All right. Good afternoon, everybody. I'm Jason Kupferberg, the payments processing and IT services analyst here at Wells Fargo. This is our last session of the day in the main room here at our payments and FinTech symposium. We're super excited to have Michael Lyons here, of course, CEO of Fiserv. Lot of ground to cover, and we're gonna make the best use of our 35 minutes as we can. Thank you very much.
Absolutely
Thank you very much Michael, for being here. It feels to us like there's definitely been a general degree of, I'll call it stabilization in your business. You know, you took some time when you first took the seat almost a year ago, right? Hard to believe, but almost a year ago, and then you did a reset in October. It does feel like there's been some stabilization since then. You know, day-to-day blocking and tackling, I assume, is kind of like the key every day. That's what everyone's focused on as you execute the turnaround. You've got the refreshed senior leadership team as well. Talk about how you guys are just managing and monitoring progress, you know, against the pillars of the One Fiserv plan.
Yeah. Yeah. Well, first of all, thank you for having us.
Yeah, sure.
We have a great partnership with Wells Fargo, not just on the client side, merchant and financial solution side, but you're a big bank and big advisor to us, so it's good to be here and good to be with you people.
Thank you.
Yeah, took over in May. We did what we talked about as a rigorous and comprehensive review of the company in the latter part of summer and throughout the fall. Made the announcement in October. We learned a lot of different things, but we always summarize it to the four of, we had some competitive and client service gaps that we needed to fill. You put that aside, we had two great platforms, two great businesses in Financial Solutions and Merchant Solutions that we see lots of ways to leverage both individually and together. That's first thing. Second thing is we saw that we had to shift our focus and priorities towards client-driven, recurring, long-term, sustainable revenues.
The third piece, as you mentioned, we had to bolster the management team and make some changes to the board, and we've completed both of those. The fourth is obviously we had to reset the long-term growth expectations of the company and be very clear about what the secular drivers of our business are versus cyclical drivers. Obviously, we've got a business that's got cyclical elements to it, and you can grow double digits at a sustainable rate for four years, and that's there, and that hasn't changed. The secular drivers, when you took away some of those cyclical factors-
Yeah
Indicated that the business had been growing over the last four years at the same rate, general rates range, which has been a very consistent narrow range for the last 30, 40 years since the companies have been founded. Really we found nothing changed. We had two great businesses, but we had some significant cyclical factors and some episodic revenues we had to address. Since then, we haven't learned a whole lot new.
Which I guess is a good thing.
It's a very good thing.
Yeah.
We understand our business fully, and we understand what the priorities are, and 100% of the focus is on executing against our plan. We call that the One Fiserv plan. It's got five pillars against it. An important element of executing well against the five pillars is having a great management team do it. I think, if there's been a surprise, we've been blown away by how much talent wants to come and join the team.
Mm.
We've been super pleased about one, the willingness, the desire to come join, and then the quality of the team we've put together. By Investor Day, and a big part of the Investor Day, we'll be able to showcase, certainly Takis and Dhivya, and Paul. You obviously know Paul well. But below them is an unbelievable team. We had a strong team already, and we've complemented what was there with some incredible outside hires that we're still bringing in.
How do you prioritize your time on just a day-to-day basis as you're trying to make sure that the organization performs the plan?
We're literally trying to. If you're not working on one of the five pillars, the action plan, you're doing something.
Yeah
You know, that we don't want you to do.
Right.
Obviously we're really close to the five pillars but run the company with a client-first mindset that goes to service, goes to resiliency and quality of our products, quality of implementations, quality of conversions. Second is really everything Clover, five sort of vectors to the Clover growth and experience story they're working on there. The third is a broad bucket, but we've identified a series of modernization pieces of technology and some existing technology that we had discovered, implemented, started building but hadn't finished yet. This is Experience Digital.
Mm-hmm.
It's Cash Flow Central. It's the modernization of our card, the legacy card platform called Optis, and the creation of a new modern API-based, cloud-based program, sort of the FinTech for cards, which is called Vision Next. It's our stablecoin platform. It's the embedded finance platform.
Right.
We've identified 10 or 12 things. They're fully funded. They're fully resourced. We're clear in how we're running towards a date. For a number of them, we made very specific dates at the forum that we'll hit, and we're managing the heck out of those projects. If you're not in that, we're deprioritizing capital to you because these are the most important things to the company.
