ACI Worldwide Inc

NASDAQ:ACIW

Earnings Call Transcript 2019-Q2

[Operator]

Good morning. My name is Tom, and I will be your conference operator today. At this time, I would like to welcome everyone to the ACI Worldwide Reports Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question and answer session. [Operator Instructions] Thank you.

I would now like to turn the conference over to John Kraft. Sir, please go ahead.

[John Kraft, Investor Relations]

Thanks, Tom. Good morning, everybody. Today's call, like all of our events, is subject to both safe harbor and forward-looking statements. You can find the full text of both statements on the first and final pages of our presentation deck today, a copy of which is available on our website as well as with the SEC.

On this morning's call is Phil Heasley, our CEO; and Scott Behrens, our CFO. Before we begin, though, I'd like to let everybody know that ACI will be attending the 2019 Wells Fargo Technology Services Forum in Newport, Rhode Island on August 13 as well as the Craig-Hallum's FinTech Innovators Conference in New York City on September 4 as well as the D.A. Davidson 18th Annual Technology Conference also in New York on September 4.

With that, I'd like to turn the call over to Phil.

[Phil Heasley, Chief Executive Officer]

Thank you, John, and thank you, everyone, for joining today's call. I'm pleased to report that Q2 was a strong quarter for ACI. As the digital transformation of payments accelerates rapidly around the globe, ACI's vision of Any Payment, Every Possibility, is resonating with the market. Our solutions continue to drive customer innovation and success. And as a result, we grew our business organically across our two P&Ls, four customer segments and six solution areas. In the first quarter, as part of ACI, Speedpay further propelled our results, bringing notable improvements in profitability and scale to our ACI On Demand platform business.

I'm going to spend the next few minutes providing additional commentary on the quarter, and will share a sample of the Q2 wins that demonstrate ACI's momentum across the key bank, intermediary, merchant and corporate customer segments. I will then turn the call over to Scott to cover the details of our Q2 financial results.

I'll start with our ACI On Demand business. This quarter, ACI On Demand grew revenues and profitabilities year-over-year, driven in particular by the increased demand for secure and reliable e-commerce and digital bill payment solutions among merchant and corporate customers. In Q2, ACI On Demand achieved 8% revenue growth year-over-year before the contribution from Speedpay.

In early May, we completed the acquisition of Speedpay, bringing together the industry's market-leading U.S. bill payment portfolios. The acquisition brought immediate scale to our platform and has accelerated ACI On Demand's path to achieve our Rule of 40's profitability target. ACI On Demand net adjusted EBITDA margin improved to 18% from a minus 5% in Q2 last year.

I'm extremely pleased by the progress we achieved integrating Speedpay and UP Bill Payment businesses during the first 90 days. Our teams are already working successfully as part of the One ACI family, bringing the best of both organizations together in a way that multiplies our power. We've accelerated our plans to deliver a unified bill payment platform capable of supporting billions of transactions. In the case of ACI and Speedpay, 1 and 1 really does equal 3.

In Q2, we continued to advance our bill payment portfolio and market leadership with the launch of 2 new capabilities, ACI disbursement services and a new wallet, mobile wallet payment and notification capability for both Apple and Google Pay capabilities. We're also developing real-time recurring digital subscription payment capabilities to meet the converging needs of merchant, corporate and billers.

Momentum continues with strong customer wins, expansions and renewals in our corporate segment for our biller solutions, including the State of Georgia, a long-term ACI Bill Pay customer, expanded its relationship with ACI to bring on additional state counties, utilizing web tag renewals. The California State government, a long-term ACI Bill Pay customer, signed a renewal to consolidate term extensions for multiple state departments, municipalities and agencies. New England-based Nichols College selected ACI's Bill Payment solution to improve its students' bill pay experience. And KW Specialty Insurance, a leading full-service insurance company, selected ACI to provide its customers a fast and efficient digital bill pay experience. KW will utilize ACI's new disbursement services, which allows businesses to send money to consumers' bank account in real time using their debit card.

Within ACI On Demand, we also continue to see strong momentum for our ecommerce and omnichannel platform solutions. Earlier in the quarter, we announced an alliance with JCB International to launch its JCB web API service, which is powered by our UP eCommerce payment solution. The JCB web API service makes it easier and faster for acquirers to connect the JCB network to accept transactions for more than 130 million JCB card members.

