Q1 2023 Fiserv Inc Earnings Call
Speaker 1: Please stand by. The conference will begin shortly. Again, please stand by. The conference will begin shortly. Thank you. The conference will begin shortly.
Speaker 1: Welcome to the FISERV 2023 First Quarter Earnings Conference call. All participants will be in a listen-only mode until the question-and-answer session begins following the presentation. As a reminder, today's call is being recorded. At this time, I will turn the call over to Julie Sherriel, Senior Vice President of Investor Relations at FISERV.
Speaker 2: Thank you and good morning. With me on the call today are Frank Vivignano, our Chairman, President, and Chief Executive Officer, and Bob Howell, our Chief Financial Officer.
Speaker 2: Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of Fiserv.com.
Speaker 2: Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call, along with a reconciliation of those measures to the nearest applicable GAAP measures. Thank you for your attention.
Speaker 2: Unless otherwise stated, performance references are year-over-year comparisons.
Speaker 2: Our remarks today will include forward-looking statements about, among other matters,
Speaker 2: expected operating and financial results and strategic initiatives.
Speaker 2: Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties.
Speaker 2: You should refer to our earnings release for discussion of these risk factors.
Speaker 3: And now over to Frank. Thank you, Julie. And thank you all for joining us today.
Speaker 3: Vyserv is off to a strong start in 2023, with first quarter adjusted revenue growth of 10%, and adjusted earnings per share of $1.58, up 13%.
Speaker 3: Adjusted operating margin of 33.6% was up 160 basis points.
Speaker 3: Organic revenue growth was 13%, above our 7-9% outlook for the full year, demonstrating our ability to sustain accelerated growth. Importantly, the growth was multidimensional.
Speaker 3: It included elevated contributions from card processing, non-card payments, and digital banking solutions.
Speaker 3: Growth was also strong in all three of our international regions and in merchant acceptance.
Speaker 3: Investment on behalf of our clients and with our partners is paying off.
Speaker 3: We believe that Accel Radio Investment over the last three years, both organic and via M&A, has extended a leadership position among Vintex.
Speaker 3: This counters the narrative of the last few years that many startups and agreements and Vintex base would disrupt and potentially replace the legacy companies.
Speaker 3: Our results show that our strategy to innovate and disrupt on behalf of, not in place of, our long-standing bank and merchant customers was on the mark.
Speaker 3: These competitors have indeed raised the bar for the tech and vintech, but we've met and in some cases exceeded that bar with our own investment in innovation.
Speaker 3: The power about business model is in the virtuous cycle of generating revenue growth across the scaled business leading to greater operating margins. That profit produces significant cash to reinvest in the business for faster organic growth.
Speaker 3: and value or creative acquisitions, while the remainder is returned to shareholders through sharing purchase.
Speaker 3: The market has shown that legacy companies across many industries with scale and willingness to innovate will offer sustainable value to clients and shareholders.
Speaker 3: Let's talk for a moment about how the benefits of our breath, scale, and investment have driven innovation.
Speaker 3: For small and medium-sized businesses, we developed a cloud-based SaaS operating system for their payment needs with Clover.
Speaker 3: Now we're allowing these businesses to easily accept multiple payment types, and we are seamlessly integrating software and services to address their broader business needs. For large enterprise businesses, we developed an integrated omnichannel system called Carrot.
Speaker 3: to manage payment needs across in-store and online sales channels, and we're adding Saturday solutions that improve our clients' efficiency and enhance their customers' experiences.
Speaker 3: For debit and credit issuers, we've already built the most comprehensive suite of solutions.
Speaker 3: and we continue to innovate. Park hub.
Speaker 3: was built off of the tools acquired with ONDA. And now offers a comprehensive set of modern digital card holder experiences.
Speaker 3: More than 1,000 financial institutions are now using card hook.
Speaker 3: which can be fully integrated into their mobile banking app.
