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		SEC Comment Letter 10.12.12

October 15, 2012

Jim Allegretto

Senior Assistant Chief Accountant

United States Securities and Exchange Commission

Mail Stop 3561

100 F Street, NE

Washington, D.C. 20549

Re:    Global Payments Inc.

Form 10-K for the Fiscal Year Ended May 31, 2012

Filed July 27, 2012

File No. 001-16111

Dear Mr. Allegretto:

This letter sets forth the responses of Global Payments Inc. (the “Company”) to the comments of the staff of the Commission, dated September 18, 2012, with regard to the above referenced filing.  Those comments requiring changes to our periodic disclosure will be reflected in our required filings as detailed below, starting with our Form 10-Q for the quarter ending November 30, 2012 and our Form 10-K for the year ending May 31, 2013.

For convenience, each staff comment is reprinted, numbered to correspond with the paragraph numbers assigned in the staff's letter, and is followed by the corresponding response of the Company.

Form 10-K for the Fiscal Year Ended May 31, 2012

Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, page 27

Results of Operations, page 29

Fiscal Year Ended May 31, 2012 Compared to Fiscal Year Ended May 31, 2011, page 29

1.

 Comment:   In your first risk factor and elsewhere in your filing, you disclose that certain card networks removed you from their list of PCI DSS compliant service providers and that your failure or a delay in returning to the lists could have a material adverse effect on your business, financial condition and results of operations.  Beginning with your next Form 10-Q, please expand your disclosure to quantify the impact of being removed from the PCI DSS list on revenue or other appropriate measure and to clarify narratively  the impact of what it means not to be on the list of PCI DSS compliant service providers.  Please refer to the Division of Corporation Finance's Disclosure Guidance Topic No. 2 at http://www.sec.gov/divisions/corpfin/guidance/cfguidance-topic2.htm for additional information.

Response:   Our removal from certain card networks' lists of PCI DSS compliant service providers could mean that merchant customers, sales partners, or other third parties may cease using or referring our products and services.  In addition, prospective merchant customers, sales partners, or other third parties may choose to terminate negotiations with us, or delay or choose not to consider us for their processing needs.  Also, the card networks could refuse to allow us to process through their networks.  We do not believe we can quantify the impact of our removal from the list of PCI DSS compliant service providers. We are not always made aware of the basis for the loss of a merchant or other contract, or the reasons new merchants, sales partners, or other third parties fail to select us as their service provider.  To date, the impact on revenue of terminations that we can confirm relate to our removal from the lists has been immaterial.  Also, the impact on revenue of merchants, sales partners, or other third parties who have failed to renew, terminated negotiations, or informed us they are not considering us at all, where we can confirm it is due to

our removal from the lists, has been immaterial. Further, we have not observed any unexpected decreases in revenue since our initial disclosure of our removal from the lists.  Accordingly, we do not believe that any future loss of revenue related to our removal from the lists of PCI DSS compliant service providers is reasonably likely to have a material impact on our results of operations, financial condition or liquidity.  As stated in our disclosure in the Form 10-K, we continue to sign new merchants and process transactions for all of the card networks, and they have not curtailed our ability to do that.

We can clarify the potential impact of removal from the lists, and we propose to modify our disclosures in future filings to read as follows:

As a result of this event, certain card networks removed us from their list of PCI DSS compliant service providers. Our removal from certain networks' lists of PCI DSS compliant service providers could mean that existing merchant customers, sales partners, or other third parties may cease using or referring our products and services. Also, prospective merchant customers, sales partners, or other third parties may choose to terminate negotiations with us, or delay or choose not to consider us for their processing needs. In addition, the card networks could refuse to allow us to process through their networks.  To date, the impact on revenue of terminations that we can confirm related to our removal from the lists has been immaterial. Also the impact on revenue of merchants, sales partners, or other third parties who have failed to renew, terminated negotiations, or informed us they are not considering us at all, where we can confirm it is due to our removal from the lists, has been immaterial.  We continue to process transactions worldwide through all of the card networks. We have hired a QSA to conduct an independent review of the PCI DSS compliance of our systems and are in the process of remediating our systems and processes where necessary. Once that review is complete, and we conclude the required remediation, we will work closely with the networks to return to the list of PCI DSS compliant service providers as quickly as possible. Our failure or a delay in returning to the list could have a material adverse effect on our business, financial condition and results of operations.

