Earlier this week, Fiserv, Inc. (FISV) entered into a partnership agreement with Earthport. This was done with the clear intent of ameliorating the automated clearing house (ACH) by introducing international payment solutions for its clients.
Fiserv’s PEP+ ACH mainframe shall now be enhanced by Earthport’s advanced solutions which would not only escalate productivity levels but also cater to providing a seamlessly flexible, user-friendly and inexpensive payment processing platform for its customers. The secure cross-border payments solution shall now be accessible globally across over 50 countries.
Management gladly expressed its exuberance on this momentous occasion by stating that it has finally been able to meet the demand for providing cross border ACH payment solutions internationally with this partnership. Apart from market share proliferation, the venture shall be bolstered by the globalization trends of the world economy.
We believe that the current Earthport integration shall be lucidly profitable for Fiserv, primarily because Earthport holds a reputation of providing state-of-the-art payment service solutions. Furthermore, in 2011, nearly 50% of U.S. ACH transactions were made using the Fiserv platform, hence this is a niche segment for the company and such advancements would only burgeon demands for the company in the ACH market.
Fiserv appears to be in quite a formidable position to battle ominous competition in the industry with this partnership. Big players to remain wary of, however, include Heartland Payment Systems, Inc. (HPY), Envestnet, Inc. (ENV) and Alliance Data Systems Corporation (ADS).
The company currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also maintain a long-term Neutral recommendation on the stock.
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