Speaker 3: Allowing these issuers to offer their customers a unified digital card experience that only a few of the largest financial institutions can provide today. One track does for a bank's small and medium-sized business clients what Cardhub does for their
Speaker 3: does for its retail customers. This differentiated mobile-first platform offers card management and AI-enabled expense management with workflows specific to their business needs.
Speaker 3: Built from a Spenland acquisition, Spentrak has helped us win more credit, debit, and network business with banks and insurers that cater to SMBs.
Speaker 3: For small and medium-sized banks, we provide a full suite of the digital banking tools that help them compete with the largest banks, from mobile apps to spend management to Zell P2P payments.
Speaker 3: And enjoy with the launch of FedNow will help them participate in the new wave of real-time payments optimized on our now network that connects banks to each other to all payment zakwan
Speaker 3: and to essential applications. For banks of all sizes, we've built a path to the cloud through both our industry-eating DNA core platform and now with VINZAC, our native cloud solution acquired last year.
Speaker 3: And in support of our biggest investment of all, the combination of first data and vice-erve, we are finding new opportunities across our client base that are aligned in ways that only vice-erve can enable. Here are just three examples.
Speaker 3: of the power of our combined franchise.
Speaker 3: of our combined franchise. First.
Speaker 3: Star in Excel, the third largest debit network in the country.
Speaker 3: helps current issuers and merchants realize attractive economics on debit transaction routing.
Speaker 3: and satisfy new RIGI requirements for at least two unaffiliated networks on each card to route card-not-present transactions. Second, Al Sminzak, Cloud Native Banking Corps, is laying the groundwork as an operating system at scale.
Speaker 3: for financial institutions and merchants looking to offer embedded finance.
Speaker 3: Third, our Outlook Solutions business offers a full range of capabilities beyond what either predecessor company had.
Speaker 3: Third, our Outlook Solutions business offers a full range of capabilities beyond what either a predecessor company had. For example,
Speaker 3: We are now able to offer communications and card manufacturing solutions to our entire Climb BASE!
Speaker 3: From retail private label issuers
Speaker 3: to general purpose credit issuers, healthcare providers, banks, and governments.
Speaker 3: As we look to the remainder of 2023, we start with a firm foundation of above-quand revenue and earnings.
Speaker 3: Still, we think it is why it's the balanced, strong start with the potential for macroeconomic kid wins in the second half of the year.
Speaker 3: So we are listing the lower end of our prior 2023 guidance for both organic revenue growth and adjusted EPS and maintaining the upper end at this point.
Speaker 3: We now anticipate organic revenue growth of 8 to 9 percent in adjusted earnings for share of $7.30 to $7.40. So let's discuss the trends we are seeing.
Speaker 3: in each of our segments now and for the rest of the year.
Speaker 3: Merchant acceptance continues to be a very strong grower, posting 18% organic revenue growth in the first quarter, including significant strength in land of America and Asia, and continued gains in North America. This growth reflects overall consumer spending resilience.
but is also a testament to our strong distribution channels.
Ability to develop new products and services that resonate.
Success in selling more solutions to our existing merchants.
and the power of diversification across verticals, merchant size and geography.
It's not yet clear whether broader macro headwinds are beginning to impact consumer spending, but we did see payment volume growth slow a bit late in the corner. We continue to see good demand in the grocery group.
as well as in restaurants, especially QSRs.
We started to see consumers rotate towards non-discretionary spending and reduce basket size.
The decline in inflation is impacting volume growth particularly in the ventr gestures vertical.
This did not impact by our revenue, which for large petrol providers and other enterprise clients is based on transactions not dollar by them.
How important advantages in this environment are our breadth of distribution?
Business is both large and small and a good mix of nondiscretionary spending.
about half of our volume.
Still, we are mindful that higher interest rates may weigh on consumers and thus we anticipate second quarter revenue growth in this segment to ease from the very strong first quarter level.
Then of course it's contemplated in our guidance.