Other key milestones, wins and renewals in the merchant segment in quarter 2 include one of the largest office supply retailers in the United States, which selected UP Merchant Payments to manage its payments infrastructure. Orangepay, a leading Dutch-based PSP with merchant customers across Europe and China, selected UP Merchant Payments to process its online payments.

KingPay, a leading global fintech, selected UP Merchant Payments as it expands its merchant acquirer business and works to control online payment fraud and reduce charge-backs. IPS, a leading qualified service provider in China as well as a central hub for Visa and Mastercard cross-border transactions, selected UP Merchant Payments. IPS is working to become China's leading provider of cross-border transactions for Visa and Mastercard. One of the largest mobile network operators in the U.K. and a long-term ACI customer is utilizing UP eCommerce payment solution for online fraud prevention.

Shifting now to our On Premise business. The ACI On Premise P&L had a strong quarter, growing revenue and EBITDA year-over-year, driven by digital transformation, open banking and new real-time payment regulations. Demand for our UP Real-Time Payments capabilities particularly grew significantly, up 40% from quarter two 2018. Showcasing our customer momentum, ACI was recognized as the best real time payments solution provider at the Ovum payment innovation awards.

In addition, we announced that Venmo, a financial group is leveraging our UP real time payment solutions to accelerate new products to markets such as Zelle's business to consumer payments. Real time payments continue to take hold across the globe. This week's news from the Federal Reserve announcing plans to build a real time payment network in the U.S. validates the growing opportunity. ACI already supports the two current U.S. real-time networks, Zelle and The Clearing House, and is also powering real time payments around the world, in Australia, Singapore, Thailand, Malaysia, Europe and the Middle East.

We've now extended our real time payment reach to India. In Q2, we made a strategic investment in Mumbai based Mindgate Solutions. India's leading digital payments solution provider as well as market leader in processing Unified Payment Interface or UPI. These are real time transactions. 70% of UPI's transactions are currently routed through Mindgate customer banks. By 2023, industry experts predict that there will be more than 60 billion UPI transactions annually, counting more than 50% of India's digital payment transaction.

As part of this investment, ACI and Mindgate will deliver a joint real time payment solutions that will combine ACI's proven universal payments processing software with Mindgate's digital overlay services. This will build on ACI's strong heritage and presence in India's payment ecosystem. Eight of the country's ten largest banks currently utilize ACI's UP solutions to process 60% of India's digital payment transactions.

In addition, with our global reach, we plan to bring Mindgate's capabilities to a number of international markets in addition to India. In June, I had the honor of hosting a payments forum with India's leading bank executives in Mumbai. I am very excited by the innovation occurring in the country, which is on a path to outpace other regions and transfer its economy with digital payments. Key ACI On Premise's wins, expansions, renewals across our bank and intermediate segments include State Bank of India, the largest bank in India, and the long term ACI customer, which utilizes UP retail payments and UP payments risk management to meet its card and non-card based transaction processing and fraud monitoring requirements.

Wells Fargo, one of the world's largest banks and long term ACI customer is utilizing Universal Online Banker for ACH payments. Cardtronics, the world's largest ATM operator and long term ACI customer is utilizing UP retail payments as it expands into markets and segments. Dashen, a long term ACI customer in Ethiopia is utilizing UP retail payments and UP payments risk management as it expands its leadership position within the country. Currency Select, which enables partners in 21 countries to perform dynamic currency conversion and multi currency processing selected UP retail payments to revamp its existing acquiring business functions.

And to improve its operational effectiveness; Artajasa, a leading Indonesian-based interbank network, selected UP Retail Payments to quickly introduce new payment channels and payment types to its customers; Banred, the largest processor in Uruguay, selected UP Retail Payments to consolidate many of its payment systems into a single innovative platform; Dollar Bank, a leading regional bank based in Northeastern United States and long-term ACI customer, renewed with Universal Online Banker and will upgrade our platform solution to offer a revamped user experience and deliver seamless desktop and mobile to its business customers.

Before I hand it off to Scott, I want to highlight and congratulate some exceptional organizations that are driving innovation in payments. Last month, we hosted our annual ACI Exchange customer event and celebrated the best of the best in payments.

We presented ACI Innovation Awards to ANZ New Zealand, New Zealand's largest financial services group; Avant, a leading online lending platform for customers; ING, a Dutch multinational banking and financial services corporation; PayNet, the national payment network and central infrastructure provider for Malaysia; and Universal Studios, the theme park and entertainment powerhouse.

We are proud to be fueling their innovation and honored by our customers' ongoing trust and partnership. It's customers like these that are making Any Payment, Every Possibility happen around the globe and accelerating the digital global economy.

