TRANSFORMACIÓN DIGITAL

Fiserv acquires first data for $22 billion

24 de enero, 2019

Tiempo estimado de lectura: 2 minutos

Jeffery Yabuki at the helm of the joint company, with Fiserv shareholders owning 57.5% of the company and First Data shareholders holding 42.5%. First Data CEO Frank Bisignano 

The «highly complementary combination» will offer services ranging from account processing and digital banking solutions to card issuer processing and network services, e-commerce, integrated payments, and the First Data-owned Clover point-of-sale (POS) solution. The firms will also link their merchant and cash management capabilities: For example, First Data’s digital merchant account enrollment capabilities will be integrated into Fiserv’s digital banking solutions. Further, the two firms will invest $500 million over the next five years into new technology for merchant solutions, digital services, risk management, and payments more generally. 

The acquisition reflects an ongoing trend of consolidation in the processing space as firms try to capitalize on the global shift from cash transactions to electronic payments and e-commerce. In 2018, payments merger and acquisition (M&A) activity reached what was likely an all-time high as more firms consolidated to build out emerging business segments or open up new streams of revenue — a trend that’s poised to continue through 2019. For context, the first half of 2018 saw 102 deals worth $46 billion — meaning that the Fiserv-First Data deal is equivalent to nearly half of total acquisition dollars in H1 2018.

 

The firms can lean on each other’s expertise and massive networks to grow and maintain their positioning in the payments space amid ongoing disruption by digital-first firms.

 

A Fiserv acquisition could be a major asset to First Data’s US business.

First Data’s Global Business Solutions (GBS) segment had been struggling thanks to some softness in North American business, mostly as a result of lingering issues with joint ventures (JVs) with banks: Revenue had been declining slightly or flat over the past few years, though in recent quarters it’s begun to rebound. Fiserv’s banking relationships — the firm controls more than a third of the US core banking market — could help the business continue to ride on the recent acceleration it’s been seeing and help lift performance overall as the companies combine, providing a point of synergy.

For Fiserv, access to First Data’s massive network can allow it to scale rapidly. First Data operates in over 100 countries across 6 million businesses and 4,000 financial institutions, and the major processor sees $2.4 trillion per year. Gaining access to First Data’s network, including its POS system, Clover — which processed approximately $70 billion in annualized volume globally during Q3 2018 and recently shipped its 1 millionth device — could open up Fiserv’s services to a major network of merchants globally. This access could help build a global payments giant — First Data is already one of the US’ largest acquirers, for context — that could significantly impact the direction of the industry and competitive positioning for firms across the space in the quarters to come. 

 

Fuente: Business Insider

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