Coverage revenue growth remains strong. Up 22% in the quarter, we continue to add merchants at a healthy base and extended value added services penetration, another point to 17%. Now, one year since our merchant investor day, we are on track.
to achieve the targets we set for 2020-BOD, $10 billion in merchant acceptance revenue.
$3.5 billion in Clover revenue.
and Clover Value Added Services' Manitration of 25%. For Clover, a consistent average rate of growth over this time period was not in our Council since 2011.
Instead, the growth rate should accelerate over the next three years as we add more products, increase software penetration and reach new markets.
In the first quarter, for instance, we integrated bill pay and enhanced fraud management into Clover and improved access to Clover Capital via our client dashboard. In the past 12 months, we introduced upgraded Clover Mini and Clover Flex hardware. Later this year, we introduced the Clover Mini and Clover Flex hardware.
We'll add a low-cost, smart POS pinpad to address the needs of smaller merchants who want simpler access to the clover operating system and software.
During the quarter, Pfizer launched support for Apple tap to pay on iPhone for SMBs on the Cobra platform and for US Enterprise clients.
This will enable businesses from large enterprises through medium and small businesses down to micro merchants to securely accept contactless payments on iPhones without the need for additional hardware like an external card reader. As contactless payment usage rises...
We are excited to enable new and existing clients to use this seamless and secure solution on iPhone to help run and grow their businesses.
On our carrot platform, we continue to expand our capabilities in broad omnichannel solutions for enterprise merchants.
We renewed and expanded our contract scope with several large merchants this quarter, including fanatics.
and a major hotel chain.
We also recently signed a pay-by-bank agreement with Walmart that includes traditional ACH processing and incorporates by serves now network and real-time payments capabilities.
Health payments and network figment.
Also had a very strong quarter, posting 13% organic revenue growth that included double digit gains in all three business lines.
Issure solutions primarily representing credit card issuing and output services.
Cards services, including debit processing and our debit networks, star and Excel, and our digital payment services, including cell and our bill pay business.
This strong performance drove growth that was above the medium-term guidance of 5 to 8 percent and includes a couple of points of growth from a few discrete factors.
which Bob will cover in more detail later. Positive trends continue and should carry full-year growth toward the high end of the range.
Several years of large-card issuer wins in North America will drive revenue growth in the coming years, with a pipeline that includes new win opportunities, as well as follow-on sales to existing clients.
as we extend our value proposition. Our issue compliance have been active in deploying three highly innovative products. Advanced events.
L, new AI-based fraud solution.
New card controls and alerts developed by ON.
And point of sale on solutions that help issuers compete with BNPL providers.
Recently, City signed on for our POS loan product, and PNC went live. USAAA is in the process of implementing advanced events while Freddie Wan has signed on as well.
International issue resolutions was another bright spot in the quarter with winds across all three of our regions.
In Latin America, the leading Argentine FinTech.
Wawa chose Pfizer to provide credit card processing services for its new digital first credit card product launch.
It's already live in Mexico and will go live in Argentina and Colombia in the coming months.
While I chose our first vision platform for its local presence and global cloud API deep way that maximizes the digital user experience with APIs for instant card issuing.
Dynamic verification and installment payments among other services.
We're excited about additional opportunities as we roll out the next generation cloud-based first vision platform later this year.
In Inamiya, we signed a contract with National Bank of Kuwait, the country's largest bank, to process their debit acquiring business on our first vision platform. This follows a fourth quarter win with this client.
for prepaid processing. Turning to Gord Services, a debit network and processing business.
Growth remains strong as we continue to add new issuing business without core and non-core bank clients and signed merchants for debit transaction routing via our networks.
The adoption of Rage Eye has brought another large merchant, Boober, to our networks.
We will provide over the benefit of the added choice that comes from the dual network mandate for card not present debit routing.
We see many more merchants in our debit networks pipeline ahead of the new rule set to take effect July 1st.
Our digital payments activity continues to grow with sale implementations and transactions.
