MILWAUKEE, Wis.–Fiserv doubled its cost-cutting target to $1 billion as it reported flat organic revenue and a $6.45 billion goodwill impairment, underscoring the expense of modernizing established payments businesses.
The company’s shares rose roughly 14% in premarket trading Tuesday, Nov. 3, after a narrow third-quarter earnings beat, PYMNTS reported. Its expanded Project Elevate program centers on artificial intelligence, software consolidation and eliminating overlapping infrastructure.
According to PYMNTS, Fiserv has reduced its workforce and contractor base by 3,000 since CEO Takis Georgakopoulos took over, including cuts of more than 10% to senior management.
PYMNTS reported that Georgakopoulos said the company’s effort to simplify operations and expand AI use would allow it to improve efficiency while continuing to invest in innovation.
Consolidating Technology
Fiserv plans to consolidate merchant acquiring services onto Commerce Hub, reducing its reliance on more than a dozen legacy gateways and switches worldwide, PYMNTS reported. Its Core Modularity initiative would move banking systems toward shared software components.
The company also identified more than a dozen smaller products with limited customer adoption that it could phase out or exit, according to PYMNTS.
In its analysis, PYMNTS said the overhaul illustrates how acquisitions and product expansion can leave financial technology companies maintaining costly, overlapping systems. Scale that once helped protect processors from competitors can also make modernization more expensive.
Growth Remains a Challenge
Merchant Solutions organic revenue fell 2% in the third quarter, while Financial Solutions grew 2%, leaving overall organic revenue flat, PYMNTS reported. Clover gross payment volume rose about 10%, Commerce Hub transactions doubled and core banking client wins increased more than 50% from a year earlier.
PYMNTS noted that higher payment volumes do not necessarily produce comparable revenue growth when pricing pressure, product mix and customer acquisition costs weigh on returns. Fiserv’s challenge is to generate more revenue from services including embedded finance, merchant lending and digital banking, the publication said.
Georgakopoulos said AI agents in Clover’s risk-hold process reduced decision times by two-thirds and false positives by more than 40%, according to PYMNTS.
However, PYMNTS cautioned that those operational improvements do not establish that Fiserv has achieved companywide savings. The company still must show that automation can produce sustainable margin gains after implementation, oversight and technology costs, the publication said.
