Fiserv partners with TD Bank Group, acquires part of merchant business

MILWAUKEE - Fiserv, Inc. (NYSE:FI), a $92 billion market cap fintech leader with annual revenues exceeding $20 billion, announced Wednesday it has signed a multi-year Strategic Managed Services agreement with TD Bank Group, enabling TD Merchant Solutions to utilize Fiserv technology, including the Clover point-of-sale system. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value calculations.

As part of the arrangement, Fiserv will acquire a portion of TD’s merchant processing business in Canada, comprising approximately 3,400 merchant relationships across 30,000 locations. These merchants will migrate to Fiserv’s processing system and Clover platform. InvestingPro data shows Fiserv maintains strong profitability with a 61% gross margin and healthy EBITDA of $9.2 billion in the last twelve months.

"This agreement reinforces our strong relationship with TD and underscores our shared commitment to delivering value to clients," said Takis Georgakopoulos, Chief Operating Officer at Fiserv.

Barbara Hooper, Group Head of Canadian Business Banking at TD Bank Group, stated the strategic relationship "will directly benefit our clients by combining Clover, Fiserv’s innovative merchant product offering, with our business banking solutions."

The transaction expands Fiserv’s Canadian presence and the footprint of its Clover platform. Financial terms were not disclosed, and the deal is expected to close later this year, subject to customary closing conditions, according to the company’s press release statement.

Fiserv, a Fortune 500 company and member of the S&P 500 Index, provides payments and financial technology services including account processing, digital banking solutions, card issuer processing, and merchant acquiring services.

In other recent news, Fiserv, Inc. has announced the launch of Clover PracticePay, a new payment platform developed in partnership with Rectangle Health, aimed at assisting small and medium-sized healthcare providers with payment management while ensuring HIPAA compliance. This platform integrates Rectangle Health’s Practice Management Bridge technology with Clover’s point-of-sale hardware, offering features like financing options, recurring billing, and online payment portals. Additionally, Fiserv has expanded its partnership with Mastercard to integrate the FIUSD stablecoin across Mastercard’s global payments network, potentially reaching over 150 million merchants. This collaboration will facilitate seamless conversion between traditional currency and FIUSD and enable merchants to accept stablecoin payments.

In another development, Fiserv and PayPal have partnered to enhance interoperability between their stablecoins, FIUSD and PYUSD, focusing on integrating these into payment flows for both domestic and international transactions. William Blair has reiterated its Outperform rating for Fiserv, noting the company’s recent stablecoin initiatives. Furthermore, Fiserv has announced plans to launch a digital asset platform by the end of 2025, which will help banks implement stablecoin technology, with Fiserv earning transaction fees and a portion of yield on reserves.

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