Fiserv now allows merchants using the Clover point-of-sale platform to accept PayPal and Venmo payments, a move that serves the company's continuing focus on full omnichannel experiences for its merchants.
The agreement, announced Tuesday, improves merchants' ability to offer touch-free payments using the PayPal or Venmo QR code wallets. The technology will be in place at various venues, including the Phoenix Suns Arena.
PayPal "is an important offering for our merchants, as consumer preferences continue to shift toward touch-free transactions," Frank Bisignano, Fiserv's president and CEO, said Tuesday during the company's earnings call.
The PayPal agreement signals how sales and integrated offerings grow together, giving the Brookfield, Wis.-based company confidence the coming quarters will continue to show a transformation in digital payments and merchant acquiring, Bisignano added.
Fiserv inked another key agreement this week, landing a 20-year exclusive merchant acquiring agreement with Caixa Economica Federal, one of the largest banks in Brazil.
Caixa Economica has more than 26,000 sales outlets in Brazil and a broad presence throughout the country, making it "one of the largest wins for our company in Latin America and one of the largest globally," Bisignano said.
Fiserv would process all in-store and e-commerce transactions through the Caixa-branded POS terminals, while also providing the online gateway services. The bank has the largest client base in the country, with more than 146 million individual and corporate customers and about 107 million digital banking customers.
Fiserv reported first-quarter net income of $304 million, down from $392 million in the first quarter of 2020.
Revenue was $3.05 billion, down from $3.075 billion a year earlier. Adjusted revenue was $3.56 billion, or 2% over adjusted revenue in the first quarter of 2020.
But the company's other measuring sticks delivered the marks Fiserv needed to illustrate momentum in digital payments and merchant acquiring.
Clover's gross payment volume grew 36% year over year, to $141 billion annualized. The Carat platform for e-commerce and omnichannel digital experiences delivered 24% growth in e-commerce transactions compared to the prior year, and omnichannel transactions such as order-ahead and pickup in-store grew 122% year over year.
"We won a record 51 new enterprise-level e-commerce clients in the first quarter, including Cost Plus World Market," Bisignano noted. Fiserv's arrangement will provide e-commerce gateway, POS hardware devices and value-added services like tokenization for the U.S. speciality retailer.
Fiserv also began testing a digital payout experience for insurance claims through State Farm, and also enabled online SNAP payments during the pandemic for the U.S. Department of Agriculture.
International additions included acquiring services in unattended POS hardware for Selecta, one of Europe's top self-service retailers offering coffee and food items.
Fiserv signed 42 new independent software vendor partnerships in the first quarter, which helped the company increase ISV revenue 34%.
Fiserv also pointed to the benefits it has gained from closing the acquisition of
"Through Ondot, we can enable our FI clients to offer their cardholders personalized, real-time digital experiences, driving cardholder engagement and spend," Bisignano said. "We expect continued adoption of these digital solutions across our client base."
The company landed 34 new merchant bank clients during the quarter, bringing the Clover platform and Carat online services into the merchant acquiring mix.
"Half of these wins were competitive takeaways," Bisignano noted. "The pipeline remains robust through the rest of 2021."
Fiserv brought the Clover product line into the company as part of its $22 billion acquisition of First Data in 2019.
The first-quarter acquisitions of Ondot Systems and Radius8 enhance the Carat online services platform, combined with an agreement to acquire
Discussing payments and network trends, the chief financial officer, Robert Hau, said Fiserv's transaction volume grew steadily, though it did suffer setbacks early in the first quarter when the southern states in the U.S. dealt with major weather issues.
"Recovery from the pandemic, as vaccines spread in the U.S., we are seeing commerce retail picking up," Hau said. "Restaurants are starting to pick up in a meaningful way, yet still down year over year in a meaningful way; but they are starting to improve sequentially pretty nicely."
Fiserv noted 16% growth in debit transactions as well as more than 100% growth in Zelle P2P transactions, and its number of Zelle users more than doubled.
"We continue to love the acquisition of Ondot and the ability to provide additional digital services for card controls and card activation to our overall channel," Hau said. "We see that as a significant growth opportunity, not just to provide that particular capability, but that as an overall part of our solution."
Hau said he expects the credit issuing business to accelerate in late 2021 and into 2022, as effects from the pandemic further subside.
"We believe in the next year or two, the payments segment can grow 5% to 8% and we think this year we will be at the upper end of that as we head into the second half of the year and see the full-year result," Hau said. "I think we are in a great spot and will see some continued growth in our digital side of payments and see improvement in bill pay and credit issuing, particularly private-label in the second half."
