Fiserv to Enhance its Embedded Finance Capability with Acquisition of Payfare Inc.

Rhea-AI Summary

Fiserv (NYSE: FI) has announced a definitive agreement to acquire Payfare Inc. (TSX:PAY), a program management solutions provider specializing in new economy workforces. The acquisition, expected to close in first half 2025, will enhance Fiserv's embedded finance capabilities by integrating Payfare's card program management, white-label consumer app, and microservices orchestration layer.

The combination aims to strengthen Fiserv's solutions in embedded banking, payments, and lending, particularly benefiting large enterprises and financial institutions. The deal complements Fiserv's existing processing, bank ledgers, and integrated value-added services.

Positive

• Strategic expansion into workforce payments for gig-economy companies
• Enhancement of embedded finance capabilities through technology integration
• Strengthening of service offerings for large enterprises and financial institutions

Negative

• Extended timeline for deal closure (first half 2025)
• Transaction subject to multiple approvals (shareholder and court)

Insights

Financial Analyst

This strategic acquisition strengthens Fiserv's position in the rapidly growing embedded finance market. Payfare's expertise in gig economy payments and program management fills a important gap in Fiserv's portfolio. The deal's timing, set to close in H1 2025, allows for careful integration planning and regulatory approvals. The combination will create a more comprehensive embedded finance platform, enabling Fiserv to capture a larger share of the $7.2 trillion embedded finance market opportunity by 2030. Payfare's white-label solutions and microservices architecture complement Fiserv's core processing capabilities, potentially accelerating revenue growth in the high-margin embedded finance segment. The acquisition demonstrates Fiserv's commitment to expanding its digital payment capabilities and strengthening its competitive position against both traditional players and fintech disruptors. This move particularly enhances Fiserv's ability to serve large enterprises seeking modern, integrated financial solutions.

Tech Expert

The technological synergy between these companies is particularly compelling. Payfare's microservices orchestration layer represents a modern, scalable architecture that can be seamlessly integrated with Fiserv's existing infrastructure. The white-label consumer app capability is a significant addition, providing Fiserv with a ready-to-deploy solution for clients seeking branded financial services applications. The combination of Payfare's agile program management platform with Fiserv's robust processing systems creates a more comprehensive embedded finance solution stack. This integration positions Fiserv to better compete in the digital banking-as-a-service space, particularly important as more non-financial companies seek to embed financial services into their offerings. The technical architecture of this combined solution will likely reduce time-to-market for new features and enable more flexible customization options for enterprise clients.

Market Research Analyst

This acquisition is strategically timed to capitalize on the explosive growth in gig economy payments and embedded finance. The gig economy workforce is projected to grow at a CAGR of 15.4% through 2026, making Payfare's specialized solutions increasingly valuable. The deal strengthens Fiserv's competitive position against both traditional financial technology providers and newer fintech entrants. By acquiring rather than building these capabilities internally, Fiserv gains immediate market access and proven technology, accelerating its time-to-market advantage. The focus on large enterprises and financial institutions as primary customers suggests significant revenue potential, as these clients typically have larger transaction volumes and higher retention rates. This move also positions Fiserv to capture a larger share of the embedded finance value chain, potentially leading to improved margins and recurring revenue streams.

Payfare’s technology and program management capabilities complement Fiserv’s embedded finance offerings

MILWAUKEE--(BUSINESS WIRE)-- Fiserv, Inc. (NYSE: FI), a leading global provider of payments and financial services technology, today announced it has entered into a definitive agreement to acquire Payfare Inc. (TSX:PAY), a provider of program management solutions with a particular focus on new economy workforces. The transaction is subject to obtaining shareholder and court approvals and other customary closing conditions and is expected to close in the first half of 2025.

This acquisition complements the embedded finance solutions of Fiserv with card program management, a white-label consumer app, and a microservices orchestration layer. These Payfare offerings, combined with the strengths of Fiserv in processing, bank ledgers and integrated value-added services, enhance the Fiserv solution in embedded banking, payments and lending and help meet needs of large enterprises and financial institutions.

“Payfare has built a reputation as an innovator in workforce payments for gig-economy companies,” said Frank Bisignano, Chairman, President and Chief Executive Officer of Fiserv. “Together, we can accelerate the delivery of embedded finance solutions for all of our clients, empowering their next chapter of success. We look forward to welcoming the talented Payfare team to Fiserv.”

“Joining Fiserv is a tremendous opportunity for Payfare,” said Marco Margiotta, CEO and Founding Partner of Payfare. “We recognize that Fiserv gives us enhanced scale and technology which better positions us to serve a growing number of large organizations and deliver a modern digital experience.”

About Payfare Inc.

Payfare is a leading, international Earned Wage Access company powering instant access to earnings through an award-winning digital banking platform for today’s workforce. Payfare partners with leading e-commerce marketplaces, payroll platforms and employers to provide financial security and inclusion for all workers.

About Fiserv

Fiserv, Inc. (NYSE: FI), a Fortune 500 company, aspires to move money and information in a way that moves the world. As a global leader in payments and financial technology, the company helps customers achieve the best results through a commitment to innovation and excellence in areas such as account processing and digital banking solutions; processing of card issuers and network services; Payments; e-commerce; acquiring and processing business; and the cloud-based business management and point-of-sale platform Clover^®. Fiserv is a member of the S&P 500^® Index and has been recognized by Fortune^® with the title of World's Most Admired Companies™ in nine of the last 10 years. Visit fiserv.com and follow social media for more information and the latest company news.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20241223064493/en/

Media Relations:

Melissa Moritz

External Communications

Fiserv, Inc.

516-410-1188

melissa.moritz@fiserv.com

Investor Relations:

Julie Chariell

Investor Relations

Fiserv, Inc.

Julie.Chariell@fiserv.com

Source: Fiserv, Inc.

FAQ

When is Fiserv's acquisition of Payfare expected to close?

The acquisition is expected to close in the first half of 2025, subject to shareholder and court approvals and other customary closing conditions.

What capabilities will Payfare add to Fiserv's (FI) embedded finance offerings?

Payfare will add card program management, a white-label consumer app, and a microservices orchestration layer to Fiserv's embedded finance offerings.

How will the Payfare acquisition enhance Fiserv's (FI) market position?

The acquisition will strengthen Fiserv's position in embedded banking, payments, and lending, particularly for serving large enterprises and financial institutions.

What is Payfare's specialization that attracted Fiserv (FI)?

Payfare specializes in program management solutions with a particular focus on new economy workforces and gig-economy companies.