2.

 Comment:   Beginning with your next Form 10-Q, please also provide context around the potential unauthorized access to servers clarifying what you mean by “subset of the number of merchant applicants” and disclose the number of potentially-affected individuals or provide some measure to indicate the degree of exposure.

Response:   We do not believe that we can quantify the number of affected individuals in any greater detail than to say it is limited to merchants in the U.S.  We sent out notice of the potential unauthorized access to merchants in the database that provided such personal information, offering them credit insurance and credit reports at no charge to them.  We believe the best measure of the degree of our exposure is the number of individuals who enroll in the credit insurance and credit report monitoring services that we have offered, which drives our cost to mitigate this particular issue.  To date we have had 15,814 individuals respond and request the insurance and report.  Of this total, 95% of the responses were received during the first sixty days after notification, and only 5% have been received in the ensuing forty five days.  Our total cost, including notification, of providing credit insurance and credit monitoring to these individuals has been approximately $1 million to date, and we do not expect to incur significant additional costs.  All of this leads us to the conclusion that it is highly unlikely that this potential access will have a material effect on our financial condition and results of operations.

In our future filings, we propose the following language in response to your comment:

The investigation also revealed potential unauthorized access to servers containing personal information collected from merchants who have applied for processing services. The merchants who could potentially be affected are limited to those based in the U.S.  We cannot verify those potentially affected as it is unclear whether any information was exported; however, we notified potentially-affected individuals and made available credit monitoring and identity protection insurance at no cost to the individuals.

3.

 Comment:   Reference is made to the increase in the operating margin for your International Merchant Services Segment on page 32.  Please explain to us what the pricing benefits were in the United Kingdom and the nature of the marketing fee true-up in Spain and expand your disclosure accordingly.  Further, please tell us the amount of the true-up.  You may want to use language that is more explanatory to the non-initiate in future filings.

Response:   Pricing benefits in the United Kingdom relate primarily to changes to merchant discount rates that we made upon conversion of our merchant portfolio in the United Kingdom from HSBC's processing platform to our processing platform during the fourth quarter of our fiscal year ended May 31, 2011.  Merchant discount rate is the amount, generally expressed as a flat amount per transaction plus a percentage of transaction value, that we charge a merchant to process a transaction.  The conversion to our processing platform allows us more flexibility to set pricing at the transaction level so that our pricing more closely mirrors interchange charged by issuing banks, which varies depending on a number of transaction characteristics, such as the type of card presented.  As a result, we are able to more consistently achieve our desired net revenue or “spread” on each transaction and on our overall processing volume on our processing platform as compared to HSBC's processing platform.  This has resulted in increased operating margins for our business in the United Kingdom.

In future filings, to the extent we refer to pricing benefits in the United Kingdom, we will modify our disclosure to include language similar to the following:

The increase in operating margin in our International merchant services segment is due in part to pricing benefits in the United Kingdom arising from changes to merchant discount rates upon conversion of our merchant portfolio to our processing platform, which allows us to more closely align pricing with underlying transaction characteristics.

