Will First Data & Valley National Benefit from New Deal?
First Data Corporation FDC recently teamed up with Valley National Bank to offer secure commerce solutions to the bank’s merchant clients. Valley National is a wholly-owned subsidiary of Valley National Bancorp (VLY).
The duo signed a long-term agreement per which First Data will provide its Clover platform to the bank’s business clients across more than 200 of its branches in New York, New Jersey and Florida. First Data will also make available its e-commerce solution set to the bank that enables businesses of all sizes to effortlessly conduct online and mobile transactions.
Everything Looks Centered Around Clover
We see the new move as another attempt by First Data to boost its Clover platform. The platform offers a comprehensive set of software and hardware point-of-sale solutions to businesses of all sizes. It earns both core acquiring as well as incremental revenues for First Data.
First Data Corporation Price and Consensus
First Data Corporation Price and Consensus | First Data Corporation Quote
Of late, the company has been trying to shore up Clover through sponsorships and philanthropy. Earlier this month, it did free distribution of its Clover Go mobile debit and credit card reader to business owners of Harvey hit Houston. (See more: First Data Aids Harvey Affected Businesses with Clover Go)
Last month, it entered into a sponsorship deal with Kyle Larson and the No. 42 Chevrolet SS team for the forthcoming Monster Energy NASCAR Cup Series (MENCS) at Martinsville Speedway and Talladega Superspeedway. Clover will be seen on Larson’s No. 42 Chevy. (See more: First Data to Sponsor Number 42 in Monster Energy Series)
GBS Boost Likely
First Data’s Global Business Solutions (GBS) segment, which includes both e-commerce and Clover solutions, is likely to benefit from this partnership.
In the last reported quarter, the segment increased 3% year over year on a reported basis and 5% on a constant currency basis driven by strong results across North America, Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC) regions. (See more: First Data Q2 Earnings Match Estimates, View Intact)
First Data has a prudent growth plan on track and a healthy business around large and small banks. Moves like this could help it attract new customers and keep the existing ones hooked on its services.
The company has been strengthening its balance sheet, expanding margins and improving cash generation capacity through continued focus on innovation and strategic investments. This is required especially when it’s increasingly facing tough competition from the likes of PayPal PYPL, Square SQ and Mastercard MA.
First Data currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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