Dive Brief:

• Payments processor Fiserv ranked as the largest non-bank merchant acquirer last year, outpacing its chief rival, Fidelity National Information Services, also known as FIS, in terms of the number and value of transactions handled, according to industry research firm Nilson Report. Both lagged behind the no. 1 acquirer, JPMorgan Chase, the biggest U.S. bank.
• Fiserv handled 35.38 billion transactions worth $2.03 trillion last year while its chief rival FIS’s Worldpay unit booked 31.42 billion transactions worth $1.66 trillion, a March report from Nilson said. In other words, Fiserv logged 11% more transactions worth 4% more.
• Fiserv also grew at a faster rate last year than FIS. Fiserv’s growth rate last year over 2021 was 9.1%, in terms of volume, and was 3.9%, in terms of value, while FIS’s transactions at Worldpay grew at a rate of 6.1%, with a value increase of 1.3%, Nilson said.

Dive Insight:

The latest ranking is a reversal of the standings between the two mega processors in the Nilson report last year. For 2021, Jacksonville, Florida-based FIS edged out Brookfield, Wisconsin-based Fiserv for the top spot, as the former grew at a faster rate.

Merchant acquirers process transactions for retailers, restaurants and other merchants when consumers pay using a credit card at the point of sale. They also settle transactions on behalf of digital payment companies like PayPal, Stripe and Block, and independent sales organizations. 

The latest standings come as both Fiserv and FIS are under pressure from investors to reconsider their conglomerations of payments businesses. In December, FIS appointed a new CEO, Stephanie Ferris, who has embarked on also on a cost-cutting campaign. The company also plans to spin off its Worldpay unit, once again making that operation a separate publicly-traded company after a failed merger. 

The company’s competitor, Fiserv, has also been reducing expenses and sold some business units last year.

David Robertson, publisher of The Nilson Report, attributed Fiserv’s slide in the 2021 ranking to the end of a joint venture the company had inherited. That joint venture with First Data — which Fiserv acquired in 2019 — and Bank of America dissolved in 2019 and the break-up took place in June 2020.

In any case, Robertson correctly predicted last year that Fiserv would be back on top of the ranking in 2022, with help from its fast-growing Carat and Clover units. While Carat provides omnichannel services to big companies, Clover focuses on providing services to small and mid-sized merchants.

The five biggest processors, also including the bank Wells Fargo and merchant acquirer Global Payments, handled a total of 123.58 billion payments in 2022, up about 5.7% over 2021, according to Nilson.

With respect to the merchant acquirer standings, an industry consultant, The Strawhecker Group, estimated different outputs for the rivals, but Fiserv still landed on top. TSG estimated Fiserv handled 48.47 billion transactions last year worth $1.62 trillion while Fiserv processed 28.5 billion transactions worth $1.59 trillion.