Merchant acceptance, payments, and network and financial technology were the key pillars propelling Fiserv Inc.’s better -than-expected organic growth during the fourth quarter and for fiscal year 2022. Organic revenue growth—growth apart from recent acquisitions—for the three core segments of Fiserv’s business increased 17%, 9%, and 5%, respectively, compared to a year earlier.
Overall, Fiserv posted a 12% increase in organic revenue for the quarter and an 11% jump year-over-year for the year.
“We are a company that is better than the sum of its parts,” chief executive and chairman Frank Bisignano told equity analysts on a conference call early Tuesday. “Our solutions support growth and operating efficiency for our clients.”
The strong growth and the company’s “sturdy balance” is a reflection of the Brookfield, Wis.-based processor’s financial and operational strength and is expected to position the company to weather a potential mild recession in 2023, which many economists are predicting, Bisignano said.
Within the company’s merchant-acceptance unit, its Clover and Carat units posted fourth-quarter revenue growth of 23% and 15%, respectively. For the year, Clover posted $232 billion in gross payment volume. Merchant volume and transactions grew 6% and 3%, respectively, during the fourth quarter. In addition, the promise of synergies from the acquisition of First Data Corp. in 2019 are being fully realized, Bisignano said.
“We can feel the power of the franchise coming together,” he said. “We merged [with First Data] in 2019, managed through the pandemic in 2020, and today the opportunities are larger than we thought. Today, we are doing things neither company did prior.”
Among the highlights touted during the call was the introduction in 2022 of a new Clover gateway that makes it easier for merchants to access services and better positions Fiserv to serve the card-not-present market, Bisignano said. In addition, the acquisition of marketing and commerce platform BentoBox in October has strengthened Fiserv’s hand in the restaurant, and hospitality arena, he added.
More than 7,500 restaurants globally are using BentoBox, whose platform includes products such as Web sites, ordering, and events management.
Overall, the Fiserv continues to attract more merchants and add more value-added services, officials said. As a result, adjusted merchant revenue increased 9% in the fourth quarter, to $1.86 billion, from a year earlier.
Looking ahead, Fiserv is projecting organic revenue growth of between 7% and 9% in 2023. That projection includes an anticipated mild recession. “We are not calling for a recession, we just built [the possibility] into our baseline projections,” Bisignano said.
Fiserv added that including the possibility of a recession in 2023, based on economic forecasts, is prudent, since it is tough to know when or if a recession will occur in the coming year.
If a recession does occur, the expectation is that it will be mild. “We don’t expect to see the kind of shocks we did in the second half of 2020 when the world basically shut down [due to the Covid 19 pandemic],” said chief financial officer Robert Hau.