Dive Brief:

• Fiserv executives are betting on faster growth in the payment processor’s Clover business unit over the next three years, doubling down on expansion into new geographic markets and new verticals.
• During an investor conference Wednesday, executives said Clover, Fiserv’s unit that serves small and medium-sized businesses with point-of-sale software and hardware, is currently used by about 700,000 businesses in eight countries and handles $272 billion in annualized gross payment volume.
• The Brookfield, Wisconsin-based company is also gearing up to roll out a new set of Clover hardware, including kiosks and compact devices, said Suzan Kereere, Fiserv’s head of global business solutions, during the conference.

Dive Insight:

Clover’s annualized gross payment volume figure surpasses the $220 billion for Block’s Square and $135 billion for restaurant rival Toast, Mizuho Securities analyst Dan Dolev pointed out in a Thursday note to investor clients. “Clover’s scale is impressive,” and should make competitors like Toast and Square “lose sleep,” Dolev wrote.

When an analyst asked during the investor day session whether the clock is ticking for Fiserv to move existing small business clients onto Clover technology before rivals swoop in and take those customers, CEO Frank Bisignano rejected that notion. “We’re not waiting for somebody else to show up, because we’re going to lap every capability in the industry, and we have so far,” Bisignano asserted.

Still, “I’m paranoid, I want to look around the corner,” Bisignano admitted. The small to medium-sized business point-of-sale market Clover operates in is highly competitive, with rivals such as Block’s Square, Toast, Shift4 and Lightspeed Commerce gunning for market share.    

“We have a good methodology, I don’t think we’re waiting too long,” Bisignano said. “And I’m not scared of the boogeyman on this one.” 

Of Fiserv’s small and medium-sized business customers that don’t use Clover, about 10% have been converting to Clover each year, William Blair Analyst Cristopher Kennedy mentioned in a Friday note to investor clients. 

During its Wednesday investor conference, Fiserv laid out its organic revenue growth projections for 2024, including growth between 18 and 20% for its merchant solutions business; 5 to 7% for its financial solutions business; and 11 to 13% for the company overall. Fiserv reported revenue of $17.74 billion last year, a 9% increase over 2021.

Under the merchant category, Clover is expected to generate $2.1 billion in revenue this year, according to the conference presentation. Fiserv is projecting that figure will reach $3.5 billion in 2025, and $4.5 billion in 2026.  

To fuel growth in the coming years, Fiserv is focused on adding more Clover clients, growing with them and getting them to sign on for more services. Clover also aims to add verticals the business doesn’t yet serve, such as government or education, Kereere noted.

Additionally, Fiserv plans to expand Clover’s international footprint. Clover now has nascent operations in Argentina, the U.K., Ireland, Germany and the Netherlands, Kereere said. Fiserv also expects to bring Clover to Brazil, Mexico, Australia, Singapore and Hong Kong by 2025, Kereere added. 

Currently, revenue outside of North America accounts for 10% of Clover revenue. Payment volume outside the U.S. is growing twice as fast, Kereere said.