We have over 1200 financial institutions live on cell today with the potential to add hundreds more to our install base this year.
But angel institutions that use us for NEL services are connected.
institutions that use us for NEL services are connected to the FI serve NEL network.
which also provides easy access to Fed Nell, the Federal Reserve's real-time payment system.
We have six banks in the pilot phase and over 20 financial institutions committed to go live post FedNow launch and joy.
We're encouraged by the opportunity to add many more banks and credit unions, especially since we think our now network as a single integration layer offers the ideal way to access that now.
Now, the network of networks connecting financial institutions, builders, consumers, and businesses who real-time money and data movement across all rails including CARD, ACH, ZELL, Bednell, and the clearinghouse.
In Asia, we're working with leading banks across the region on digital transformation initiatives.
This includes Bangkok Bank, the largest bank in Thailand that will expand its mobility digital banking platform into New Domingue.
and BDO, the largest bank in the Philippines, where we are bringing signature core banking microservices to enhance BDO's third-party systems integration.
We're also working with National Payment Corporation of India to enable the unified payments into base on roommate credit cards for issuers on our India processing hub.
also working with National Payment Corporation of India to enable the unified payments that have been based on roommate credit cards for issuers on our India processing hub. Turning to up the index segment.
Organic revenue growth of 3% was slightly below a medium-term guide of 4% to 6%, which we attribute to timing and a strong verge quarter last year, creating a higher comparison point.
Implementation from the healthy series of wins over the past few years will provide growth in the second half of this year.
We continue to see organic growth and assignment within the guidance range.
Importantly, we have not seen an extended disruption from the banking turmoil that arose in March. Thus far, there are no follow-on effects across our banking client base as we continue to monitor it.
without enterprise risk framework. We see the opportunity to sell our regulatory suite to banks who may increasingly need them.
And we are well positioned to be a net winner among required banks should M&A activity heat up.
Many ARGER banks already use a variety of our services and we've demonstrated the ability to scale our modern platforms.
In April , we marked the one-year anniversary of the Finzac Acquisition and have been very happy with its progress.
We've seen strong interests from new and existing clients, which has contributed to meaningful growth in authentic pipeline.
Importantly, in the verse quarter, 5-serving nude, the Finsack Hortnership.1. A leading banking Fintech backed by Walmart. Finsack will be the system of record for a growing number of ones expanding banking services.
Ramping this opportunity will represent a high-profile achievement in scale that could attract other banks' emergence to the proven Finsack solution. Now, let me pass the discussion to Bob.
for more detail on our financial results.
Thank you, Frank, and good morning, everyone. If you're fine along on our slides, I will cover additional detail on total company and segment performance.
Starting with our financial metrics and trends on slide 4.
First quarter results, largely outpaced both internal and external expectations.
Total company, organic revenue growth, was 13% in the quarter with strong performance in the payments of network segment and continual momentum in our merchant acceptance segment.
Growth is tracking well ahead of initial guidance for the full year. So we are raising the lower end and now anticipate growth of 8 to 9 percent, which considers economists forecasts for slower consumer spending and bank lending in the second half of this year. We note, however,
that we are not seeing signs that these measures are slowing meaningfully at this time. First quarter total company adjusted revenue grew 10% to $4.3 billion and adjusted operating income grew 15% to $1.4 billion. Resulting an adjusted operating margin of 33.6% an increase of 160 basis points.
First quarter adjusted earnings per share increased 13% to $1.58 compared to $1.40 in the prior year.
Three cash flow came in at $861 million for the quarter of 43% driven by improved working capital.
We remain confident in achieving our outlook of $3.8 billion in free cash flow this year.
Based on a higher organic revenue growth, coupled with our focus on operational excellence, which supports our margin expansion outlook of more than 125 basis points, we are raising our full-year adjusted EPS guidance range from the previous $7.25 to $7.40.
to a new range of $7.30 to $7.40. Representing growth of 12 to 14% over 2022.
