The company offers a full suite of merchant acquiring services that includes, but is not limited to, the underwriting of each merchant’s contract, the deployment and rental of POS devices and other equipment necessary to capture merchant transactions, the processing of transactions at the point-of-sale, processing of transactions digitally through the company’s online payment gateway, the settlement of funds with the participating financial institution, detailed sales reports, and customer support. The company also offers integrated and semi-integrated payment solutions to its merchants, which either connect to or convert their existing cash registers into points-of-sale that allow them to capture payment transactions using EVERTEC rails, consolidating payment transactions in a single device.
The company provides financial institutions and fintechs with processing, network, and financial technology solutions, and it is the largest card processor and card network service provider in the Caribbean. The company’s main service offerings include authorization, switching, settlement, issuer credit and debit card processing, acquiring processing, and management and monitoring of ATMs and POS. At the point-of-sale, the company sells transaction-processing technology solutions, similar to the services in its merchant acquiring business, to other merchant acquirers enabling them to service their own merchant customers. Additionally, through the company’s payment gateway, it allows merchants to capture and process digital transactions. The company also offers terminal driving solutions to merchants, merchant acquirers (including the company’s merchant acquiring business), and financial institutions, which provide the technology to securely operate, manage, and monitor POS terminals and ATMs. The company also rents POS devices to financial institution customers who seek to deploy them across their own businesses. For the company’s processing services, revenues are primarily driven by the number of transactions processed and the number of accounts on file/system (card accounts in the case of issuers, merchant accounts in the case of acquirers). These services provide the company’s clients with the technology necessary to facilitate the processing and routing of payments across the transaction-processing value chain. The company also provides value-adding services for payment transactions, such as fraud monitoring, management, and control.
To enable financial institutions, governments, and other businesses to issue and operate a range of payment products and services, the company offers an array of card processing and other payment technology services, such as bill payment systems and EBT solutions. Financial institutions and certain retailers outsource to the company certain card processing services, such as card issuance, processing card applications, cardholder account maintenance, transaction authorization and posting, high-volume payment processing, fraud and risk management services, and settlement. The company’s payment products include electronic check processing, automated clearing house (‘ACH’), lockbox, interactive voice response, and web-based payments through personalized websites, among others.
To connect the merchants to card issuers, the company owns and operates the ATH network, which is one of the leading PIN debit networks in Latin America. The ATH network connects the merchant or merchant acquirer to the card issuer and enables transactions to be routed or ‘switched’ across the transaction-processing value chain. The ATH network offers the technology, communications standards, rules and procedures, security and encryption, funds settlement, and common branding that allow consumers, merchants, merchant acquirers, ATMs, card issuer processors, and card issuers to conduct commerce seamlessly, across a variety of channels, similar to the services provided by Visa and MasterCard. The company also owns and operates ATH Movil and ATH Business, which is an ATH network product that allows individuals to transfer money instantly to other individuals and merchants using only their phone number, and transfer money between an individual’s registered cards. ATH Business enables businesses, through the download of the application, to accept payments instantly for their services or products from individuals with ATH Movil in real-time and to donate to non-profit organizations.
The company’s EBT application allows certain agencies to deliver government benefits to participants through a magnetic card system in Puerto Rico.
Business Solutions
The company serves its financial institutions, corporate, and government customers with a wide suite of business process management solutions, some of which are used to provide financial products in areas, such as core banking, credit, investments, payments, foreign exchange, mutual funds, pension funds, and consortium, in addition to software used to execute processes, such as digital onboarding, digital signature, and digital collection, as well as network hosting and management, IT consulting, business process outsourcing, item and cash processing, and fulfillment. Additionally, the company is the only non-bank provider of cash processing services to the U.S. Federal Reserve in the Caribbean, as well as the leading provider of a ‘one-stop shop’ set of products for the financial sector in Brazil.
Competition
In payment services, the company competes with several other third-party card processors, debit networks, and financial technology providers, including Tecnocom Telecomunicaciones y Energía, S.A., Galileo Financial Technologies, LLC, Marqeta, Inc., Fidelity National Information Services, Inc., Fiserv, Inc., Total System Services, Inc., MasterCard, Inc., Visa, Inc., American Express, Discover, Global Payments, Inc., dLocal Corp. LLP, Rappi Inc., and PayPal Holdings, Inc.
In merchant acquiring, the company competes with several other service providers and financial institutions that are either in the company’s markets or represented through Independent Sales Organizations (‘ISO’), including Fidelity National Information Services, Inc., Fiserv, Inc., Global Payments, Inc., Elavon, Inc., PayPal Holdings, Inc., Block, Inc., Zelle, and some local banks.
