A Fast-Expanding Clover Provides a Hot Engine for Growth at Fiserv

Fiserv Inc. has been an acquisitive payments processor in recent years, but it’s a deal the company concluded nearly five years ago that is energizing growth at the company. Fiserv’s $22-billion acquisition of First Data Corp. in the summer of 2019 brought Clover, a set of point-of-sale technologies that today are doing much to drive revenue growth at the Milwaukee, Wis.-based company.

And now Fiserv’s top brass is twisting open that revenue spigot. “We are launching multiple new Clover products this year,” Fiserv’s chief executive, Frank Bisignano, declared early Tuesday while speaking to equity analysts. The new products will include a new Clover device, he said, that will arrive by mid-year.

With the volume the Clover system is racking up, the POS system is clearly at the top of the company’s priority list. It accounted for enough payment volume in the first quarter to reach $274 billion in annualized volume, up 19% from the same quarter last year, according to numbers the company released early Tuesday. Fiserv doesn’t report Clover’s revenue, but early Tuesday it said this metric had risen 30% in the quarter year-over-year.

But Bisignano doesn’t want Fiserv to rest on Clover’s laurels. Clover is deep in restaurants and related markets, but “we have work to do to finish restaurants,” he said, adding, “you’ll see us go deeper into professional services, [and] we have good demand outside the U.S. It’s an open platform we continue to add software to.”

Partly because of Clover’s growth, Fiserv reported its merchant solutions unit had notched $2.25 billion in March-quarter revenue, up 13% from the same period last year.  Revenue from small businesses accounted for two-thirds of the at revenue and grew at a 16% rate, Fiserv reported.

The company’s financial solutions unit, which includes its peer-to-peer payments, ATM networking, and banking-software services saw its revenue creep up 2% to $2.29 billion, with digital payments leading the way at 5% growth, to $920 million. Fiserv saw 45% growth in transactions on the Zelle P2P network in the quarter, Bisignano said, while adding the company signed more than 500 financial institutions for the Federal Reserve’s FedNow network and The Clearing House Payments Co.’s Real Time Payments system. He did not provide a breakdown.

Since taking over as CEO, Bisignano has not hesitated to acquire properties he wanted to fill needs at Fiserv. Early Tuesday, he indicated that appetite is still strong, though with qualifications. “Our appetite to acquire properties is always high,” he said, “on the other hand, we want to be very, very clear how it fits our strategy. We’re thinking through [how we’re] using our shareholders’ dollars as effectively as possible.”

For the quarter, Fiserv recorded adjusted revenue of $4.54 billion, up 7%, while organic revenue—revenue apart from recently acquired properties—grew 20%. Adjusted operating income totaled $1.18 billion, up 26%.