Fintech Player Fiserv Acquiring First Data In Play That Could Boost Blockchain Use

Fiserv is acquiring First Data in an all-stock transaction worth roughly $22 billion. Both Fintech players have discussed how Bitcoin and Blockchain impact their payment processing businesses.

In making the announcement, Fiserv said the deal will allow it to offer several “leading technology capabilities.” The announcement doesn’t specifically address the crypto space. However, Fiserv has made Blockchain-related acquisitions in the past as it pursues modernizing payments.

The acquisition, announced Wednesday, provides that First Data shareholders will receive a fixed exchange ratio of 0.303 Fiserv shares for each share of First Data common stock they own.

Fiserv CEO Jeffery Yabuki will be the chief executive officer and chairman. First Data CEO Frank Bisignano will be president and chief operating officer. He will also join the board of directors.

The deal will close by the second half of 2019. After it closes, Fiserv shareholders will own 57.5% of the combined company. First Data shareholders will own 42.5%, on a fully diluted basis, according to the release.

When the markets opened Wednesday, First Data was up sharply – almost 19% to $20.86. Fiserv was down about 5.7% to $70.80.

Blockchain Excites Fiserv, First Data Chiefs

Yabuki and Bisignano have spoken about how cryptocurrencies and Blockchain are impacting the financial sector. Fiserv has even invested in the technology. This includes investing in crypto investment firm Digital Currency Group (DCG). It builds and supports Bitcoin and Blockchain companies.

There views are in line with others who see the potential of Blockchain. CCN.com cited a recent report that says Blockchain has been unable to break away from the early “pioneer” phase with most use cases failing to take off.

Both CEOs were among the first executives from the finance sector to speak positively about Blockchain and the crypto space.

While the CEOs are impressed with the potentials of Blockchain technology, Bisignano has singled out Bitcoin. For example, Bisignano has said he is prepared to continue investing heavily in commerce-enabling technology outside of core payments technology, particularly cryptocurrency.

To CNBC, a few years back when Bitcoin’s price was climbing, Bisignano said to CNBC a few years ago first Data was watching innovation intently. Also, it was working to support “any currency that has real traction.” He noted that First Data had run applications that enable Bitcoin, adding “we feel really good about that.”

Fiserv’s Chief Puts Blockchain’s Views in Writing

On Monday, Yabuki penned a piece called “A Promising Future with Blockchain in Electronic Payment Gateways.” In it, he discussed how Blockchain technology can dominate the e-market. Digital retailers are using the technology to improve efficiencies in online payment collection and processing, he wrote.

Citing IBM, Yabuki points out that 65% of banks will leverage Blockchain for online payments and investments by 2020.

“Fiserv intends to continue to leverage such advanced technologies and provide solutions relevant to the trends to stay ahead of the competition curve.”

Blockchain’s Potential Keeps Spreading

Payment space players join others in their optimism over the benefits of Blockchain. Others include the travel industry. Even NASA is getting on the Blockchain train.

Although there is no specific mention of Blockchain in the acquisition announcement, there are notes about innovation goals. For example, the combined company will provide distribution channels to financial institutions, merchants and billers.

Yabuki states:

“Through this transformative combination, we expect to redefine the manner in which people and institutions move money and information.”

 

 

Last modified: March 4, 2021 2:51 PM

Tedra DeSue: If you can buy it, trade it, invest in it, or sell it, I write about it. For more than 20 years, I've covered all things finance. Based in Atlanta, Ga., I threw myself into covering the crypto space with a keen understanding that it would be an industry disruptor. I'm in constant search for the real Satoshi Nakamoto!