[ad_1]
Dive Brief:
- Digital payments company PayPal has tapped payment processor Fiserv as “its core U.S. partner for payment services” across PayPal and its Braintree unit, Fiserv CEO Frank Bisignano said Tuesday.
- During the company’s third-quarter earnings conference call with analysts, Bisignano called it “a new, direct, strategic, multi-year partnership covering several products and services and millions of merchant locations.” The tie-up was mentioned as Bisignano talked about Carat, Fiserv’s commerce platform for large merchants. The link builds on a “long-standing base of business” between the two payments companies, he added.
- “Fiserv has a long-term relationship with PayPal for a variety of merchant and payment services,” a Fiserv spokesperson said in a follow-up email Wednesday. “This agreement adds additional merchant acquiring and value-added services.” The spokesperson declined to elaborate further on the expanded pact.
Dive Insight:
Bisignano didn’t elaborate during the Tuesday call on the existing business between the two companies. Nonetheless, he explained that Brookfield, Wisconsin-based Fiserv has a strategic advantage in being able to offer services in addition to processing and acquiring, including the company’s debit routing capability through its ownership of debit networks Star and Accel.
“When you look at a PayPal and the like, it gives us a really good hand to be able to do more with them, besides only (e-commerce),” he said.
A spokesperson for San Jose-based PayPal didn’t immediately have a comment. The company is due to report earnings results on Nov. 1.
In August 2021, Fiserv said its large merchant business Carat was expanding digital payout options to cover payments to PayPal and Venmo accounts.
Fiserv also said this week it’s linked with business-to-business payments platform Melio to offer Fiserv’s financial institution clients an integrated accounts payable/accounts receivable service. Fiserv plans to bring the solution to market in summer 2024, Bisignano said Tuesday.
“This marks a significant step forward for Fiserv into a very large and growing market,” Bisignano said. The partnership combines Melio’s AP/AR workflows with Fiserv’s biller and merchant network and payment capabilities, he said.
Through the partnership with Melio, Fiserv aims to enable its financial institution clients to better meet the payment needs of small businesses and “level the playing field with emerging software-led competitors,” Bisignano said.
The distribution agreement includes about 3,500 financial institutions that currently use a Fiserv bill-pay services. The move arms Fiserv’s bank clients with a new offering that Bisignano said will grow their fee revenue and, in turn, Fiserv’s revenue.
The company also envisions taking the service to small and medium-sized business merchants using its Clover product and its independent software vendors. “In the near future, we will reach merchants directly with this product through Clover and our ISV channel,” Bisignano said.
Fiserv reported third-quarter net income nearly doubled to $969 million, on an 8% rise in revenue to $4.87 billion, according to the Tuesday news release.
[ad_2]