In closing, I want to reiterate that ACI is well positioned for continued growth in 2019 and beyond. With strong new bookings pipeline and the strategic acquisition of Speedpay, ACI is poised to capitalize even more quickly on the growing number of payment transactions occurring around the world each day. We are on track financially for the year, and we're reiterating our guidance for 2019.

I'll now turn it over to Scott to provide additional financial details. Thank you.

[Scott Behrens, Chief Financial Officer]

Okay. Thanks, Phil, and good morning, everyone. I first plan to go through the highlights of the second quarter and then provide our outlook for the second half and full year. We'll then open the line for questions.

I'll be starting my comments on Slide 6 with key takeaways in the quarter. Most notably in the quarter, we closed on our acquisition of Speedpay, and our integration efforts are on track. Our reported results for the quarter include the contribution of Speedpay from May 9 to June 30. The results for Speedpay came in as expected, contributing revenue and EBITDA of $49 million and $12 million, respectively. Speedpay also contributed to our growth in backlog, adding $311 million to our 12-month backlog and $1.5 billion to our 60-month backlog.

For the rest of my comments here, I'll be discussing our results on an organic constant currency basis, so excluding the contribution of Speedpay. Starting with bookings. Total bookings were $301 million, up 57% versus Q2 last year. And new bookings were $129 million, up 4% from Q2 last year. We ended the quarter with 12-month backlog of $1.1 billion, up $16 million during the quarter and 60-month backlog of $5.7 billion, up $29 million during the quarter.

Q2 revenue grew 8% over last year and came in above our guidance and expectations. And most notably, recurring revenue now represents 75% of total revenue. Our solid revenue growth contributed to strong EBITDA growth, which was up 41% over last year.

Turning next to our 2 operating segments. Our On Demand business saw revenue growth of 9% over Q2 last year and continues to show solid margin improvement, delivering net adjusted EBITDA margins of 7% in Q2 this year compared to a negative 5% in Q2 last year. And combined with Speedpay margins, our On Demand segment delivered 18% net EBITDA margins in the quarter. So as we've been saying for some time now, margin improvement will come with scale as we grow into the infrastructure that we've built out over the last few years.

Our On Premise segment grew 6% and delivered adjusted EBITDA margins of 46% versus 45% last year. Adjusted operating free cash flow was $16 million, up from $13 million in Q2 last year. We ended Q2 with $139 million cash, down from $176 million at the end of Q1. During the quarter, we used our cash and free cash flow to pay transaction and financing fees as well as onetime integration expenses related to the close of Speedpay and to pay down our debt. We ended the quarter with $1.4 billion in debt and a pro forma net debt-to-EBITDA ratio of approximately 3.7x.

And lastly, here, we have $176 million remaining on our share repurchase authorization. One other note here before turning to our outlook. We don't spend a lot of time discussing items below EBITDA, but this quarter, we did recognize a sizable tax benefit. The addition of Speedpay's U.S.-based income has allowed us to reassess our ability to utilize certain foreign tax credits that we had previously reserved.

So modeling in our projected U.S. earnings from Speedpay, we now expect to be able to utilize those tax credits before they expire. So we've recognized the tax benefit in the quarter of $18 million. Ultimately, this will be realized by lower cash taxes in the future as we apply those credits to future U.S. earnings. And it's important to note that this benefit is in addition to the previously disclosed tax benefit that we'll realize from the 338(h)(10) election for the acquisition of Speedpay.

Turning next to Slide 7 with our guidance. We remain on track for delivering our financial guidance for the year. As a reminder, we expect 2019 total revenue to be in a range of $1.315 billion to $1.345 billion and adjusted EBITDA to be in a range of $360 million to $380 million, which excludes between $30 million and $35 million in onetime transaction and integrated-related expenses. We continue to expect new bookings growth to be in the upper-single to low-double digits.

Operating free cash flow is expected to be in a range of $190 million to $200 million. And we're also reiterating our 2020 EBITDA outlook, which is expected to be in a range of $425 million to $445 million.

And finally, we expect to generate between $335 million and $345 million of revenue in the third quarter. And note that this range does not include the impact of carryover deals from Q4 2018. We still expect those most likely timing of these deals in Q3, and we believe we're very close to completion on those. However, these deals are not included in our Q3 forecast and would be upside to this guidance range.

So that concludes my prepared remarks. Operator, we're ready to open the line to questions at this time.

