Pioneers in Payments: A Look Back at TSYS’ First European Breakthrough
While it may seem difficult to believe, humans began entering the unknown of space less than 70 years ago. Early space explorers changed our view of Earth and redefined the scope of our world, taking risks to make new discoveries. There were no assurances that these risks would pay off, but since the launch of the first artificial satellite in 1957, we have traveled to the moon, put a rover on Mars, and even have billionaires competing in space tourism. Those pioneers proved that venturing into the unknown is fraught with opportunities as well as challenges.
The business of payments is similar, especially considering the uncharted territory of entering a new market. A company may have an established culture and reputation in its home market and know its customer base and their requirements, but this knowledge may not translate when entering new countries with different cultures, no established relationships, and new regulatory and compliance requirements. And because it is such a risk to enter a new market, many companies struggle to survive. TSYS, a Global Payments company, is an exception. In 1999, it ventured to the other side of the Atlantic to enter the European market, and in May 2001, it completed a major milestone: its first European conversion.
To celebrate the 20th anniversary of this achievement, we gathered insights from three people instrumental to TSYS’ growth in Europe, looking at how the last 20 years paved the way for the next 20: Bruce Bacon, who is currently senior vice president of North America sales but opened the first TSYS office in Europe; Kelley Knutson, who previously served as president of TSYS International and is now president at NetSpend; and Rene Kruse, who is the current president for TSYS’ International business.
“Breaking a lot of ground”
TSYS’ growth into Europe can actually be traced back to 1997. Already an established leader in payments in the United States, the company was growing in North America by entering the Mexican market, establishing business in parts of the Caribbean, and experiencing substantial progress in Canada. TSYS was excited about where it could go next internationally and gathered insights from leading issuers across Asia, Europe and Latin America. This helped TSYS understand the requirements of these new markets, particularly what would be needed to develop its processing platform and meet the regulatory and compliance needs of a new market.
The company decided that the logical next step was to be pan-European and defined a vision for how it could enter the European market. To lead the charge, TSYS tapped Bacon, who was vice president of International Services for the company at the time. In 1999, Bacon moved to the United Kingdom to open a start-up office in Uxbridge and was later joined by a small TSYS team. They wasted little time getting to work. “We went in (to Europe) with a really strong position and a commitment to that market,” Bacon recalls. “We started in the continent of Europe, building relationships … but received more traction in the UK and Ireland.”
From that small office in Uxbridge, Bacon knew that it would be a challenge to pry their way into what was a very closed market at that time. “It was about execution. We had no real infrastructure there. We didn’t have a large staff,” Bacon says. To succeed, the TSYS team would have to outwork the competition. By happenstance, Bacon learned on a train ride that the team’s hard work was paying off.
He was traveling into London and overheard someone mention the name of a TSYS competitor to his colleagues. Bacon became even more attentive when he heard one traveler reference TSYS. Bacon recalls, “One said, ‘Well, [TSYS] has 30 people or more down in Uxbridge, and they’re just everywhere.’ And at the time, we had three people in an office that was shared by all of us! The reality was the hard work, the commitment that we had with those three, but more importantly, with the staff here in the U.S. that came in and were prepared and ready on an overnight flight for a meeting the next day, that was the team that delivered. That made it happen.”
At the time, Knutson was running a startup fintech company in London but was tracking things at TSYS closely. “I knew a lot of the folks at TSYS, knew their reputation, and was incredibly impressed with how they went about entering the European market,” he recalls. “[They were] pioneers, Bruce and the team. It was a big gamble and a huge commitment on the part of TSYS. They weren’t really sure where this was going. They went about it in a really methodical, thoughtful, relationship-centric way, and made a significant investment to ensure success. TSYS was breaking a lot of ground.”
“A completely different world”
For TSYS to be successful in Europe, there were a number of questions: How would the culture transfer from the U.S.? How would it find the mix of people who knew the TSYS platform and capabilities with hiring new people from the market? How would a U.S.-based company handle EMV, Euro currency, and value-added tax? TSYS saw these as opportunities. “It was like we’re putting a new brick in place as the foundation for the future of our business,” Bacon says. “Every day, we were encountering new challenges, but we tackled them, and with the great passion that we’ve always executed upon. We knew we had the opportunity to grow into Europe.”
The challenges presented by the UK market were more considerable compared to other areas of Europe, something Kruse knew first hand. In 2001, Kruse was leading a technology team for an issuer in Europe, moving as an expat from Germany to the UK. “I’d experienced a completely different world when it came to payments. The UK was far more developed than the rest of Europe,” he remembers. TSYS had the additional challenge of learning to navigate the waters against the local competition. Kruse says, “People often underestimate how difficult it is to break into a new market, in particular a developed market, where you have incumbents who are protecting their territory. You have a marketplace that may challenge you on your commitment, and you have competition who will clearly discredit you in the marketplace as not being committed or not having a local presence.”