Now looking to our segment results starting on slide 5, organic revenue growth in the merchant acceptance segment was a strong 18% in the quarter, well ahead of our medium-term segment guidance of 9 to 12%.
adjusted revenue growth in the quarter was 12%. Merchant volume and transactions each grew 5%. Starting to our merchant operating systems, clover and carrot, we continue to see gains across key metrics, including net new merchant ads, value added services penetration, and partner relationships.
Global Revenue grew 22% coming off one of our toughest comparisons with last year when the post-COVID returned to normal was in full swing.
Payment volume growth was 17%.
The software and services penetration reads 17% of total clover revenue, an increase to 150 basis points from a year ago, and up 80 basis points sequentially.
with continued strength and services such as Clover Capital. Clover Connect for ISV's built-on-its momentum with very strong revenue growth in the quarter as we continue to execute on our vertical strategies and in 37 ISV partners. We also delivered new client wins.
Following product introductions last quarter for the payment facilitator or payback market. Carrot also has strong quarter with revenue growing 16%.
International merchant operations represented 22% of segment revenue in the first quarter and grew 39% organically led by Latin America. Adjusted operating income in the acceptance segment increased 20% to $562 million and adjusted operating margin was up 210 basis points to 30.5%.
The improvement reflects strong operating leverage and cost management. 30 to slide 6 on the payments and network segment. Organic revenue grew 13% in the quarter and adjusted revenue growth with 11%.
Organic growth was well above the high end of the 5 to 8 percent guidance range. As Frank mentioned, a few discrete items contributed a couple of points of growth.
These included additional revenue carryover from state government stimulus work, above average digital bank transfers in March. It is slightly easier comparison against first quarter of last year. Even as year-over-year comparisons get tougher in the second half.
We still expect 2023 growth to be at the high end of the segments guidance range for the full year. The remaining growth was driven by a variety of impacts across our business lines.
Our North American Credit Act of Accounts on File grew 12 percent, driven by both new business onboarding and a favorable credit environment.
Our international issuing business continues to grow above segment average, driven by a macroeconomic improvement as well as onboarding of new clients. And our debit business continues to post solid growth, supported by new solutions and new client wins across processing and network.
Adjusted operating income for the segment was up 15% to $717 million and adjusted operating margin was up 130 basis points so 43.8%.
Operating leverage and a favorable mix shift towards debit network revenue helped drive the margin improvement along with cost management. Move it is slide seven. In the financial technology segment, we posted 3% organic growth for the quarter, this below are 4 to 6% medium term guidance range.
We expect to achieve growth within that guidance range this year as implementation work on prior wins is completed in the second half.
Meanwhile, new customer momentum continues and we had 12 core wins in the quarter.
Adjust the operating income was up 2% to $280 million. Adjust the operating margin in the segment was flat at 35.4%, as we continue to invest in Finzac.
We expect margin expansion to resume as we anniversary the FinTech acquisition in the second quarter. The adjusted corporate operating loss was $122 million in line with the prior year.
The adjusted effective tax rate in the quarter was 18.9%.
We continue to expect full year 2023 adjusted effective tax rate to be approximately 20%.
Total debt outstanding was $22.4 billion on March 31st.
The debt to adjusted the EBITDA ratio increased a tenth of a turn to 2.9 times and remains in our target range of less than three times leverage.
During the quarter, we issued $1.8 billion of 5- and 10-year senior notes to replace notes coming due later this year and reduce our commercial paper program balances.
Variable rate debt sits at 14% of total.
During the quarter, we significantly stopped our share repurchases.
buying back nearly $1.5 billion worth of stock. After receiving board approval to repurchase up to an additional 75 million shares, we had 78.7 million shares remaining authorized for repurchase at the end of the quarter.
We are fully committed to our longstanding capital allocation strategy, which includes investing in our business organically, maintaining a strong balance sheet, returning cash to shareholders through share repurchase.
and pursuing high value and innovative acquisitions. With that, let me turn the call back to Frank. Alright Frank,
Thanks, Bob. Before wrapping up, I wanted to discuss our ESG efforts.