[Operator]

[Operator Instructions] Our first question comes from the line of George Sutton from Craig-Hallum. Your line is open.

[George Sutton, Craig-Hallum]

Thank you. Nice results, guys. So I wondered if you could give us an update on the large M&A related deals that had pushed from prior quarters and seem to be big opportunities for you. Did any of those close in the quarter?

[Scott Behrens, Chief Financial Officer]

George, this is Scott. Yes, as I mentioned, in terms of our Q3 guidance range, they did not close in Q2 and the Q3 guidance range that we put out there does not have them included. But, we are in what I call late stages on those and so if those close here in Q3, which we continue to expect them to, they would be upside to what we've guided to.

[George Sutton, Craig-Hallum]

Superb. Relative to your on demand margins, which improved very nicely, do you view that as an inflection that we have achieved and is that now going forward, just going to be a continued area of margin expansion?

[Scott Behrens, Chief Financial Officer]

Well, the short answer is yes. I mean, I think the inflection really started even if you go back to last year where we flipped positive and in terms of EBITDA margins for the first time and we're continuing even on an organic basis to show the power and scale of that, the AOD business, meaning just layering on the organic revenue alone was driving margin expansion. The addition of the incremental SpeedPay EBITDA on top of that is allowing us kind of a step up in our trajectory in our path toward the our Rule of 40 targets for AOD. So, yes, I think we had that inflection point last year. It's more noticeable this year with the layer on of SpeedPay.

[George Sutton, Craig-Hallum]

Got it. Great results. Thanks, guys.

[Scott Behrens, Chief Financial Officer]

Thanks George.

[Operator]

Our next question comes from the line of David Eller from Wells Fargo. Your line is open.

[David Eller, Wells Fargo]

Hey, good morning, Phil. I think in the script you talked about maybe accelerating some of the SpeedPay integration plans. So could you talk about any changes in plan and any milestones or timeline you have planned for, that we can be looking to?

[Phil Heasley, Chief Executive Officer]

In terms of bringing the businesses together, well, we've been working on a multi-year project to build a state-of-the-art back end system. Western Union had embarked on a front end, they call it NextGen system. So, as we've really gotten under the covers and looked at it in great detail, we found that there is more leverage coming from the synergy than we originally thought. And we're going ahead on a, on some additional adds such as subscription billing, and we've already implemented the educational, the portal and whatnot.

So, we're feeling confident that it's still going to be a year and a half, two years before we start seeing major improvements and it's going to be three years before, three plus years before we're totally done. But we see the, we see our results improving. We're getting more critical mass, not less critical mass. It's a big project, but it's going to a one of a kind platform once it's done.

[David Eller, Wells Fargo]

Great. And then, Scott, back to the SpeedPay, I was kind of having a little trouble reconciling the organic versus reported numbers. So was SpeedPay dilutive to the On Demand segment in Q2? Am I calculating that right? So like what was the, I guess, the organic change in EBITDA?

[Scott Behrens, Chief Financial Officer]

Yes. So the organic change in the if you're looking at specifically the AOD segment went from a negative 5% EBITDA margin last year to a plus 7% EBITDA margin this year. Then you layer on the Speedpay EBITDA. And again, Speedpay delivered for the subperiod, less than two months, they delivered $49 million of revenue and $12 million of EBITDA. That drove the EBITDA margin up to 18%. So both on an organic basis as well as with EBITDA, they're both accretive year-over-year.

[David Eller, Wells Fargo]

Okay. Yes. Got it. That's super helpful. That clears that up. And then last question from me on the you talked about some of the tax effects that were more beneficial after the close. What could that look like on an annual basis? I know previously, you talked about cash taxes this year of $40 million. So what sort of reduction would you expect either for this year or going forward?

[Scott Behrens, Chief Financial Officer]

Well, a lot of the cash taxes that we're paying right now are in our international operations. Historically, we had acquired a lot of NOLs that have made our U.S. federal cash tax pretty low, and that's going to continue. And that's going to continue for 2 reasons. One, the 338(h)(10) election on the acquisition of Speedpay is going to give us a substantial tax deduction of almost probably $700 million.

Now that stretches out over time, but that will be a deduction against taxable earnings going forward and will impact U.S. cash taxes. But also, the point I've made on the foreign tax credits. We had reserved this $18 million because we felt that they wouldn't be able to be utilized before they expire. And by adding in the projections that Speedpay gives us in its predominantly U.S. earnings, we're going to be able to utilize those foreign tax credits before they expire.

