Fiserv Inc. (FISV - Analyst Report) recently announced that its Popmoney person-to-person payment service has been incorporated with mobile banking and payments platform, Mobiliti. The integration of the services will enable users to make person-to-person payment directly from their mobile bank account.
According to a study by McKinsey & Company, over 16 billion person-to-person payments are being made every year and majority of them are through cash and checks. The study also reflected that electronic payment is emerging as a popular platform for transferring money.
One of the primary reasons behind the platform’s popularity is the rapid adoption of smartphones and tablets. According to a report from Forrester, 51% of tablet banking users and 46% of mobile banking users were in support of person-to-person payments to be enabled from their devices.
This huge demand has prompted financial institutions such as Fiserv to adopt technology that offer both banking and payment options from a central hub. In the recently ended fourth quarter, Fiserv signed 134 Mobiliti clients and 113 Popmoney clients, which reflected strong demand for its services.
In such a scenario, the integration between the two platforms will facilitate users to manage their mobile banking and payment options from a single platform. We believe that this will further boost Fiserv’s user base going forward.
Fiserv has been expanding its foothold in the financial and payment solutions business through its diversified product portfolio and continued technology upgrades. The company’s advanced product ranges are likely to further enhance its revenue streams. Moreover, the company’s various contract wins have enabled Fiserv to expand its presence in the industry.
Additionally, Fiserv has a loyal and broad customer base. In the recently concluded fourth quarter of 2012, Fiserv extended its electronic payment and presentment relationship with Bank of America (BAC - Analyst Report) for another 10-year term. Fiserv signed 113 electronic bill payment clients and 40 debit processing clients in the quarter, which include power generation company American Electric Power (AEP - Analyst Report) and healthcare provider Humana (HUM - Analyst Report).
However, volatile macroeconomic environment, banking and financial service consolidation, poor cash flow, tough competition and increasing industry regulations are the primary concerns in the near term.
Currently, Fiserv has a Zacks Rank #2 (Buy).