Our approach to corporate social responsibility, NDSG, is one of the ways our business produces better outcomes for our clients, shareholders, and associates. Let me share some highlights of our soon to be published annual CSR report. First
our ongoing dedication to the progress of our associates through professional development. In 2022, we filled 45% of exempt roles with internal five service associates.
Second, out continued investment in minority women, veteran, ethnically diverse, LGBTQ plus, and disability-owned businesses throughout back-to-business program in the US and UK.
We have awarded more than 1600 grants to eligible merchants since the inception of the program.
Third, our commitment to continue to improve our collection and disclosure of greenhouse gas emissions and energy data.
Not only have we aligned our 2022 CSR report with the Task Force on Climate-related Disclosures Framework, but we have also provided three years of data and a foundation for measuring the impact of climate change.
about ongoing GHG and energy initiatives. These factors are reflected in being named to Forbes' list of America's best large employers, which is based on a poll of employee recommendations released in the first quarter.
We are equally proud of another recognition received in the first quarter as one of America's most innovative companies by fortune.
I started off this discussion by highlighting the importance of investment in innovation. And this is another group point. Adjust how seriously we take technology innovation on behalf of customers and our future.
This time of year is often marked by the release of ranking figures tabulated for the prior year. My time in banking left me with an affinity for league tables that I know you also share.
I'm pleased to report that Pfizer of Hegretain is number one position in eight categories.
Core account processing, merchant acquiring, mobile banking, online banking, issuer processing, bill payment, person-to-person payments, and account-to-account transfers. And that brings me back to the previous video.
to where we started our discussion today. The importance of scale in sustaining investment and driving innovation. I think the 41,000 employees of ViCERB who helped get and keep us here. I know that I speak.
For all of them, when I say we intend to maintain the privilege position we hold. And now operator, we open the line for questions. Thank you. We would now like to open the phone lines for questions. If you would like to ask a question, you may press star one on your phone. If you would like to withdraw your question.
spend and gas, but also curious around bank IT spending. I know you lifted the lower end of your outlook. Sounds like you feel confident in the timing of implementation on deals. So if you just maybe elaborate on that and a little bit more on the consumer side, that would be great. Thank you.
Good to hear from you. Thank you. I'd say, you know, as much turmoil as we had in March, our volumes were very high. You know, you hear us talk about what I call a backlog.
meaning out books sold that's being implemented right now. We expect that a very strong lift in the second half demands still very high from financial institutions. I spent a lot of time with our client base.
The demand for digital, you heard us talk about the demand for Fenn's Act, also out clients are building bigger businesses and trying to gain share also. So we feel good about the bank and got to spend and we feel good about our position with our client base right now.
I hope that answers your question. I'm glad to hear it. My follow up then, if you'll mind, you call out to Uber when on the Star Excel Devon that works for CMP routing. I think I've asked you a few times for rank on regi. Bye bye, so servants don't hurt or hurt.
You mentioned a strong pipeline. Do you see a burst in potential deals and revenue leading up to that? Or is this going to trickle into the second half of the year? Just trying to understand. Oh, I think it's the second half and beyond.
You know, I think, you know, it's probably more a 24 than a 23. We should see some of it in 23, but I think you'll see more of it in 24. All right, so it's not a one and done thing. Great. Thank you for the time. Thank you. Next we'll go to the line of Ramsey, Alisa, from Barclays. Please go...
pricing other factors and also just on the sustainability of the strivers in terms of.
driving revenue over here. Here, Ramsey, good morning. As you heard us talk about, there's lots of variation quarter to quarter in terms of that spread that you talk about. There's a combination of things like mix of.
small businesses versus enterprise of hardware versus processing. As you heard, we introduced a new hardware in the last few months. We've got some more coming in the balance of here. That will drive a mix of international or three regions, Latin.
