Dive Brief;

• Fiserv recently acquired Pineapple Payments for an undisclosed amount. This is the second acquisition for  Fiserv this year with the payment giant acquiring Ondot Systems, a digital card service platform company earlier in January.

• Founded in 2016, Pineapple Payments provides multiple payments channels to small and medium-sized businesses (SMBs). The company provides online payment options along with hardware point-of-sale solutions, which Fiserv is looking to capitalize on.

• The acquisition of Pineapple Payments is expected to close in Q2. Fiserv expects its internal revenue to grow about 8% to 12% this year and that there will be “no significant extension of COVID-19 impacts beyond the first half of 2021.”

Dive Insight;

Through the acquisition of Pineapple Payments, Fiserv is looking to bolster sales of its Clover point-of-sale system hardware and services. 

“We expect the acquisition to accelerate the delivery of new and innovative capabilities from Fiserv, such as Clover, Clover Connect, and CoPilot, to Pineapple Payments clients,” a spokesperson told Payments Dive.

Pineapple Payments provides payment channels for mobile apps, online payments, electronic invoicing, and physical POS solutions. The Pittsburgh-based payment solutions company currently serves 25,000 merchants on its platform. 

Baird Equity Research estimates that Pineapple Payments might generate revenue between $45 and $50 million by 2022 due to the acquisition by Fiserv. 

“The acquisition will expand the reach of Fiserv's payment solutions, including Clover and Clover Connect, through the technology and relationship-led distribution channels of Pineapple Payments,” the research stated.

Clover’s point of sale system’s payment volume increased 25% to $34 billion in Q4 2020, bringing it to $135 billion annually. Fiserv’s total revenue also increased to $14.85 billion in 2020, compared to $10.18 billion in 2019.

“Our results were once again driven by strong performances in our portfolio of SMB clients, supported by our Clover platform,” Rover W. Hau, CFO, and Treasurer of Fiserv said during their Q42020 earnings call.

Baird also expects Pineapple Payments to add about $15 to $20 million of annualized EBIT in a couple of years due to their books merging with Fiserv’s. Upon the completion of the acquisition, Pineapple Payments will dissolve and merge into the “Global Business Solutions organization of Fiserv,” the Fiserv spokesperson said. 

“With the scale and expertise of Fiserv, we will make commerce even easier and more accessible in a variety of different segments,” Jon Halpern, President of Pineapple Payments said in the press release. “We look forward to our talented teams working together as we set a higher standard of service for our clients.”