Fiserv Sees ‘Pent Up’ Demand for Clover’s POS Hardware and Software Solutions

Fiserv’s most recent earnings call Tuesday (April 23) demonstrated continued demand for its point-of-sale (POS) systems that enable merchants to accept payments.

The company posted results that showed consolidated adjusted revenue growth of 7% in the first quarter to $4.9 billion.

Fiserv CEO Frank Bisignano said during the call that both segments — Merchant Solutions and Financial Solutions — performed well in the quarter. Merchant Solutions revenues grew 13% on an adjusted basis.  The Financial Solutions segment was 2% higher in terms of revenue, measured year over year.

The growth comes against a backdrop where, as Bisignano said, consumers are still spending, and consumers’ discretionary income “went mostly to dining out, amusement, hotels, and short-term rentals. These metrics point to a resilient consumer in the U S.” Those macro trends have helped benefit the Merchant segment.

Within that segment, he said, Clover is seeing embrace of its hardware and software solutions, logging its second consecutive quarter of 30% in revenue growth. Company materials took note of 8% small business growth and 12% enterprise transaction growth.

Clover is expected to reach an annualized $4.5 billion run rate in 2026, the CEO said. The offerings have achieved a 20% penetration of Fiserv’s Value Added Solutions on the strength of Clover SaaS and Clover Capital and new Clover-related products are on track to be launched later in 2024.

“We are seeing pent up demand for Clover,” said Bisignano, and in the APAC region, where it is preparing to launch those solutions, Fiserv already has more than 50 ISO and PayFac partners.

“We are seeing a newer vast opportunity emerge with our SnapPay product, a B2B payments offering, for mid-market merchants that integrate seamlessly with popular ERP solutions,” Bisignano said on the call.

Demand for Modernized Banking

Within the financial segment, said Bisignano, “demand for modernization and innovation is on full display.” The company garnered four FinTech wins for new and traditional use cases in Q1. In digital payment solutions, demand from Fiserv’s core account clients and other financial institutions remains strong, Bisignano said. Digital payments revenue growth of $920 million was up 9% year on year. There was 45% growth in Zelle transactions.

“Perhaps our biggest medium for long term opportunity is CashFlow Central, our small business accounts payable, accounts receivable solution that we are currently marketing to banks as resellers,” said Bisignano, and which will be available this summer.

CFO Robert Hau said on the call that “we continue to see strong demand from clients for FedNow and RTP integration” and added later in the call that “the cross Fiserv activity between our two segments is particularly powerful because following the success of the Fiserv/First Data merger. We are the only single provider of merchant, bank IT, and payments functionality.” The company is maintaining its organic revenue growth outlook for the year of 15% to 17%.

Fiserv shares were up 4.7% at the start of trading on Tuesday.