I mean, APAC with particular strength and in LATAM and APAC right now. More penetration of value added services, you always talk about that stepping up 150 basis points to 17% in a quarter mix of pay facts and ISVs and ISVs. Lots of different elements, which is why...
our goal of $10 billion of revenue in the segment by 2025.
Okay, so quite a few different factors contributing there. A follow-up for me is just on the international growth and merchant that seemed just incredibly impressive. What are the kind of common threads between the different markets that are helping to drive that growth? Is there anything that's going on outside the U.S. that's sparking?
that's still ramping up. When you look across Asia Pack, you can see us winning business there. So I think it says Trident True is having L-feet completely embedded on the ground in terms of our capability. Some cases, cases, clover leads.
But, you know, it's always been investment for us and innovation, running a global franchise. And I think on top of it, it's beyond merchant. It's a issuer along with it, which allows the payment segment also to get the benefit of algae graphic disversities. So...
It's a continuation of our strategy. We lead out to going back to 2020. And we'll continue to invest in those markets. We like the growth in those markets. We run those regions separately. And we feel great about our leadership on the ground there, too. Ramsey, I think that's one of the distinctions for us. And it's one of the key to our success. We have local leadership. We don't have an internet.
across all of the regions, we continue to be the partner of choice and bank partners are one of the key methods. Frank talked about Kasha in Europe . We announced our Deutsche Bank Joint Venture. We've got partnerships in Asia-Pak, Singapore, and India, etc. So it's a global reach with very local leadership.
Great, thanks so much. Next, we'll go to the line of Lisa Ellis from Moffit, Nathanson. Please go ahead. Hi, good morning. Thanks for taking my questions and good stuff here. Thank you, highlighted five serves ongoing readiness efforts related to the rollout of set now coming in a few months.
Can you just elaborate a bit on how you anticipate and I guess maybe how quickly you expect FedNow to begin impacting 5Serve's business and where we'll see that benefit. Thank you.
Yeah, I mean, you know, we've always had a philosophy that we are a commerce enabler, right? So as new payment types and changes to payment types, just all what we did with Zell, here you go back to places like Apple Pay. It's just an out philosophical belief.
that we are here to help our clients grow their business. We're here in Purpose Trivamed that to help them run their business better. And when new initiatives like Bad Now come along, and we have thousands of banks and great unions across.
The country that are looking for different payment methodologies to allow them to deliver for their clients, we're going to enable it. So we partner obviously with the Fed on this. I see it as another payment type. I think it's good for our largest institutions and our smallest.
And you know, I suspect it will get volume. It's for us. It's a very good choice to enable payments, just like cell was a very good choice to enable payments. So we're pretty excited. Adoption will drive all. It'll be a single integrated interface to allow clients to be able to come in.
seamlessly around that now network and I'm looking forward to reading on it. I'll only talk next quarter.
Terrific. Thank you. And then maybe just for my follow up, I'll ask about investment areas because you did call out how FINZACT on dot and some of your other recent acquisitions are having a very noticeable positive impact on FICE-ERF. So just looking forward, what are some of your priority investment areas like sort of the hot?
Very well, but we've also added you know bento box merchant one next table So you'll see us do both I think we have a very very strong track record Starting with Clover moving on to moving to bento box fennzack
of bringing founders in and helping them grow their business at a different level. Right? I think you can see a vertical focus. You see us with driving value-added services. So I would say that's a large part of the merchant story. And that will happen in the US and within our regions also.
