Ladies and gentlemen, thank you for standing by. And welcome to the FIS Fourth Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded.

Thank you. Good morning. And thanks to everyone for joining us today for the FIS fourth quarter and full-year 2020 earnings conference call. The call is being webcasted. Today's news release, corresponding presentation, and webcast are all available on our website at fisglobal.com. Gary Norcross, our Chairman, President and CEO, will discuss our operating performance and share our strategy to continue accelerating revenue growth and maximizing shareholder value. Woody Woodall, our Chief Financial Officer, will then review our financial results and provide forward guidance. Bruce Lowthers, President of Banking and Merchant Solutions, will also be joining the call today for the Q&A portion. Turning to Slide 3. Today's remarks will contain forward-looking statements. These statements are subject to risks and uncertainties as described in the press release and other filings with the SEC. The company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law. Please refer to the safe harbor language. Also, throughout this conference call, we will be presenting non-GAAP information, including adjusted EBITDA, adjusted net earnings, adjusted net earnings per share, and free cash flow. These are very important financial performance measures for the company but are not financial measures as defined by GAAP. Reconciliation of our non-GAAP information to the GAAP financial information is presented in our earnings release. With that, I'll turn the call over to Gary, who will begin his remarks on Slide 5.

Thank you, Nate. Good morning and thank you for joining us. I'm pleased to announce our fourth quarter and full-year results starting on Slide 5. 2020 was an unprecedented year for the world and for FIS, with the COVID-19 pandemic impacting the world on both a human and economic level. Despite the extraordinary year, we leveraged our scale and resources to keep the global economy running while delivering solid results. We generated $12.6 billion in revenue as our balanced solution portfolio allowed us to offset weaker consumer spending trends with strong demand for our Banking Capital Market Solutions. As we close out 2020, all three of our business segments ended the year with record annual sales. This continues to demonstrate that our solutions and technologies are gaining market share around the globe. Our backlog grew 7% organically to $22 billion. This gives us exceptional visibility into our future growth trajectory and drives our confidence in accelerating organic revenue growth for our Banking and Capital Market segments. From a merchant perspective, given the accelerating rollout of COVID vaccines globally and improving trends in economic indicators, we are confident we will see strong merchant revenue acceleration throughout 2021. Our team continues to execute at the highest level as demonstrated by our ability to expand adjusted EBITDA margins by 120 basis points for the full year, despite near-term COVID challenges. We also made great progress with the Worldpay integration, remaining well ahead of plan and exited the year generating more than $200 million in revenue synergies and more than $750 million in cost synergies. With this impressive momentum, we are excited to build on our strengths as we look ahead to accelerating organic revenue growth in 2021.

Thanks, Gary. And thank you all for joining us. Starting on Slide 11, I will touch on our fourth quarter results before transitioning to our forward guidance. We remain excited about the trajectory of our Banking and Capital Market segments and look forward to a significant rebound in growth in our merchant segment as global economies reopen. On a consolidated basis, organic growth was flat during the fourth quarter, and adjusted EBITDA margins expanded by 60 basis points to generate adjusted EPS of $1.62. We expect to exit 2021 generating $400 million in run-rate revenue synergies based on strong client demand for our premium payback solution, growing distribution with new bank referral partners as well as geographic expansion and cross-sell initiatives across the enterprise. These revenue synergies will help supplement our organic revenue growth profile, giving us increased confidence in achieving 7% to 9% organic revenue growth on a sustained basis. We also have line of sight to execute an additional $100 million of operating cost synergies, bringing the net total to $500 million exiting 2021 or 125% of the original OpEx target.

Our first question will come from Jason Kupferberg with Bank of America. Please go ahead.

Hey, good morning, guys. Thanks for sharing some of the Merchant volume data. I think it clearly shows that there are no signs of market share loss here. But I wanted to actually start with the question on the banking segment, obviously, it's still your largest segment. And I wanted to just get a sense of your conviction level in the growth acceleration path for Banking during this year, what are the potential risks there, and any year-over-year comp issues around termination fees or other dynamics we should be aware of aside from obviously the lumpiness and the transaction-based portion of that business?

