Processing and banking services giant FIS Inc. said revenue from its digital-only merchants increased 28% in the first half of the year, while its merchant solutions overall experienced a 12% growth in revenue in the second quarter.
Jacksonville, Fla.-based FIS said continued e-commerce growth aided to that expansion. And it expects that to continue as many merchant segments rebound, such as travel and airlines, and it markets small-business e-commerce services that derive from its Payrix Solutions LLC acquisition earlier this year.
Its diverse client portfolio, recent business wins, and the Payrix acquisition are contributing to FIS’s performance, Gary Norcross, FIS chairman and chief executive, told analysts during a conference call Thursday. FIS, known for its e-commerce business especially among larger merchants, says Payrix enables it to expand into small business e-commerce.
“Payrix continues to go phenomenally well for us,” Stephanie Ferris, FIS president, said during the call. “With that acquisition, we now have access to card-not-present transactions at small businesses. It’s continuing to take massive share in the marketplace.”
Along these lines, Ferris said FIS recently won the contract to service Block Inc.’s Cash card. Launched in 2017 as the Square Cash App card, it enables users to access their stored funds at the point of sale to make purchases. It is not known which company had previously serviced the card. “We won that business very competitively,” she said.
As for merchant segments, FIS expects travel and airline transactions to remain strong. “Travel has been rebounding for us in the past couple of quarters,” Ferris said. “We’re not expecting anything in the back half of the year to be impacted.
Analysts also asked how FIS views the recent bill introduced in the U.S. Senate to enable merchant routing for their credit card transactions. Norcross suggested that if the regulation was changed, it would be a positive for FIS. “Regulation changes are always a really big positive for us,” he said. “Assuming there’s a change, we’ll look at ways to help our customer with that. We’ll continue to watch it as it evolves.”
Financially, FIS posted second quarter revenue of $3.7 billion, a 5.7% increase from $3.5 billion in the same quarter a year ago. Its net income of $280 million decreased from $342 million in the year-ago quarter.
FIS also announced its chief financial officer, James “Woody” Woodall, is retiring Nov. 4 to be succeeded by Erik Hoag, its deputy chief financial officer.