Fiserv’s Clover Logs 30% Revenue Growth, Zelle Transactions Surge 44%

Fiserv’s most recent results show momentum as smaller businesses and financial institutions (FIs) alike invest in upgrading their digital and mobile capabilities and payments acceptance.

Earnings supplementals released alongside the earnings announcement showed that the Merchant Acceptance segment recorded 24% organic revenue growth to $2.1 billion. Clover-related revenues gathered 30%, and management noted on the call that annualized gross payment volume stands at $271 billion, up 17%, with increased penetration with independent software vendors and also bank partners.

“It’s the newest piece of the of the organization. But we’re seeing good growth across the board,” CEO Frank Bisignano said.

Volume in the overall segment was up 5%. The company also noted that Carat revenue growth was 11% year over year.

The Payments and Network segment reported 4% organic revenue growth to $1.7 billion. Momentum was underpinned by 44% growth in Zelle transactions and 23% growth in the number of segment clients.

The company’s materials detailed that organic growth in the Financial Technology segment was a negative 3% in the latest quarter, as the company shifted from software license sales to an application service provider model.

Client Spend Remains ‘Healthy’

Bisignano said on the conference call with analysts that demand remained “healthy” from small- to medium-sized business clients, and restaurants “are continuing to outperform.” Value-added solutions revenues were up by more than 40% through the past year, and have resulted in a 13% penetration rate among Fiserv’s clients.

He said, also, that through the past several months the company has signed more than 200 of its FI clients to expand their payment routes to include the FedNow® Service for real-time payments.

Fiserv expects another year of double-digit organic revenue growth, said the CEO.

Investors sent the shares lower 3% at the market open on Tuesday morning (Feb. 6).

CFO Bob Hau said on the call that the Merchant Acceptance growth was ahead of medium-term segment guidance of 9% to 12% organic revenue growth.

Looking into 2024, he said, volume growth has picked up into February after an initial, relatively slower growth two week period in January.

In his closing remarks, Bisignano said that artificial intelligence (AI) represents a sector of continued opportunity and investment, especially in fraud prevention, and that the company is “on a path to be an effective user and enabler of AI.”

As many as 85% of technical service calls gave been resolved unassisted through the use of data and AI.

Asked on the call about news last month that Fiserv had applied for a bank license in Georgia, Bisignano noted that “it’s a very specific purpose license that allows for sponsorship merchant acquiring. Historically, you needed a bank…and our ability…to be a sponsor for our own merchant acquiring in certain instances will be valuable.”