Okay.
Fourth thing was Project Elevate.
Yep
In full swing, coming up on our first checkpoint, there. That is an inside look at our own, you know, examining ourselves, for opportunities to be simpler and more efficient, and obviously leverage modern technology in doing that. The fifth piece is, it ties into third, but, making sure we optimally manage every dollar of capital that you all have entrusted us with. That goes to, where are we putting incremental capital in terms of the billion native CapEx? Where are we not? What assets are we gonna hold, what assets we are not, and then importantly, maintaining the investment-grade rating of the balance sheet.
Right. Right. A lot of great
If it's not one of those five things, which I'm not saying.
Right. Yeah. Yeah.
You know, the law's covered there. If you're not in those five, we're not-
You're not spending your time.
That's how we're keeping ourselves organized and focused.
When you think about the five pillars of the One Fiserv plan, I mean, this is, you know, late October is when you laid them out, right? Do you feel like any of them has become a shorter putt or a longer putt since then?
No, I think, I mean, back to the earlier question, we were fully aware of what we needed to deal with coming out of it. Some of them have a finite life to them. Some of them, you know, the Clover stuff we could be working on, you know, maybe that there's perpetual aspects of that.
Sure.
The part three with all the modernization products and completion products, those will finish, and they'll be recycled by a new set. None of it is.
Right.
It's exactly what we thought it was. There are pieces of it that are harder than others in that aspect.
Right.
It's not different today than what we thought in October.
Yeah. Yeah. I feel like people are kinda like waiting to hear like, "Oh, this." You know? But it's kinda steady as she goes.
Yeah.
So far, no surprises.
No surprises.
Okay.
I think Q4 sort of demonstrated that there was.
Yeah
... and, uh-
It was kinda down the middle really. Yeah.
I think back to the four big takeaways from the review we did. It's a very easy business to understand. We often get, "Oh, it's a big business. You got a lot of aspects." It's a very simple business to understand what we do. I mean, we're a transaction and account-based processing company.
Yeah.
That's what we do, and so we have to understand that. We get paid for accounts on file, payments volume, and transactions. There should be a logical algorithm between the revenues and the activity levels.
Right
you should be able to demonstrate that, and it's our responsibility, Walter, and Paul's responsibility to point out anomalies as to what may cause a difference in those. Obviously, we've got to work through some noise to get to where that algorithm's clear but
Sure.
back to the execution part, we know exactly what we have. We know exactly what we have to do, and we're working on it.
Yeah. Yeah. I mean, the 2026 guidance that you provided last month, I mean, was very consistent with what you had kinda previewed on the third quarter call. I don't think there was really surprises there. Maybe it's a little bit more back-half loaded than people had understood it to be or had envisioned. Maybe just touch on kind of visibility on the second half acceleration. I mean, clearly, especially by the time you get to Q4, you've got some easy compares, right?
Yeah.
Which we can see. We'd love to get your perspective there. Maybe just as part of that, we're asking every company at the conference just any Middle East exposure we need to be cognizant of?
Yeah. Couldn't get two more different questions packed in there.
Exactly.
The, uh-
I wouldn't do this on an earnings call. You gotta do it at the.
You know, the trajectory of how growth will play out in the year is largely related to the reset we did in the fall, which creates
Yeah
this comparable issue for the first half.
Right
of this year versus the first half
Right
Of last year. What we've said is, you know, down low single digits, which we say is 1%-3% in the first half on the top line. There's just a lot of noise, and what we're trying to get you to is give you the underlying factors driving the growth algorithms while we work through comparability noise.
Yep.
As you get in the back half of the year, that should those two should make a lot more sense. The back half of the year will look a lot more what the go-forward company will look like.
Right. Right.
Between getting to those numbers and you being able to see them, you know, we'll talk through. We've said we're excited to present a constant compounder investment case, and you start to see the attributes of that are certainly in our business, and you start to see the manifestation of the numbers of that in the second half of the year. A lot of the noise is just on that comparability. Nothing material in the Middle East side.
Okay, good. Wanna just check that box. Going back to the last earnings call, I think you made some comments about attrition in the core banking business still, you know, somewhat higher than you'd like to see it.
Yeah.
Right? I think there's a perception in the investment community that, you know, Fiserv could be vulnerable to churn, depending how some of these, you know, platform updates or, migrations progress. You know, what sort of counterarguments should we be considering, right? You know, given that you've been very clear you're not forcing-
Right
any customers to convert.
