Dive Brief:

• Mega payments processor Fiserv and Deutsche Bank, the biggest bank in Germany, are locking arms in a joint venture to offer card and digital payment acceptance services to merchants in that country, the two companies jointly said in a release yesterday.
• They will target small and mid-sized businesses as clients, with a few thousand expected at the start of the venture, and a total target clientele of about 800,000 eventually, the two companies said.
• The new venture will make use of Fiserv's Clover cloud-based point-of-sale software, a fast-growing service unit that had a 36% surge in payment volume last year compared to 2019.

Dive Insight:

Brookfield, Wisconsin-based Fiserv has been building up its Clover business ever since it acquired the business as part of its 2019 purchase of First Data. That combination enlarged Fiserv, making it the fifth-largest U.S. merchant payment acquirer last year, based on card transaction volume, according to Nilson Report, an industry research firm.

​Now, Clover is aiding Fiserv in its international expansion as it builds a presence through the new joint venture in Europe's largest economy. Clover's hardware and software technology lets small and mid-sized merchants accept payments, process transactions, use online ordering, offer e-commerce brands, and use customer loyalty tools. Fiserv says in its annual report that Clover "is one of the largest open architecture platforms of commerce-enabling solutions and applications in the world."

Meanwhile, the joint venture will allow Deutsche Bank a way back into payments processing, after it abandoned the market in 2012 by selling its business in the arena to Atlanta-based Evo Payments International, according to a Wall Street Journal report. Evo Payments was the 17th-largest merchant acquirer in the U.S. last year, according to Nilson Report.

Fiserv is facilitating Deutsche Bank's re-entry at a time when the payments industry is on fire, with new financial technology companies attracting billions of dollars in investments to create new systems for payments channels between businesses and consumers, and in other areas. The business-consumer payment channel became particularly attractive over the past year as the COVID-19 pandemic increased online transactions and boosted consumer acceptance of digital payment channels.

"Together with Deutsche Bank, we will be able to help small and mid-sized enterprises in Germany do business in new ways, bringing them a compelling combination of solutions and services to streamline their payment acceptance and banking capabilities," said Fiserv Executive Vice President John Gibbons said in the release. “We look forward to bringing new solutions to merchants as they continue to advance their payment acceptance capabilities to meet changing customer expectations in a rapidly evolving post-Covid world," said Gibbons, who heads Fiserv's European, Middle East and Africa region operations.

In April, Fiserv partnered with the major digital payments company PayPal in a tie-up that enabled its customers that use Clover to also accept payments via PayPal, and PayPal's Venmo mobile option. That new offering allows consumers to scan a merchant QR code and use their digital wallet apps to make in-person purchases and receive electronic receipts without touching merchant equipment.

Fiserv has also been buying up smaller fintechs to strengthen its hand in the increasingly competitive market fueled by the upstarts' innovations. Over the past year, Fiserv's acquisitions included purchases of Ondot; Pineapple Payments; and Radius8.