It may seem more common today, but TSYS entered Europe when pan-European processing and pan-European companies were extremely few and far between. These closed and protective markets would often try to prevent new entrants from making headway. But even as an outsider at the time, Knutson remembered that TSYS would not be deterred. “TSYS said, ‘We’re going to come with a new [relationship-centric] model, a different model, and we’re going to prove that we can live up to those same domestic standards and compete at a national level, as well as someday compete across Europe.” The TSYS team knew it would only take one company to give them that chance, and it only took two years to make it happen.
“Have you seen the newspaper yet?”
“It’s phenomenal when you think about it,” Bacon recalls. “We established our office in August of 1999. And two summers later, we were going to convert our first clients.” TSYS’ hard work paid off when NatWest selected the payments provider to process its portfolio.
Surprisingly, the TSYS team had very little time to celebrate. Less than 24 hours after a celebratory dinner with the NatWest team, news was breaking. “Troy [Woods, TSYS’ then executive vice president and current chairman of the board for Global Payments] called me from the airport and said, ‘Have you seen the newspaper yet?’” That morning, Bacon learned that Bank of Scotland had prepared a bid to acquire NatWest. Eventually, Royal Bank of Scotland (RBS) became involved and ultimately acquired NatWest.
This created a challenging opportunity for the payments processor: it needed to win the critical endorsement of RBS. The TSYS team had established relationships with the RBS staff, but RBS had not yet made the decision to commit to TSYS. Rather than hang his head, Bacon looked to this merger as an even bigger opportunity. “For the whole organization [at RBS/NatWest] to get behind us was a tremendous statement to the market and what our customers chose to do to address that.”
The RBS acquisition of NatWest and ultimate selection of TSYS as its payments provider cemented TSYS’ status as a major player in Europe — an impressive feat to Knutson. “TSYS broke up a monopoly in many ways in the UK market that the banks had formed. [TSYS] just kept chipping away. And then I saw the news that not only did they get RBS, but they got RBS and NatWest. And that was huge news in the payments world. It told the market that this company from the U.S. was going to fight hard and win. And they went about it by winning two very big brands.”
“Relationships that last a long time”
Now, 20 years since that first European conversion, TSYS’ business has grown exponentially. Knutson does not think that TSYS would have been as successful as they have been in the U.K. and Ireland or across Europe “without the commitment of those early pioneers and early implementations teams that really set the tone and the standard.”
In many ways, the more things change, the more they stay the same. What Bacon and his team discovered so long ago, Knutson and later Kruse have also experienced when they have been at the helm of TSYS’ growth into new markets. For example, when TSYS expanded to Brazil, Kruse felt, “You had exactly the same scenario. [It was] the perfect storm, right? You’re working on everything that you need. You’re working on a data center, you’re working on a local presence, you’re working on operating models, you work on the applications.” It was like that early period in Europe all over again.
Today, RBS operates under the NatWest brand and continues its relationship with TSYS. The TSYS team in the early 2000s built the foundation that Knutson and Kruse continued to cultivate. “My job now is much easier,” Kruse says, “when we talk about extending the relationship further into new verticals but also extending the relationship from a timeline perspective with all the pressures that we have, be it regulation, be it competition, be it a change in consumer behavior, a technology shift, coming out of the pandemic, of course, and this massive acceleration that we’ve seen in digital channels. All that together is only possible, and we’re only talking about these things today, because of the work that started in 2001.”
What TSYS has been able to deliver over the past 20 years — leading technology, commitment to exceptional service, partnerships based on trust — continues to give the company credibility and the financial means to invest in its future. Kruse says, “We learn every day. With every conversion, with every migration, with every change in technology, we evolve, and we become better. The one thing that doesn’t change is that there’s always people who depend on us on the other side, and those are the relationships that last for a long time.”
“Really extraordinary things”
So what do the next 20 years look like for TSYS on the international stage? Kruse expects the payments industry to grow. “Payments will be everywhere. Technology will evolve. And we see markets like Scandinavia and Europe or the Far East where there’s a completely new approach to payments.”
He believes there is significant growth and great opportunities in front of TSYS, especially since its merger with Global Payments in 2019. “We’re now bringing the full power of Global Payments as an organization, from an issuing business and merchant acquiring business together. Those are unique opportunities that only players like ourselves can bring to the table. And that, combined with evolving technology, is what excites me every day. You can’t really see an end to the opportunities in front of us.”
Much like space explorers learned decades ago, the unknown of the future is full of exciting opportunities. “The reality was our team, in the way they acted, made the impossible possible,” Bacon remembers fondly. “We [had] a dream that we could take what we deliver to other markets that needed those solutions and needed our culture. And we executed on that. We took ordinary people and did some really extraordinary things.”