Fiserv Inc. is an acquired company since its 2019 merger with First Data Corp., and on Tuesday its management said its latest acquisition will accelerate the company’s entry into the growing market for digital banking services delivered not locally but through a cloud. configuration. The $650 million deal for Finxact Inc., which will allow Fiserv to swallow the part of the business it does not already own, “will accelerate our delivery of digital solutions to existing customers, but also banking services as a service”. Fiserv chief executive Frank Bisignano said in a call with stock analysts to discuss his company’s fourth-quarter performance.
When the deal closes later this year, Finxact will add to a series of purchases that Fiserv has executed since Bisignano took over in 2020, including those for SurPoint and SpendLabs, both completed last year, and that for BentoBox, which is expected to be integrated into Fiserv’s processing capabilities for the 200,000 restaurants it serves. On that last note, Bisignano on Tuesday announced an agreement with Google that will help customers find and order at restaurants served by Fiserv.
Fiserv is also mindful of the need to act quickly to integrate acquired companies into its operations. “We’re moving at a faster speed than we traditionally have in integrating acquisitions, and we’re moving at a much faster speed in integrating software,” said Bob Hau, chief financial officer.
During the past quarter, Fiserv’s merchant acquisition unit continued to be well served by its Clover and Carat point-of-sale technologies, the former aimed at small merchants and the latter at enterprise sellers. The two, Bisginano said, are “key drivers of merchant acceptance revenue growth.” Clover reported 50% year-over-year growth in the fourth quarter, reaching $201 billion in gross payment volume. The number of transactions for Carat last year increased by 51%, with growth of 26% in the fourth quarter. This technology, Bisignano added, is “well positioned to drive cash out” for operations such as ride-sharing companies.
At the same time, the merchant unit added to its list of independent software vendors, major carriers that integrate payment capabilities with enterprise software. Transaction volume through this channel increased 64% in the quarter and 76% for the year, according to figures released by Fiserv on Tuesday.
In total, the acquisitions segment, the largest of Fiserv’s three operating units, saw 22% year-over-year growth in dollar volume in the quarter and an 18% increase in deals, the company said. Revenue for the unit totaled $1.7 billion for the quarter, up 18%, and $6.48 billion for the year, up 20%.
Along with Fiserv’s other two units (Financial Technology and Payments and Network), the company reported revenue of $4.26 billion for the quarter, up 11% year-over-year. Revenue for the year was $16.23 billion, an increase of 9%.