Yes, Jason. Gary here. That's a great question. We're very confident in accelerating growth in the banking channel. It's clear when you look at the backlog that you've seen acceleration over the last several quarters, which is a testament to our sales engine closing business. So now as we enter into this year, it's really all about implementing that backlog and getting it stood up. I thought it was important to let everybody know that for example, the Modern Banking Platform had three deals already go live this year, which is a good testament of that platform. It's now end market processing. Obviously, we've got a lot of sales behind that that are in the implementation cycle and continue to progress. But we feel good about where we are. It's hard to predict termination fees at this point, but we see no indications that we're going to challenge this with termination fees or growing over a termination fee. So I think it's just going to be good execution on behalf of Banking through the implementation channel. Obviously, we want to continue having our sales engine add into that backlog so that growth acceleration maintains going into 2022, but we feel good about 2021.

Jason, to add a little color on the cadence of the year. We anticipate Q1 to continue to accelerate off of Q4 and continue to see solid growth each quarter over the course of 2021.

Okay. And then just for my follow-up, Woody, just maybe two clarifications for you. First off, have you factored any of the share buyback into the EPS guidance for the year, because it looks like the full-year share count outlook is actually up from what you just reported? And then could you just run us through the first quarter segment level growth expectations? Thanks, guys.

Yes, we have not factored in share repurchase into the EPS; that's an upside opportunity as we go into the market over the course of the year. We think we'll be in market over the entire span of 2021. And we'll continue to pay back debt as well to meet year-end leverage below three turns, but anticipate absolutely driving share repurchase over the course of the year even if that is not in the EPS guide right now, Jason. Along with the segment guide, you're looking at capital markets having a difficult comp in Q1 and then seeing significant growth over the remainder of the year. We anticipate merchant revenue to be roughly flat for Q1 this year with accelerating growth, heavy acceleration in Q2 and ongoing acceleration as we lap COVID pandemic comps.

Thank you. Our next question will come from George Mihalos with Cowen. Please go ahead.

Hey, good morning, guys, and thank you for taking my questions. I wanted to start off with sort of a high-level question maybe for Gary and for Bruce. And that's just when you look at the banking segment and you highlighted cloud-native technology that you're going to market with. Maybe you can just kind of explain to us cloud-native versus cloud-enabled, what does that differentiate for you in the eyes of your customers? What are you able to deliver, whether it be faster or more that would be a differentiator? And then maybe related to that, as you look at the landscape of newer competitors in the market, has that changed at all in terms of the competitive landscape and maybe their ability to sort of move upstream to larger customers?

Yes, George. A great question, and I'll start and then I'll turn it over to Bruce. I think you're hitting a very important point. We were well ahead of the cloud migration as you remember going back five years ago, where we started moving and enabling our capabilities in the cloud and taking advantage of that. The advantage in the market was certainly resiliency, availability, speed, etc. A big advantage to us was lowering our overall cost. We then started building cloud-native applications to sit on the technology framework three years ago. And what you're seeing there is a totally different paradigm shift, and you are starting to see some start-ups in the market, but I would say we're well ahead, whether it's our Modern Banking Platform, our Code Connect platform, our Digital One; all of those are about enabling speed, lowering overall cost, being able to deploy in more componentized architecture and really take advantage of the cloud.

Yes, I would just add on. I think it's right. It's been an evolution for us over the last few years, as Gary just stated. The benefit for us has been able to drive more product into market, and you can see those new products coming to market are fueling our growth rate.

That's great color. Just a quick follow-up on the M&A side. Gary, there are a lot of assets out there. Is FIS willing to do sort of a larger acquisition that will accelerate revenue growth but might be dilutive to earnings over the near term, and then just how are you thinking about targets, whether they be on the merchant side or the banking side?

