Close observers of the payment-processing industry predicted Fiserv Inc. would start a merger wave when it announced its $22 billion deal to acquire First Data Corp. in January. That prophecy seems to have come true with the even bigger $43 billion FIS-Worldpay merger announced Monday, and the consolidation wave probably hasn’t crested, analysts say.
The roster of potential buyers—or sellers—includes Total System Services Inc. (TSYS), Global Payments Inc., U.S. Bancorp, which owns the big merchant acquirer Elavon Inc., and Jack Henry & Associates Inc.
“Do I think another one is coming in the future?” asks Jared Drieling, senior director of business intelligence at Omaha, Neb.-based payments consulting firm The Strawhecker Group. “Of course.”
The trend is for processors with big but slower-growing services for credit and debit card issuers to move into the faster-growing merchant-acquiring space, he tells Digital Transactions News. That was the case with Fiserv and now FIS, both of which will become big-league acquirers when their deals close. “We’re kind of seeing the flip of these other processors in terms of getting into the acquiring community,” says Drieling.