Fiserv Is Set to Offer Payments That Let Cardholders Select the Funding Source

The big processor Fiserv Inc. said Wednesday morning it will offer so-called programmable payments to its financial-institution clients through a partnership with IncumbentFI, a San Francisco-based technology provider.

The technology allows cardholders to attach a variety of funding sources to a single card and choose one for individual transactions. In some cases, they can select the funding source for a limited time after the transaction. The new program with Incumbent FI could also include the ability to select particular rewards programs and buy now, pay later programs, Fiserv said.

Fiserv characterizes the technology as a “switch” that can re-route payments after they’re authorized but before processing. “Programmable payments allow for flexible configurations, which enable our clients to deliver the personalized payment experiences consumers are looking for,” Sunil Sachdev, head of fintech and growth at Brookfield, Wis.-based Fiserv, said in a statement. “These modern capabilities will give card issuers the ability to design cards with truly distinctive features that can launch in days, with built-in intelligence like delegated authorization and just-in-time funding.”

Bangor Savings Bank, a community bank in Maine is working with IncumbentFI to introduce programmable payments, according to Fiserv. The bank’s parent, Bangor Bancorp, along with a San Francisco-based technology company called Paywith Worldwide, formed IncumbentFI as a joint-venture company.

Financial institutions don’t need to re-issue cards to adopt the technology, according to IncumbentFI, as the programmable feature can be “layered on” to existing portfolios. Examples of how cardholders can use the feature include designating rewards points to pay for a restaurant meal or a health-savings account to cover a purchase at a drugstore. Users can also change the funding source after the transaction for a “set amount of time,” the companies say. In any case, the capability is seen as a means by which issuers can retain cardholders and boost usage, Fiserv and IncumbentFI say.

Fiserv’s fintech division recorded $1.58 billion in revenue in the six months ended June 30, up 6% year-over-year. The unit now accounts for 19% of the company’s revenue.