Yes, I think it's a great question. As you think about it, M&A is going to continue to be an important pillar in our strategy. We're going to continue to look for opportunities that will accelerate our growth further from where we are today. Large transformational M&A, where we think we're extremely good at integrating those kinds of companies. You see the success rate we've had now with well over $740 million of cost out of Worldpay and over $200 million in revenue at this point. So we think there is a way to drive scale and complement that. As we look forward, our aperture can be pretty wide. Our diversification of revenues is an important differentiator for us. You've seen us do very well against our peer group in the middle of a COVID pandemic, which is all due to that diversification of revenue. We will look for things that can drive those kinds of benefits I just described would be important. But we also, given our investment in innovation, our investment in technology, our ability to launch new product and capability; we don't have to do M&A to continue to grow. But if we could find something that accelerates our growth or brings the necessary scale that we're looking for, additive scale, that's our ability to take out costs and integrate that company, absolutely we would do another M&A transaction.

Thank you.

Thank you. Our next question will come from Darrin Peller with Wolfe Research. Please go ahead.

All right. Hey, thanks guys. Your margins targets are back to what you said they would be when you pretty much announced the deal with Worldpay at 45%. And so we get a lot of questions on where margins should be, given the scale of operating leverage in the business combined with investments you're making. So I would love to talk through, first of all, the areas of focus of investments you want to make this year, and then going forward, make sure we're still back on track, Woody I think you said before or Gary, maybe you said earlier that you'd expand margins in years after. Is it back to that 50 to 100 basis points type model of margin expansion going forward? And then maybe again just really focusing on where you guys plan to lay out incremental dollars for investments throughout this year and next?

Yes, thanks. I'll touch on the margin profile beyond 2021. You're right; we're seeing significant operating leverage in the business as we anticipated, as we see revenue rebound. Again, that's roughly 300 to 350 basis points. We are seeing incremental synergies driving us up another 150 basis points with some headwind across the short-term cost actions that we have within the operating leverage component there are some incremental investments there to drive sustained growth. If you look beyond 2021, I think you're right, we're more back into a roughly 50 to 100 basis points a year of annual margin expansion that we feel good about based on ongoing initiatives, operating leverage within the business, and a continued focus on cost initiatives to take costs out of the business long term.

Yes, and let me add a little color on that, Darren. If you think about our investment strategy, we obviously have concluded data center consolidation, which was very successful and we've talked about that a lot. Now it's our opportunity to really move to the next evolution of our technology. As Woody talked about, we'll be investing in our businesses not only in new products but also deploying more new products faster in the market, which is going to be very important. We have a unique opportunity to now start consolidating our platforms and getting significant costs down. So we're very confident in continuing to accelerate that 50 basis points to 100 basis points beyond this year, all while maintaining what we view as really industry-leading investment back in innovation and growth. We've been able to maintain that balance throughout the data center consolidation, and we expect that to be no different with this next wave, but we’re very comfortable with continued margin expansion on an ongoing basis.

Okay. Just one quick follow-up to George's question before I move on. When considering mergers and acquisitions versus capital allocation, you've adjusted your thresholds to three turns at the end of the year, which allows more flexibility for buybacks this year. Does this indicate that you might be holding off a bit on M&A? I know you've mentioned pursuing both types of growth, but also large transformational opportunities. What do you prefer, Gary? Would you lean towards a large transformational deal, given your expertise in that area, or do you have any particular preference? Thanks, everyone.

I think our preference would be the one that drives the most shareholder value at the end of the day, right? Something that fills the gap in our capability, brings the necessary scale that we would need in a particular area that we're focused on. I think that can be translated into whether it's tuck-in or large transformational M&A. I also would tell you, we've been pretty disciplined in our approach over the years. This is not a company that has to do M&A in order to continue to grow and accelerate. When we did the Worldpay combination, we projected a 7% to 9% growth range. This year we're going to be in that range, and we feel comfortable maintaining that range going into 2022 and beyond with margin expansion based on things we've talked about. So, we'll continue looking at things that make sense for the company that drive scale, fill in products, or that we see perhaps the market moving in a direction where we think doing some type of M&A activity would be faster than building it ourselves. All of that will be taken into consideration to ensure that it drives the appropriate shareholder returns.