So that was the benefit that I mentioned in my scripted comments. But yes, it'll be a number of years before we are really paying anything of significance in terms of U.S. cash taxes.

[Operator]

[Operator Instructions] Our next question comes from the line of Peter Heckmann from Davidson.

[Peter Heckmann, Davidson]

It seems as though there have been several deals in billing as well as B2B payments over the last, let's say, four to six months. Have any of those deals, in your view, changed some of the competitive dynamics? Or do you continue to feel that the combination of ACI and Speedpay has the formula to be a long-term leader in the bill pay space?

[Phil Heasley, Chief Executive Officer]

Well, a lot of the acquisitions that have been made, there's been some very big horizontal acquisitions. And they've largely been either between customers of ours and customers of ours or customers of ours and near competitors of ours. And that doesn't really make a certainly doesn't make an immediate change. A lot of the pressures that they are dealing with have to do with real-time payments and alternate payment methods that you really need a broader array array than front-ending traditional association kinds of payments.

There have been some other more innovative payments that have taken place that also are recognizing the growth of non-traditional and certainly immediate payments and whatnot. And I would say that some of those are competitive in that they're going to go after opportunities that we're going to go after. But our growth, the 40% -- you're getting -- we haven't even gotten into the point where the real growth rates of immediate payments are hitting, right?

So there's a lot of room, and I think you're going to see a lot of activity in that category. And I worry less about the horizontal mergers that take place than other people who are rethinking, reshaping. The good news is that we sit at the center, we sit at the apex, of where this change is taking place. We don't have the scale to compete against some of those guys, but we certainly have the current share and the current capabilities to effect the change. So we feel really comfortable in terms of our position, but we have immense respect for the sized players that are entering the space.

[Peter Heckmann, Davidson]

And then just on -- you mentioned a little add-on, I think, at Wells Fargo for Universal Online Banker, some of the functionality. But as regards to that product within commercial or corporate digital banking, do you feel like we're past some of the attrition that we had seen from the legacy platform? And do you think within the next year or so we should see your digital banking on a net basis contributing to growth rates?

[Phil Heasley, Chief Executive Officer]

Yes. I think you should. Now one thing that we did not broadcast, but being it's now completely behind us, we can tell you, is we never had any intention of staying in the consumer online business. And we have now attrited through not renewing, right? We've now attrited 100% of that, right? So we've eliminated that category from our repertory of products. So it's attrition. We can't get anymore attrition there because we're out of that business. And we really -- that was a planned exit. That was not an unplanned exit.

And by all accounts, our other product is a very, very high quality -- is a very high-quality product. I think you saw today that Dollar -- there was a company -- there's 2 or 3 guys that are long-term customers that are going from older technology to the newer technology, the new platform. We are not -- also, we're also not a supporter of on-premise, except from a product standpoint.

Like we'll supply ACH capability to Bank of America or Wells Fargo or whoever, but we will not give them a generic online banking system because that's key to their branding and everything else. What we do is we offer platforms for those sized banks that want a high-quality corporate interface or we provide functionalities to big players that need our payments skill set versus our digital skill set in terms of the offering. So yes, we've kind of crossed the Rubicon in terms of working our way out of acquired assets that we didn't want to continue.

[Peter Heckmann, Davidson]

Great. That's helpful. Thanks so much.

[Operator]

Our next question comes from the line of Brett Huff from Stephens, Incorporated. Your line is open.

[Brett Huff, Stephens, Inc]

Good morning, Phil, Scott and John. Congrats on a nice quarter.

[Phil Heasley, Chief Executive Officer]

Thanks Brett.

[Brett Huff, Stephens, Inc]

A follow up question on SpeedPay. I'm not sure for Phil or Scott, but my understanding is that SpeedPay had trended a little bit bigger in terms of customers for the bill pay solution. And wondering how the initial visits are going with some of those big customers. I suspect that SpeedPay probably wasn't as well, didn't have as many resources at its former home as it does now in terms of resources and focus. So wondering if bringing more of that to bear and speaking with those customers, you know, as there are likely renewals, were there any customers we are worried about, we feel better about renewing in the future, etc?

[Phil Heasley, Chief Executive Officer]

We've put an extensive amount of energy into making it clear that this is a clear and important and heavily invested focus of ours and what not. And we've had some very good conversations. You know, any time you go through something like this, you find out five or 15 things that you can do to make your customer happy, that, you know, not that they weren't being well treated, but actually, the SpeedPay, the people that oversaw the accounts really did a fantastic job. They didn't have our resources in the category, but they really did a fantastic job. But we actually had hired as good consultants as you can get to manage the interface with the customers during the entire quiet period and what not.

