Fiserv’s Acquiring Unit Rides to New Heights on the Back of Tech Like Clover and Carat

If there are lingering doubts about a big comeback for the big merchant processors, Fiserv Inc. may well have dispelled them early Tuesday with results showing 43% second-quarter growth in revenue year-over-year for the company’s merchant-acceptance unit. That performance comes on top of a near-doubling in payment volume for the company’s key Clover point-of-sale technology.

The acquiring unit, now Fiserv’s largest in terms of revenue, is so far dispelling concerns about how fast the company can recover from the impact of a pandemic that isn’t over yet—and indeed could be gaining some momentum from a new variant.

For the April-through-June quarter, the Brookfield, Wis.-based processing giant “saw strong recovery in the United States with uneven recovery around the world,” pronounced chief executive Frank Bisignano during a call with equity analysts.

In the key independent software vendor market, where technology companies embed payments capability into releases they’re preparing for vertical markets, Fiserv saw a 122% growth in volume for the quarter compared to the prior year. That was driven by 53 new ISV signings, bringing to 95 the number signed for the year so far, Bisignano said. As with many operating statistics, the company did not release absolute figures.

Fiserv’s progress wasn’t confined to small merchants. Carat, a unit the company launched in November to sell coordinated digital payments and related commerce services to large companies looking to serve Covid-wary consumers, racked up gains in the quarter, as well. Ten of the country’s largest convenience-store chains are now using Carat, along with nine of the 10 biggest grocers, Bisignano said. All told, the unit has generated $2.5 billion in payment volume so far this year.

In total, the merchant-acceptance division recorded $1.67 billion in revenue for the quarter, bringing its first-half revenue to $3.06 billion, up 22% over the first half of 2020. That was enough to overtake Fiserv’s payments and network segment, which logged $1.43 billion in revenue for the second period, up 7%.

Still, the payments and network unit, which includes the Star and Accel debit networks, reported a growth of 31% in debit transactions and 94% in Zelle person-to-person payments. Fiserv also closed on its acquisition of SpendLabs, an issuing platform for commercial cards, which it is pairing with technology from OnDot, a firm Fiserv acquired early this year that lets users turn payment cards on or off, according to considerations of risk or preferred usage.

Including the financial-technology segment, the company reported total revenue of $4.05 billion for the quarter, up nearly 17% year-over-year. That brings revenue for the year’s first half to $7.8 billion, up 8%.