All right, that makes sense. Thanks, guys.

Thank you. Our next question will come from David Togut with Evercore ISI.

Thank you. Good morning, Gary and Woody.

Good morning, David.

Can you give us a sense of how you expect Q2 to Q4 to play out both in Banking and Merchant Solutions? When we think about the underlying drivers, for example, in merchant of yield, where you've been a little challenged given the pressure on the smaller merchants. So yield, T&E, how that might play out through the year, particularly travel, and any other factors for merchant? And then, taking through banking solutions. Can you give us a sense of when some of these big deals might convert by quarter, you called out $100 million in MBP revenue expected, and any thoughts on sort of demand in Banking Solutions on the cross-sell and up-sell side would also be appreciated?

Yes, I'll touch on the cadence of the growth there, David. And then, we can touch on the MBP impact as well. We anticipate significant growth, particularly in Merchant in Q2, as we lap the impacts. We anticipate the mix to flip the other way, as we've talked about before, and we see volumes coming back in the discretionary areas and in travel and airlines to improve. We certainly do not have travel and airlines returning to pre-COVID levels throughout 2021. We think it will take until 2022 before that actually goes back to 100%, but certainly see outsized growth expectations in merchant in Q2 and Q3 and Q4 of 2021. The remainder of the business, banking again we anticipate acceleration from Q4 into Q1 and then continue to see good solid growth in each quarter. Capital Markets we anticipate actually to accelerate over the course of the year with a difficult comp in the first quarter. On the cadence of EPS for the year, as we've outlined the information around Q1 versus consensus estimates, obviously we think consensus estimates are a little too high for Q1. We think Q2 and Q3 are roughly in line and Q4 is a little low.

Bruce, why don't you take that?

Just adding on to Woody's comment from a demand perspective around the MBP in particular and banking as a whole. We continue to see excellent demand for MBP, as our qualified pipeline has doubled since coming out of the year. We really see a lot of activity in this space, certainly in the large bank category. We feel very positive about continuing momentum in MBP, and on the cross-sell, again I think as Gary mentioned early on in the call, it was a record sales year for the Group in Banking, actually in all three segments. We are continuing to see a lot of opportunities and a lot of success really driving our synergy numbers as well. So a great pipeline for cross-sell.

Yes, a significant indicator of that, David, is I mentioned in the Top 100 financial institutions. We saw a 23% increase in cross-sell, that's significant for the year. And continuing to see that from a pipeline standpoint. We've really differentiated ourselves in the large end of the market in Banking. That level of cross-sell, given the product and new product capability that Bruce and the team are bringing online is a continuing very important indicator.

Understood. Thank you very much.

Thank you.

Thank you. Our next question will come from Dave Koning with Baird. Please go ahead.

Yes. Hey, guys, thanks so much. And I guess my first question just revenue last quarter, I think in merchant was down mid-single digits, it's kind of on a core normalized basis, and it went to negative 9, but volume actually accelerated from 2% to 4%. And like you said, that's very much market growth in volume. Why did that gap widen? Was there something in Q4 specifically that just moved towards high-yielding merchants? Just kind of accelerated in that quarter?

Yes, I think two things really rolled into the fourth quarter, Dave, where volume in non-discretionary continued to increase, which carries a lower yield as we described in the prepared materials. The combination of lower travel into Q4, which we saw, even lower travel into Q4, and the very tight lockdown in the UK impacted retail and restaurants, certainly we saw an impact from that in the fourth quarter that continues to show that separation. If you remember, we saw yields in the second quarter move away from volumes. We saw those come back somewhat in the third quarters as economies reopened. As you saw lockdowns go back in place in the fourth quarter, we saw yields diverge again. There's certainly a trend around that. We can predict and get some expectations around. At the end of the day, it's around when do the economies reopen and certainly either way we are going to lap the COVID items by the end of March this year, regardless. You're going to see easier comps over the remainder of the year, no matter how fast the vaccine rolls out.