We conduct our merchant acquiring business in Spain through Comercia Global Payments Entidad de Pago, S.L. (“Comercia”).  On December 20, 2010, we acquired a 51% controlling financial interest in Comercia from Caixa d'Estalvis I Pensions de Barcelona (“la Caixa”).  In connection with our acquisition of Comercia, Comercia and la Caixa entered into a Marketing Alliance Agreement (“MAA”) pursuant to which la Caixa provides Comercia with sponsorship in certain payment networks (e.g., Visa and MasterCard), and refers merchants to Comercia for merchant acquiring services.  Comercia sets pricing for merchant acquiring services and establishes minimum profitability thresholds.  Historically, la Caixa was willing to accept lower profitability (and in some cases losses) on merchant acquiring services than would be acceptable to Comercia in cases in which a total business relationship, including commercial banking services and other services provided by la Caixa, was profitable.  The MAA includes a pricing and subsidy provision by which la Caixa has agreed to pay a a marketing fee to Comercia to compensate Comercia for the difference between the rate that Comercia would ordinarily charge a merchant, and a lower rate historically charged by (in the case of existing merchants) or requested by (in the case of new merchants) la Caixa.  The marketing fee true-up we referenced in our discussion of International merchant services operating margin represents the first payment made by la Caixa to Comercia pursuant to the pricing and subsidy provisions of the MAA.  The amount of the payment was €2.6 million ($3.7 million US).  The payment related to the period January 1, 2011 through May 31, 2011, the first five months of our ownership of Comercia and of the MAA.  We did not accrue a receivable for the payment in fiscal 2011 because the amount of such payment was not fixed or determinable and therefore did not meet the criteria for revenue recognition established by SAB Topic 13.  Accordingly, we referred to the payment received during the first quarter of our fiscal 2012 as a marketing fee “true-up”.  In future filings, to the extent we refer to the marketing fee true up, we will expand our disclosure to include language similar to the following:

The increase in operating margin is partially attributable to a marketing fee true up in Spain, whereby la Caixa compensated us for favorable pricing terms extended to certain la Caixa customers during the initial phase of our marketing alliance agreement.

4.

 Comment:   Please help us understand why lower interchange expense due to the Durbin amendment had a positive effect on your revenues.  While we understand the amounts paid to the banks for interchange expense decreased, please explain why there was not a corresponding decrease in revenues as we might expect if your illustrative card transaction on page 6 is similar for debit card transactions.  In this regard, a sample debit card fee transaction may be useful to our understanding and supplement future discussions, similar to the one on page 6, of a credit card transaction.

Response:   The economics of U.S. signature debit card transactions, which drive the revenue increase associate with the Durbin amendment, are substantially similar to those of credit card transactions as described in our illustrative card transaction on page 6.  The amount that we bill a merchant for an individual transaction (i.e., the $2.00 in our example) is referred to as “gross discount” and is a function of the “merchant discount rate” that we negotiate with each merchant, and the transaction value.  The revenue that we recognize is the gross discount less the interchange fee charged by the issuing bank (i.e., the $1.50 in our example). The merchant discount rate is generally expressed as a flat amount per transaction and a percentage of transaction value (2% in our example - our example excludes a flat amount per transaction for simplicity).  We generally set pricing at the transaction level because interchange charged by issuing banks varies depending on a number of transaction characteristics, such as the type of card presented.  For example, both interchange charged by issuing banks and the rates that we charge our merchants are generally lower for debit card transactions than for credit card transactions.  This transaction level pricing, which varies by merchant based on our negotiations with each merchant, helps us to achieve our desired net revenue or “spread” on each transaction, on total transaction volume for a given merchant, and on our overall processing volume.  Merchant discount rates and, accordingly, the amount that we charge for each individual transaction are subject to change periodically based on, among other factors, negotiations with merchants and changes in interchange rates announced from time to time by the card networks.  We reduced the amount we charge a substantial portion of our merchant base for debit card transactions in response to the reduction in debit interchange rates mandated by the Durbin amendment.  In some cases, reductions in merchant discount rates did not completely offset the reduction in debit interchange rates.  In other cases, our analysis of merchant profitability indicated that spreads were already below our target profitability, and we elected not to reduce merchant discount rates.  In total, debit interchange paid to issuing banks was reduced by more than the related reductions to gross discount.  As a result, our revenues increased as a result of lower interchange expense due to the Durbin amendment.

In future filings we will modify our disclosures to clarify the relationship between gross discount, interchange expense, and net revenue.  Specifically, we will modify our illustrative transaction example to read as follows:

As an illustration, on a $100.00 credit card transaction, the card issuer may fund the Member $98.50 after retaining approximately $1.50 referred to as an interchange fee or interchange expense.  The card issuer seeks reimbursement of $100.00 from the cardholder in the cardholder's monthly credit ca