Selection of Galant As New Boss Suggests VeriFone Will Keep Spotlight on Services

By Kevin Woodward

n

VeriFone Systems Inc. on Monday named Citigroup executive Paul Galant as its chief executive, ending a six-month quest for a permanent top executive. Galant replaces interim chief executive Richard McGinn, who assumed that role in March when long-time chief executive Douglas G. Bergeron left the San Jose, Calif.-based point-of-sale terminal maker.

n

Galant has been chief executive of Citigroup Inc.’s Enterprise Payments business since 2010, where he oversees digital-payment services for the banking giant. Previously, he was chief executive of Citi Cards, the bank’s consumer credit card business, from 2009 to 2010, and from 2007 to 2009 he ran Citi Transaction Services, which offers institutional services.

n

That banking experience suggests services will remain a primary focus at VeriFone, suggests Todd Ablowitz, president of payments-consulting firm Double Diamond Group LLC. “It’s interesting they chose someone from the banking side,” Ablowitz says. The days of making money from selling POS terminals are limited, he says. It’s the services associated with terminals that generate recurring revenue. “If you’re VeriFone, you have to have a compelling solution for smaller merchants and get into recurring revenue,” Ablowitz says.

n

VeriFone has made moves in recent years into payments services, including its efforts to run promotions as well as process payments in taxicabs and its introduction of a payments gateway and transaction-security services.

n

For his part, Galant is impressed with VeriFone’s progress, but realizes it has more work to do. “VeriFone has established a tremendous presence in the payments ecosystem with its managed services, platform software, and data-analytics offerings across its core global network of more than 20 million devices in 150 countries,” Galant says in a statement.

n

In February, VeriFone cut its financial outlook, sending its stock down, a move from which it has yet to recover. In trading earlier on Tuesday, VeriFone shares at $22.98 were virtually unchanged from Monday’s closing price of $22.99. It had traded as high as $36.13 in the past 52 weeks. In March, prior to Bergeron’s departure, he outlined a recovery plan focused on improving product delivery and sales operations, better use of research-and-development funds, new staff, and a revised organizational structure. Since then, VeriFone has overhauled its management team.