Got you. Thanks for that. And then the second question. This is kind of two parts, both short. But what moved out of Banking and Capital Markets into corporate and then secondly margin by segment this year, our Cap Markets and Banking kind of normal 50 bps to 100 bps of expansion and Merchant up like 500 bps, 600 bps, is that kind of how we should think of it?

Yes, a couple of things in there. We did move a couple of things that are non-strategic into the corporate and other. Think about things like the ATM business, for example. Then markets had a smaller piece that was put over in there. We anticipate either selling or winding down those businesses as they don't fit long-term strategically or structurally, not as solid as a reminder of the business. It's about 3% of total revenue. The anticipated impact on 2021 organic growth is a very small amount, less than half a point. With regard to the margins, you're right, we anticipate good solid margin growth in both banking and capital markets over the course of the year, with obviously outsized margin expansion in the merchant business.

Great. Thanks, guys.

Thank you. Our next question will come from Tien-Tsin Huang with JPMorgan. Please go ahead.

Thanks so much. Good morning. You covered a lot of stuff here. I just wanted to ask about merchant. As the world reopens here and we see new business formation come back, do you feel confident you have the right distribution channels to capture the shift in where the merchants are going? It seems to be a shift for example to marketplaces and software led sales and integrated payments that kind of thing. Do you think you have enough muscle in those areas as we reopen?

Tien-Tsin, I think it's a great question. I think we actually do have good muscle in that space. We've done a really nice job increasing our direct sales force. We also had a lot of success last year, increasing our partner-led sales. Many of our partner growth areas were up 4 times and 5 times over the prior years, whether that's banking referral or even some of our ISD referral programs, which will pay huge dividends to us going into the recovery. I believe we're well positioned to take advantage of it. We also have made a lot of investments in our technology as well, which really allows for more rapid onboarding of merchants. So all of those things would be great indicators of us being in a really good position on the recovery.

Okay, great. And just a quick follow-up then, just with all the retail trading going on that we've seen recently, any impact on your Capital Markets business and also just a clarification on the margin side, are we capturing an unusual amount of implementation cost this year on margin that you might get relief from next year? Just want to make sure I caught that. Sorry for two quick follow-ups. Thank you.

I don't think you're seeing any significant impact on the trading side based on recent activity. Regarding margins, a portion of those implementation dollars will be capitalized on the balance sheet and amortized over time. Therefore, we do not expect a substantial increase from that. It will be more in the usual range of 50 to 100 basis points a year due to normal operating leverage and our focus on cost reduction.

Thank you.

Thank you. Our next question will come from Ashwin Shirvaikar with Citi. Please go ahead.

Thank you. My question is about overall growth. In Q4, the expectation has shifted from 7 to 9 to now 8 to 9. Are there potential underlying improvements in the Q4 results that could lead to a two-based mining? It seems corporate is now excluded from the baseline definition, and there are also foreign exchange factors to consider. Could you explain what changed? Additionally, regarding the underlying improvements, could you break down what is coming from better synergies compared to net new sales?

Yes, I think you got a combination of things there Ashwin. First and foremost, the new sales we've been talking about from banking and the growth in the backlog is what's driving us to accelerating growth expectations in that segment into the mid to high single digits. We outlined an accelerated expectation for Q4 and delivered on that. As I described earlier in the call, we anticipate continued acceleration over the remainder of the year. That's pretty solid there. We've got a difficult comp in cap markets, but we anticipate accelerating growth into the mid-to-high, low-to-mid single digits in cap markets with accelerating growth over the remainder of the year. I think that is a combination of the SaaS story we've been talking about, where we're seeing more visibility into the revenue and less license sales and ongoing SaaS-based subscription type revenue in the Capital Markets group. And then merchant, obviously, we're looking at a COVID rebound as we lap comps and we continue to see economies reopen and some of the volumes come back. If you look at the corporate and other component, again, it's about 3% of overall revenue. The impact of that moving in is less than half a point actually of 2021. So it’s a very minuscule impact, but we are going to look to monetize and/or wind down some of those things that just aren't going to be a strategic fit on a go-forward basis.

