With its Q2 2022 results, Fiserv (parent of First Data) was one of the first payment companies to hint at the impact of both inflation and supply chain disruptions. Bob Hau, CFO, said that margins had been hit by “cost inflation for both labor and material, including point-of-sale terminals.” He went on to explain higher capex spending due to “buying significant amounts of inventory, both in terms of point-of-sale devices, but also in paper and plastic to protect our clients.” So, not only have payment terminals become more expensive but the large players have felt the need to hoard stocks to assure supply to their customers.
In other news, Fiserv continues to report positive numbers for Clover. This is an all-in-one small business product that include software and payments which accounts for c.20% of Fiserv’s SMB revenues. Gross payment volume through Clover was an impressive $57bn in Q2. Fiserv’s revenue was reportedly up 15% year and it states that 15% of Clover merchants now take software/services in addition to the standard payment acceptance product. This was up 3.5ppts.
Clover clearly works best when pitched as part of an integrated vertical offer. Fiserv said that BentoBox was now fully integrated to Clover for eCommerce payments. When sold together (Bento + Clover) “we see an over three times increase in average revenue per user versus a Clover-only restaurant.”
Fiserv also sounded bullish on Carat, its “operating system for enterprise clients.” Revenue was up 22% with strong growth reported in Petrol and Quick Service Restaurants. It’s not clear to the casual observer whether Carat is an actual thing or just a clever marketing wrap around Fiserv’s existing product set. Nonetheless, it boasts an impressive client list including McDonalds, Microsoft and Adidas.