I think when you think about Finsac, you think about what I've noticed the 8Best Next Generation platform out there. And both Finsac and DNA are very, very strong assets. We do have great assets like signature also, but when you think about the build out, you should think about us taking Finsac.
and DNA to the next level is the best cloud platform in the industry between the two by far. And, you know, when you see the investment we're making to bring Walmart up, and they're up and running in the early stages, that'll industrialize us on that platform beyond anyone's expectations when we acquire it.
usually successful in the issuing area, you know, even as late as day chart dad and target coming on. So we'll continue to invest in those platforms grow them out and bring more value added services there, more digital capability there also. I think along with that, what we're doing...
with things like Span Labs and is we're opening up a whole new SMB opportunity with an upward foil that we think will transfer to a whole organization. And we believe deeply in SMB and the combo of Span Labs and Clover.
and other assets that we brought on board will really allow us to even have more wallet from our SMB population. And on that, you sort of take something that was a card control, card access capability, and bring it into the mobile banking platforms over a thousand institutions. So I think, you know, you also get the speed in which we ramped these products the way we get to green them into the company. We think we have a pretty strong expertise in that. And you can count on that continuing driving future growth for the company. Perfect. Thank you. Next we'll go to the line of Timothy Chiotto from Credit Suisse. Please go ahead.
Great, thank you for taking the question. I want to take it a little bit more on the recent star and a cell when the mentioned numerous of those, the Uber or the large merchant acquire last quarter and more in the pipeline. I want to just recap the value proposition. When you're speaking with these acquirers and merchants, I'm assuming part of it is lower interchange network fees. There might be a bundled sales approach. There might be an authorization angle.
If you could recap those and maybe add to the list. And then lastly, if it all possible, if you could just comment directly in terms of market share goals, is the goal for US Online Debit for Start-A-Cell to be in a similar position to your share for the in-store debit market in the US?
So, first I think you did a pretty good job. So thank you and describing the opportunity. And I would say, you know, yes, we're in the clients office every day, right? Large institutions.
and we're talking to them about helpful capability. I think we get a lot of imbalance from large institutions because you know if you're the third debit network I think it's a very strong position and the combo of STAR and Excel is very very powerful.
It's good for our merchants. It's good for our issuers. And I want to lose that. It's a two-sided benefit. That benefit is us having invested in these products for a long time.
It consistently felt that it was a value add, doubt clients, both large and small. It is about technical capability, not just about a lower price, right? Of course, every one of our businesses says,
they need. When you think about market share, you know, you hear us write off those number ones and then we rattle off at number three in debit, I think that's a pretty privileged position. Those are formidable and fabulous institutions, one and two. So our job.
is to give our client choice, right? And if we give them choice, we do come with an all-inclusive capable set of assets that we deliver to clients. It could be, you know, one-cost debit routing. It's the capabilities of Reg II.
It's also the pay-by-bank capability that you're heard about. Over time, it will potentially be things like fentanyl and zeal capability. Our job is to have the bundle, have the capability, help both issuers and merchants.
be able to get a better outcome. And I think, you know, we're uniquely positioned and of everybody in the industry. It's really the power of having a merchant business and issuing business, a banking business, and we're a horizontal company that allows us to partner across our businesses.
give the best solution by client. And that's why sometimes, you know, when we look at it, we look at it, how did we deliver on the top in total? And how did we deliver in margin in total and making sure we're doing the best job around clients and our shareholders?
Great, thank you Frank. Our next question comes from Dave Tilgett from Evercore ISI. Please go ahead.
Thank you. Good morning. Within the FinTech segment, the 12 core wins are certainly good to see. Can you talk about decision cycles, sales cycles, and how they might be evolving post the regional bank crisis from early March? Thanks, guys.
Yeah, I mean, first of all, I didn't see a regional bank crisis. I saw a tremendous turmoil. I think we have banks of all sizes from the largest in the world.
to 13 person credit unions. And there was not a cross, and this is me talking to you about my interaction with my client base. In their office during this period of time laws on the roads, whether it was to be to Kansas, we saw Missouri Springfield, Missouri, Raleigh, North Carolina, you know, all across.
We have very, very sound banks across this country that really perform very, very well and have always ran their asset and liability structure in a manner that I've seen through my career. So, a little bit, I'm sorry for that kickoff, but I wouldn't want to deem it as a banking crisis.