Got it. And then on the merchant piece, are you actually incorporating a second half rebound in travel, retail, restaurants, and the discretionary part? Or is that kind of the upside on the range? And as that comes back, the flip of that question on the margin side is, could you talk a little bit about how we should think about yield progression through the course of the year?

Yes, we do anticipate some rebound on some of the discretionary verticals that we mentioned in the material. We do not see travel coming back 100% in 2021. We've got that kind of model backing into 2022 to be back at pre-COVID levels. We certainly do anticipate restaurant and retail to come back over the course of the year, with obviously seeing Q2 probably with the highest level of growth, as it's the easiest comp based on what happened last year in Q2. So yes, we have an expectation of it growing in there, Ashwin, but I wouldn't say that that's what gets us to the high-end or the low end of the range, but it certainly is an area that we need to continue to monitor over the course of the year. We do have modeled in obviously recovery coming into Q2, Q3 and Q4 this year.

Got it. Thank you for all the color, this is great.

Thank you. Our next question will come from Matt O'Neill with Goldman Sachs. Please go ahead.

Yes, hi, good morning gentlemen. Thanks for taking my question. I was hoping we could follow up on David's question a little bit more specifically on the Modern Banking Platform. There are three that are now live and you're expecting $100 million in revenue for 2021. Can you just parse for us if the $100 million is explicitly from those three that are live, or does it incorporate additional wins that have been announced but haven't yet gone live in that number? And then can you also just give us a little bit of the high-level kind of glide path talking about, and just remind us again how you kind of get started with the modern banking win, and then what the longer-term kind of cross-sell and up-sell opportunities look like, and if there's been any sort of traction with that obviously, understanding we're only with three live and kind of in the first year here?

I'll take the revenue question and then let Gary and Bruce chime in on the model around it. With regards to the $100 million we talked about, certainly includes the three that are live now but also would include some level of expectation of conversion over the course of the year of previous sales we made throughout 2020. So there is a ramping, if you will, of the MBP over the course of 2021.

Yes, that’s exactly right. If you look at the $100 million commitment, what we're seeing is a steady ramp over the year with implementations while also, as Bruce talked about, our backlog has more than doubled on that front. So we're able to drive additional sales. The nice thing about the business being recurring in nature is you'll grow from there going into 2022, so it will continue to accelerate with more pipeline being added. From a cross-sell standpoint, Bruce, do you want to take that?

Yes, just like all of our core platforms, it really is the center of a lot of our cross-sell activity. So MBP will follow that same trend where we have the opportunity to sell digital front-ends to the application, and we'll have a whole suite of products. We have over 20 products on average with our core customers today. We expect that we'll be able to continue to drive new product into those MBP clients.

Yes, to build on that, we talked about it in prior calls. Our focus on the lending side over the next several years, we build these solutions in a very agile way as you would expect, being a modern technology and being cloud-native. The reality is, we did make our first drop on our unsecured lending. So we're starting to build out those capabilities. That will also be a cross-sell opportunity in the back half of this year and going into 2022. But to Bruce's point, keep in mind that becomes the center of all of our cross-sell to drive our back-office services; the list goes on and on. As you've seen, last year we saw a huge increase, once again in our top 100 cross-sells at 23%.

Got it. Thanks very much. As a quick follow-up to that, are these predominantly from banks that had been in-sourced or competitive takeaways or a good mix?