Yeah. We love the core banking business.
Yeah.
It's been at the heart of the company since the founding of the company. It's a great business, and we're super proud to support 30 little over 3,000 credit unions and banks. We're the mitochondria of their operations every day, and it's a great business for us. Under the prior strategy, which really started in 2022, there was a deliberate effort to consolidate cores, starting with the credit union cores. That decision to migrate the cores and move people off of one core to another happened in a period where our technology wasn't as resilient as it should have been, and our service isn't at a level that we would be that we'd wanna run the service at.
You take the aggregation of those three, and not surprisingly, you know, our clients were frustrated by that. If you're in a hole and wanna get out, the first thing you do is stop digging. What we said at the forum in-
Yeah
In September was that there is no core consolidation story. It's our customers. We respect our customers. If they ever wanna make a change off of their core technology, it's on their timeline, not ours. We adjust our numbers and adjust our guidance to reflect that we would continue to keep all of our cores at a modern level. There's some interesting developments around the technology front around that we can talk about today, and we'll talk about more at Investor Day. There is no core consolidation story. What hasn't changed is there is a core modernization strategy, and again, there's
Technology gives us different ways to look at what's always been, "Oh, you gotta modernize one and move another to the modern one." There are different aspects and different approaches we're gonna take to that from here. We're excited about that, and obviously, time gives you a different perspective on everything. There's no core consolidation story. There's 100% a core modernization strategy. Back to the five pillars is a clear focus on improving service, and we've spent the money to do that. We're focused on driving that experience change and helping our customers get the best out of technology they've acquired from us. There's clear introduction of new functionality, new capabilities that match exactly what our customers tell us they want.
The feedback we're getting in the market is the technology is good, it's been good, and they're super excited about the developments coming, but they want better service and want better resilience. The latter two are addressable, fixable, and we've done it. We've taken the steps to do that, and you and we gotta go through it. As you said, we've not been happy with the results in the banking business, and we projected, you know, as a result of some of the activities from the past that pain would continue. You know, we set it into the fourth quarter when we talked in October, and you saw the results then. It's a better business than our numbers are showing right now, and we're making all the investments.
Great sense of urgency, great sense of focus to get it where it is, but it isn't a core consolidation story.
Okay. When should investors be thinking that the banking sub-segment, right? 'Cause it sits under Financial Solutions. When do we get back to positive growth there?
Yeah. You know, we've been low single digits the wrong way. It should be low single digits the right way.
Yeah.
You know, I have the conversation all with investors. There's no magical demarcation line.
Okay
Like after six months of great service.
Right.
You know, so we're working through that with the customers. The anecdotal feedback we're getting is great progress. "Don't change what you're doing. Wanna see sustainability." As we continue to roll out, and we have some exciting project announcements, as we come through the first half of the year, more and more technology advances for our customers and more and more features for our customers.
Mm-hmm.
We believe that the shift is to that. At the most important time, the backdrop for bank spend on technology is as good as we've seen it in a long time, and that's driven by the fastest pace of change in bank technology we've seen in a really long time. We wanna make sure our customers don't make a service decision when they should be making a technology decision. We stand behind and believe we have great technology, so we're fixing the part we can fix and focused on bending that curve. There isn't some magical line you jump over.
Right. Okay. We'll continue to monitor that.
Yep.
Let's talk about the, you know, the perception of all this AI risk out there, right? For some of the software-centric FinTech, and obviously Fiserv's in that category. I mean, that's kinda your core competency, right? You build great software products for your clients. We'd love to get your perspective on kind of the moat there. Then, you know, on the flip side, I mean, talk about how Fiserv is actually embracing AI and where there are both revenue and cost opportunities.
Yeah
Potentially.
I'd push back on the first part. As we talked about earlier, we're a transaction and account-based company.
Yeah, you're not. Right. You're not.
Yeah.
Suite based, right? But the.
Right.
Yeah.
We get paid on transactions, payment volume-
Right
accounts on file, and we operate mission-critical core architecture. Underlying that architecture is millions if not billions of pieces of highly sensitive PII, proprietary data.
Right.
Deep regulatory requirements, accounting, you know, accounting standards. Lots of embedded relationships between us and our partners, and then highly interconnected networks. If you think about what we actually do, we settle transactions, authorize transactions, settle transactions, move funds.