So we were able to get off of that running and really reshape our roadmap in terms of addressing the needs of some of these customers. And, you know, we have some very large customers, yes, a lot of those large customers are more conglomerate oriented. So they're both large customers, but they're something we're very used to dealing with in terms of our big customers around the world.

So there's both the, there's the corporate relationship, plus there's the more localized business relationship that has to take place. I think the team, the SpeedPay team, the now One ACI team, I think they've done a really good job in terms that the cross-sell, now Walletron, we don't talk a lot about Walletron and what not. But the applicability of wallet and alternate and you know, as real time payments work their way into bill pay, our customers are smart, they're big, intelligent companies.

They see the benefit in terms of, you know, not necessarily more of the same business, but more different ways of making real time payments, making their customer payments take place, be it a real timer or alternate or, or just an easier and easier process and the educational portal is a good example of that because it's really addressing ways for our customer to better engage with their customer, which is actually the student and student's families. So, we're looking at a lot of things across the board that way and having very good conversations.

[Brett Huff, Stephens, Inc]

Thanks. And my follow up is on the faster payments evolution, things seem to be heating up both via M&A by the big two networks. Some partnerships they've started to strike, etc. And then a recent announcement of a big European purchase. Does that, I'm sure that that makes faster payments higher in everybody's mind, which is I think is a positive for everybody in the market, probably including you.

But does that how does that change the -- on the ground trying to win deals either at the country's switch level or at the helping banks connect to the country switch level? How does it, how does the kind of feet on the ground change the competitive dynamic, if at all?

[Phil Heasley, Chief Executive Officer]

Well, I would these guys, you know, I have nothing. I think, you know, my history. I certainly understand these guys awfully well, I have immense respect for them and what not. Right now what it's doing is that they're increasing the current and therefore the speed of the stream, you know, if you think about this as a river, we're paddling like mad, you know, everyone is saying oh, anything but immediate payments. And they're, we're really we're kind of really kind of paddling uphill.

Suddenly, the big guys come in and say, well, gee, you know, we think it makes sense. Well, step number one is that's going to accelerate our boat down the downstream. Now, that being said, we understand that, these guys are 70 times our size or, you know, whatever you know.

So, you know, we're playing with we're playing with giants in terms of that. So I wouldn't get cocky, right. And I wouldn't get into a pricing war with one of these, you know, with one of these guys. I can't win, right. But right now, there's plenty of space and quite honestly, I think we have we're from a connectivity standpoint we're in fantastic shape.

We have got the right we've got the right connectivity to the right banks and what not. We've been giving the banks the technology, right, in terms of renewing, we've been giving them the old and the new technology. This is a perfect use case for the new technology.

You heard things I've been talking about BMO and some of these other places that we're talking about how they're utilizing and what not. That's wind behind our back, but it's also an increase in the current where we don't have, you know, where we don't have the strength and we don't play is in the ability to actually move the money in the canoe - just the pure scale that these are the guys.

So we have to respect where -- we never were a big scale player and we don't we can't suddenly get cocky and think we are a big scale player. I think Mindgate is a perfect example where we had two thirds of the debit share in the market, but it was basically a debit card, therefore not a large portion of the actual trends of India, right. India goes in, revitalizes, reinvents themselves. We get ourselves into two-thirds of the volume of the immediate payments by investing and partnering with Mindgate. So those kinds of moves, you know.

So if the big guys come in and they accelerate immediate payments, that's for the foreseeable short term that's three, five years, that's good for us, right. Longer term, you know where we're going to they're $300 billion or $400 billion in market size, and we're $4 billion in market size, we've got to respect who we actually are, right.

So not as bad situation, Brett, I mean, you know, you got to be sober, but it's a nice situation that we're in. And we've been investing for decades for this moment to happen. And we've, you and I have had a lot of conversations over the years about whether it was even going to happen, right. So the fact that it's happening, I think is fantastic. Different kinds of opportunities and different kinds of risk come with it.

[Operator]

And this concludes our question-and-answer session. I would now like to turn the conference over to our presenters for any further comments.

[John Kraft, Investor Relations]

Well, thanks, everybody, for your time. We look forward to catching up in the coming weeks. Have a good day.

[Operator]

And this concludes today's conference call. Thank you for your participation. Have a great day and you may now disconnect.