Led by its merchant-acquiring unit, Fiserv Inc. in the quarter ended Sept. 30 continued its rebound from the wallop it took from Covid-19. The Brookfield, Wis.-based company reported total revenue, adjusted for its First Data Corp. acquisition in July 2019, of $3.59 billion for the quarter, down a slight 1% from the $3.62 billion the company reported on a combined basis for the same period last year.
But merchant acceptance is far and away the company’s driver, with growth of 6% in the period. That far outdistanced the numbers posted by Fiserv’s other two units, payments (card issuing on behalf of client banks) at 1% and fintech (financial technology), which showed no growth, according to numbers the company released late Tuesday ahead of a conference call with equity analysts. “Merchant acceptance is leading the way,” noted Robert Hau, Fiserv’s chief financial officer, on the call.
Contributing to the growth for the merchant-acquiring unit was a strong performance by the company’s Clover point-of-sale technology business, which Hau said is registering revenue growth at a 30% annual rate. That’s coming, in part, from the unit’s response to Covid. In May, Clover introduced a scan-to-order capability that allows restaurant customers to order from their table by scanning a QR code. Other companies have piled on to this opportunity, as well. Shift4 Payments Inc. in October launched an ordering capability based on QR codes, for example.
Also helping expand Fiserv’s acquiring business is its recruitment of sales partners. More than 130 independent software vendors have been signed up so far this year, noted chief executive Frank Bisignano. He expects the steady growth in acquiring to continue unmolested by a return of Covid-related restrictions. “Our outlook does not contemplate a second wave of shelter orders,” he told the analysts.
In other areas of the company, Bisignano and Hau celebrated a recent win by noting the decision by private-label card processor Alliance Data Systems Corp. to outsource its processing to Fiserv. The move, announced last week, will bring the volume generated by the country’s fourth-largest store card processor. “I think of this as having long-term organic growth possibilities,” noted Hau.
Still, while total adjusted revenue for the quarter very nearly climbed back to the year-ago level, Hau conceded that “we’re not where we were pre-Covid.” Merchant acceptance, at $1.46 billion, came in slightly ahead of last year’s $1.44 billion for the third quarter on an adjusted basis. But fintech fell $8 million short of last year’s $735 million and payments came within a whisker of equaling the $1.4 billion notched in the same period in 2019.