Yes, right now early on, we consistently see the early adopters, and we want to make sure that everybody understands, we're just getting started on this. As you start thinking about people really moving to cloud-native core banking, a lot of it has been either on in-house built systems or very, very old legacy technology today. What we're starting to see together in the pipeline is, as we launch now with some of the customers, you've got another wave of people now really starting to evaluate existing technology that would be more modern in nature, but still not cloud-native and taking advantage of that. But the early adopters have been primarily coming off more in-house developed systems or systems that are multiple decades old.

That makes sense. Thanks so much. I'll hop back in the queue.

All right, thank you.

Thank you. Our next question will come from Timothy Chiodo with Credit Suisse. Please go ahead.

Thanks a lot for taking the question. We've covered a lot of great ground here. I want to see if we can shift gears over to Premium payback. Clearly, that was one of the earlier and larger revenue synergies. It sounds like you're making great progress there. You've announced Walgreens, BP, PayPal. Maybe you could just give us a brief update on how that program is doing? Maybe size the revenue contribution expected for 2021, would appreciate any added context there?

Yes, this is Bruce. I'll just jump in on the overall program, and I'll leave revenue expectations to Woody, but the program itself continues to see a lot of positive momentum. We continue to see a very, very strong pipeline. The only impact to premium has been through COVID, right? So it is a transaction that is driven by retail purchase. COVID is going to have some impact there. But we expect that product to really rocket forward and continue to move. It's really met as delight, right? It's the customer's delight, the retailer's delight, and the financial institutions. It's just a positive win for all three. There are very few products that come to market that have that kind of success.

We haven't given a specific number around the product-related revenue for competitive reasons, but I can tell you it's built into the confidence level we have in the acceleration of revenue synergies up to $400 million exiting 2021.

All right, great. And the brief follow-up is still related to Premium payback. Could you just talk a little bit about how that mix could evolve in terms of in-store and e-commerce? Clearly, PayPal being a partner helps with that, but anything you could talk around how we could start to see that show up on websites a little bit more?

Yes. So as we move forward with Premium payback, it really was not designed to be necessarily in-store or online. It was really just about, as I said, a surprising delight for consumers that shows up at the checkout and allows you to pay for a portion of your transaction through the points that you've aggregated. It really brings financial assets that were hard to access and delivers them to the consumer, allowing them to monetize those assets they’ve acquired over time. Whether it's online through someone like PayPal or some of our e-commerce clients or in-store, it just shows up at the point of sale or whatever that may be, whether it's your mobile phone or in-store, and again it's the surprising delight that consumers love about it.

All right, great. Thank you for that context.

Thank you. And today's final question will come from Brett Huff with Stephens. Please go ahead.

Good morning, Gary, Woody, Bruce and Nate, hope you're all well?

Hey, Brett.

Hey, Brett. We're doing great.

Good. Two questions, one, I just want to make sure in all the commentary on the growth, Woody, that you gave us that kind of mid-point is call it 50 basis points above the long-term growth. I'm trying to sort through the puts and takes. I understand that some have moved into corporate and that may have given us a little benefit of growth. But also, I'm trying to figure out where beyond that is the above, kind of long-term growth. Is that more of an easy comp from a merchant point of view or is it more confidence in the Banking and Modern Banking Platform? As you guys sat down and thought about how do we got, what dodged over the long-term kind of ranges, or mid-point, and that's a little higher?

Yes, I think, first of all, the impact of moving some stuff into corporate and other was a less than half a point; it's not much at all in terms of our expectation. I would tell you that our confidence level is really in banking and the backlog around banking and seeing it accelerate. We've moved that up to mid-to-high single digits. You saw 5% in Q4, we anticipate that to accelerate into Q1. Moving that into mid-to-high single digits is a good bit of the confidence. We have previously talked about capital markets in the low single digits. We've actually kind of moved that up slightly into low-to-mid single digits. We anticipate capital markets to see better growth than historical this year as well. So, I think those are the two biggest items that have kind of moved our confidence level up from the 7 to 9 to 8 to 9 specific '21 guide versus outsized merchant. Merchant we just anticipate mid-to-upper teens and it could be higher than that if we see rebound faster. We don't anticipate anything below mid-teens out of merchant this year in any scenario that we have.

