POS Technology Helps Deliver Double-Digit Growth for Fiserv’s Acquiring Unit

The merchant-acquiring business helped deliver a strong quarter for Fiserv Inc. as the big processor reported Wednesday its ninth consecutive period of organic revenue growth, or growth stemming from existing rather than recently acquired businesses.

The Brookfield, Wis.-based company singled out its Clover point-of-sale technology for special mention as a growth driver, as the point-of-sale technology saw its revenue climb more than 20% in the quarter ended June 30 on payment volume that totaled $267 million annualized, up 15% year-over-year. That’s enough for the unit to account for about one-quarter of Fiserv’s revenue, Fiserv chief executive Frank Bisignano told equity analysts during a conference call early Wednesday. Clover is “on track” to hit 35% of Fiserv’s revenue by 2025, he added

A major player in the hotly contested restaurant market, Clover “has only scratched the surface,” Bisignano said. The POS product is one he’s managed for about a decade, having acquired it for $56 million in 2012 from Sutter Hill Ventures when he was running First Data Corp. First Data became part of Fiserv in 2019. Despite that decade-long run, Bisignano contended Clover’s growth within Fiserv is “in the super-early innings.”

Part of that momentum stems from Fiserv’s efforts to sign up independent software vendors, or ISVs, Bisignano said. The company signed 40 during the quarter. “Momentum is beginning to build with ISVs,” Bisignano added. ISVs, or independent software vendors, are businesses that assist sellers by weaving payments capability into financial software.

“We continue to have acceleration in our ISV business,” Bisignano said. “This is a long, long opportunity set ahead of us, and we see a continuing acceleration in Clover’s growth.”

Overall, the merchant-acceptance unit at Fiserv saw its revenue rise 9% in the quarter year-over-year, to $2.07 billion. The segment remains the largest of Fiserv’s three units, with Payments and Network recording $1.65 billion in revenue, up 9% year-over-year, and Financial Technology notching $784 million, down 1%.

The Payments and Network division signed more than 80 card issuers for card-not-present processing in the quarter, a move that capitalizes on a Federal Reserve clarification earlier this year that requires issuers to enable at least two networks for card-not-present transactions as well as card-present. The rule took effect July 1. Bisignano was reticent about making predictions for this business. “We’re guarded about this,” he said. “It’s not even early innings, it’s the first at-bat.”

For the quarter, Fiserv reported adjusted revenue of $5.51 billion, up 6% year-over-year. Revenue for the first half of the year totaled $8.79 billion, an 8% rise. Organic revenue grew 10% in the quarter, with the Acceptance unit notching a 14% increase, followed by Payments at 9% and Fintech at a negative 1%.