In business solutions, the company’s main competition includes internal technology departments within financial institutions, retailers, data processing or software development departments of large companies, large technology and consulting companies, and/or financial technology providers, such as Fidelity National Information Services, Inc., Jack Henry & Associates, Inc., CGI Inc., HCL Technologies Limited, and Fiserv, Inc., Totvs S.A., and Stefanini S.A.
Intellectual Property
The company owns numerous registrations for several trademarks in different jurisdictions, pursues the registration of domain names for websites that it uses and that it considers material to the marketing of its products, including the evertecinc.com domain, and owns or has licenses to use certain software and technology, which are critical to its business and future success. For example, the company owns the ATH and EVERTEC trademarks in several jurisdictions, which are associated by the public, financial institutions, and merchants with high quality and reliable electronic commerce, payments, and debit network solutions and services.
Government Regulation and Payment Network Rules
As a technology service provider to financial institutions, the company is also subject to regulatory oversight and examination by the Federal Financial Institutions Examination Council (the ‘FFIEC’), an interagency body of federal financial regulators that includes the Board of Governors of the Federal Reserve System (known as the Federal Reserve Board).
The Consumer Financial Protection Bureau (the ‘CFPB’) has broad supervisory, enforcement, and rulemaking authority over consumer financial products and services (including many offered by the company and by the company’s clients) and certain bank and non-bank providers of such products and services.
The company is subject to the supervision, enforcement, and rulemaking authority of the CFPB as a nonbank and as a service provider to insured depository institutions with $10 billion or more in total consolidated assets and to larger participants in markets for consumer financial products and services.
The company’s services are also subject to a broad range of complex federal, state, and foreign regulations, including privacy laws, international trade regulations, anti-money laundering laws, anti-trust and competition laws, the U.S. Internal Revenue Code, the PR Code, the Employee Retirement Income Security Act, the Health Insurance Portability and Accountability Act, and other laws and regulations.
The company and its financial institution clients are required to comply with various U.S. state, federal, and foreign privacy laws and regulations, including those imposed under the Gramm-Leach-Bliley Act of 1999, which applies directly to a broad range of financial institutions and to companies that provide services to financial institutions.
Specifically, the company’s services must adhere to the requirements of the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001 (collectively, the ‘BSA’), regarding processing and facilitation of financial transactions, as well as other state, local, and foreign laws relating to money laundering. Furthermore, as a data processing company that provides services to foreign parties and facilitates financial transactions between foreign parties, the company is obligated to screen transactions for compliance with the sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’).
All persons engaged in commerce, including, but not limited to, the company and its merchant and financial institution customers, are subject to Section 5 of the Federal Trade Commission Act prohibiting Unfair or Deceptive Acts or Practices (‘UDAP’).
The company is required to comply with various federal, local, and foreign competition and anti-trust laws, including the Sherman Act, Clayton Act, Hart-Scott-Rodino Antitrust Improvements Act, Robinson-Patman Act, Federal Trade Commission Act, and Puerto Rico Anti-Monopoly Act.
As a data processing company that services both foreign and domestic clients, the company’s business activities in foreign countries, and in particular its transactions with foreign governmental entities, subject it to the anti-bribery provisions of the Foreign Corrupt Practices Act (‘FCPA’), as well as the laws and regulations of the foreign jurisdiction where it operates.
Several of the company’s subsidiaries are registered with or certified by card associations and payment networks, including the ATH network, MasterCard, Visa, American Express, Discover, and numerous debit and EBT networks as members or as service providers for member institutions in connection with the services it provides to its customers.
The company is also subject to network operating rules promulgated by the National Automated Clearing House Association relating to payment transactions processed by it using the Automated Clearing House Network and to various government laws regarding such operations, including laws pertaining to EBT.
Additionally, the company is subject to the Payment Card Industry Data Security Standard (the ‘PCI DSS’), issued by the Payment Card Industry Security Standards Council.
Geographic Concentration
For the year ended December 31, 2024, 64% of revenues were generated from the company’s business in Puerto Rico, while the remaining 36% was generated from Latin America and the Caribbean. Latin America includes, among others, Costa Rica, México, Guatemala, Colombia, Chile, Uruguay, Brazil, Peru, and Panamá. The Caribbean primarily represents the Dominican Republic and the U.S. and British Virgin Islands.
Seasonality
The company’s payment businesses generally experience increased activity during the traditional holiday shopping periods and around other nationally recognized holidays, which follow consumer spending patterns.
History
EVERTEC, Inc. was founded in 1988. The company was incorporated in 1989.
