An Acquisitive Fiserv Adds Finxact for Cloud-Based Digital Banking Services

Fiserv Inc. has been an acquisitive company since its merger in 2019 with First Data Corp., and on Tuesday its top management said its latest acquisition will accelerate the company’s penetration of the growing market for digital-banking services provided not locally but through a cloud configuration. The $650-million deal for Finxact Inc., which will let Fiserv swallow the part of the company it doesn’t already own, will “accelerate our delivery of digital solutions to existing clients, but also banking-as-a-service,” said Fiserv chief executive Frank Bisignano during a call with equity analysts to discuss his company’s fourth-quarter performance.

When the deal closes later this year, Finxact will add to a string of purchases Fiserv has executed since Bisignano took over in 2020, including those for OnDot 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 the latter note, Bisignano announced Tuesday a deal with Google that will help customers find and order from restaurants served by Fiserv.

Nor is Fiserv neglecting the need to move quickly to fold acquired companies into its operations. “We are moving with a faster speed than we traditionally have to integrate acquisitions, and we’re moving at a much faster speed to integrate software,” said Bob Hau, chief financial officer.

In the latest quarter, Fiserv’s merchant-acquiring 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. Both, said Bisginano, are “key drivers of merchant-acceptance revenue growth.” Clover clocked 50% year-over-year growth in the fourth quarter, to $201 billion in gross payment volume. Transaction count for Carat last year grew 51%, with 26% growth in the fourth quarter. This technology, added Bisignano, is “well-positioned to drive disbursements” for operations such as ride-share companies.

At the same time, the merchant unit added to its roster of independent software vendors, the key operators who integrate payment capabilities with business software. Transaction volume through this channel grew 64% in the quarter and 76% for the year, according to numbers Fiserv released Tuesday.

All told, the acquiring segment, the largest of Fiserv’s three operating units, recorded 22% year-over-year growth in dollar volume in the quarter and an 18% increase in transactions, the company announced. Revenue for the unit totaled $1.7 billion for the quarter, up 18%, and $6.48 billion for the year, up 20%.

Together with Fiserv’s other two units—financial technology and payments and network—the company recorded $4.26 billion in revenue for the quarter, up 11% year-over-year. Revenue for the year was $16.23 billion, a 9% increase.