CONNECT WITH US
Fintech

Fintech

Fiserv Wants AI to Fix What Decades of Payments Growth Made Expensive

PYMNTS – Fintech logo

Published on

Add as a preferred source on Google
Fiserv Wants AI to Fix What Decades of Payments Growth Made Expensive

Fiserv beat Wall Street, but its $6.45 billion write-down tells another story. The payments giant is confronting the cost of maintaining legacy infrastructure even as revenue stagnates and margins tighten.

AI is at the center of Fiserv’s $1 billion cost-cutting gamble. The company has eliminated 3,000 employee and contractor positions and is using AI to automate fraud reviews, customer service and software development. The bigger bet: making its sprawling payments infrastructure cheaper to operate.

Cutting costs is one thing. Growing again is another. Clover payment volume rose roughly 10%, but Fiserv’s merchant revenue still contracted. The next test is whether automation and platform consolidation can deliver sustainable growth, not just higher margins.

Fiserv on Tuesday (Nov. 3) gave Wall Street two very different numbers to consider: A $6.45 billion goodwill impairment and a $1 billion cost-cutting target.

Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

The market appeared more interested in the second number. Fiserv shares rose roughly 14% in premarket trading Tuesday after the company reported a narrow third-quarter earnings beat.

But Fiserv’s results capture a growing contradiction in the payments industry. The same scale that once made established processors difficult to displace can also make them expensive to modernize. Legacy infrastructure, overlapping technology investments and increasingly complex customer requirements are colliding with pressure to deliver faster, cheaper and more integrated financial services.

Fiserv’s response has been to double down on efficiency. Literally. The payments giant used its earnings to announce it had doubled its Project Elevate cost-savings target to $1 billion.


Source link
Related Topics:Fintech

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.