Great. Just a broader follow-up. You mentioned the importance of continued organic investment, and Gary, you've pointed out in previous calls that significant funds are being allocated to the modern banking platform and new SaaS technology. It appears that the costs for effectively competing in banking technology and payments are increasing, creating an arms race. As you consider the capital intensity of the business and the potential for margin expansion of 50 to 100 basis points, how do we navigate the need to compete effectively while still aiming for scale advantages and demonstrating margin growth to investors?

Well, honestly, Brett. I think it's a great question. I think you know whether it's an arms race or not. I hope what you're seeing is FIS is leading that. We started our cloud-based deployments five years ago. At this point in time, we're well in excess of 70% of all of our compute now on the cloud, and that will trend over 80% over the first half of this year. If you look at our investment, Woody highlighted almost $1 billion of capital a year. Keep in mind that is driving 60 new products in market, the Modern Banking Platform, retooling our payments one initiatives, Digital One, cloud-native Omnichannel platform deployment, as well as all the things we're doing in Capital Markets in Merchant with our Access Worldpay gateway and others and also NAV conversion. I think we're balancing it very well and we're doing that because these new technologies not only allow you to compete on the revenue front, but they should and will drive costs down. If you're driving true AI into your organization, you're going to eliminate costs. There's no way around it. If you automate, you're going to eliminate costs. Our balancing act over the last several years, as we went through the cloud migration that's now complete, is the exact same for our platform rationalization as well as new product launches, while balancing. We think we're in a really good position with about 8% of our revenue being deployed back into capital. Keep in mind, Woody also talked about our free cash flow converting. We will have our debt competitive reloaded by the end of this year. There's no sense in paying our debt structure down faster, so that you can give us additional capital to deploy across our strategy, wether its increasing share buybacks, increasing M&A or increasing new product capabilities to continue to drive our organic revenue growth in those upper single digits and then moving from there.

Great. I appreciate the perspective, guys.

Thank you. I want to provide some closing thoughts before we end the call. While the one-year anniversary of the COVID-19 pandemic isn't something we may celebrate with joy, I strongly believe there are reasons to applaud our collective perseverance and our passion for standing up and doing what's right. In this same time period dominated by daily challenges of the virus, we stretched ourselves to evolve, to think, and deliver differently. At FIS, we took these challenges head-on and I firmly believe that we are a stronger, more resilient company than we were a year ago. As the backbone of the global financial ecosystem, we ensure that transactions and accounts continue to be processed 24/7 while we re-imagined our system implementation processes, enabling us to implement systems in a 100% virtual environment. We rapidly implemented a real-time lending platform for our financial institution clients, streamlining and speeding the processing of more than 225,000 PPP approved loan under the CARES Act. So far in 2021, we've expanded our reach and successfully processed nearly $8 billion of PPP loan applications for more than 68,000 US merchants and small businesses. We also managed to rollout and distribution of expanded EBT benefits under SNAP in 28 US states and territories, helping over 10 million children. Just as importantly, we doubled down on our commitments to support our communities by executing global get-back programs, to know PP&E equipment and prepaid cards to support our front-line healthcare workers. We also recognize our responsibility to push for sustained social change, both domestically and globally. As you have heard us mention before, increasing inclusion and diversity, financial inclusion and climate change initiatives are important goals for all of us at FIS. Building an environment that enables our colleagues, clients, and communities to thrive demonstrates how we are leveraging our technology and innovation at scale to create lasting change that benefits everyone. To our colleagues, thank you for all your hard work and ongoing commitment to our clients, communities, and each other. And for everyone else on the call, thank you for joining us today and for your ongoing support. If you have any follow-up questions, please reach out to our Investor Relation team. This concludes our Q4 earnings call. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.