Yep
create auditable reports and maintain billions of business and financial records. This is not on the surface a business that is logically susceptible to probabilistic model. You know, so-
Yeah. Exactly.
This has to be bank-grade high.
Gotta be perfect.
Yes.
Right. Yeah.
What does that mean for us? It means we think we have a huge opportunity and need to capitalize on it, and we're going after it to capitalize on AI to make all of those processes easier. We see ourselves much more as the last mile for AI to a really important and massive TAM for that industry, and that's the way we're thinking about it. How can we help our customers, either merchants or banks, benefit from all of the capabilities that will come in various agents? Say an agent wants to come to a bank and help them process data. You're just not gonna let them into the core.
Right.
let them into your payments network.
Yeah.
How can we sit as an orchestration layer in between that and be the last mile to the customer? We see that as a great opportunity to help our customers benefit from the incredible things in the world, but we gotta bring that to our customers, and it's gotta be digestible, manageable, and with a clear benefit and still bank-grade regulatory. I say bank-grade, whether it's merchants or banks.
Sure
as a term, bank-grade.
Yeah.
High quality protection. That's what we're doing. That is a commercial opportunity for us, we think, in addition to providing agentic commerce, letting Clover customers expose their goods into agentic showrooms and-
Right
... and the like. The other obvious commercial levers from the top line side is how do we more effectively get implementations done faster, reduce product development time.
Yep.
Reduce fraud. We have agents watching our data centers for susceptibility and
Mm-hmm.
Where there may be a weakness. It just makes every part of the business better and,
Right.
There's a big focus on it and a big opportunity. We're not doing it just because it's new. We're doing it 'cause it is actually really helpful.
You get results.
Yeah.
Yeah.
We're just scratching the surface of what we can now potentially do with all the data we have. It's hard to argue anyone has better data in the world than us between the merchants, and what can we do with that, and so we're exploring opportunities around that too. If you sit it out, it's gonna be a problem for any company in the world. We see it.
Yeah.
We see ourselves as a great enabler of the technology.
On agentic commerce specifically, everyone's talking about it, but it hasn't really taken off yet, right?
Sure.
At least in terms of its kind of more fulsome form, right? You know, yeah, we're using ChatGPT or other tools to do discovery, right? But to actually, you know, transact, we haven't really gotten there yet. I mean, you guys have laid the groundwork with a number of partnerships, I think Google, Visa, Mastercard. So I'm just curious, you know, what, when you talk to merchants, particularly enterprise merchants, I mean, what's their appetite to kind of participate in agentic commerce? Does it feel like they're kind of being dragged in or are they, you know, running in on their own?
Yeah.
Because it feels like it could be a mixed bag for them.
I mean, what's being done agentically in commerce?
Yeah.
Is amazing.
Yeah.
Today it's largely agentic shopping.
Yes.
Planning and the like, and then obviously at the end, the vast majority is still a just individual decision payment.
Right. On the merchant services, right. Yeah.
Just think about what technology's done to how you do it.
Yeah.
You know, I think our enterprise clients obviously wanna be in a position to support agentic commerce, and we're helping support them. I think the bigger opportunity is for the millions of small businesses we have. When you say, "I wanna buy a pair of cowboy boots," I don't know if you might be in the market, but you know, how does a small business
Yeah.
On Clover in whatever state, how do they, and they're selling boots, how do their boots get exposed on an adjacent shelf, you know, shop floor?
Exactly.
They're asking as much as anybody else is. I think what the end user, the consumer, or whatever, whoever is agentic shopping is gonna get a way better experience with way better pricing, instantaneous, seamless, benefit from massive thoughts instead of reading every review on a website of a shirt. You know, just think of what you can do in planning. It's amazing.
Yeah.
Obviously, there's a ton of embedded value for the consumer or the end user, and it's gonna thrive. If we are able to bring that all down to the actual payment experience and chargeback policies and all that.
Right.
There's work to do there, but it's no different than the experience we had when e-com emerged.
Yeah.
Right. We bridge these things.
Yeah.
We know how to do it, but you gotta build rules to work through, and a lot of people are working on that. It will be a thing.
Yep.
Today, it's not a big thing, but agentic is a super important part of the merchant world.
Right.
You know, the value that agents can bring to retailers. Small businesses now we're testing out, you know, agentic inventory management. You're out of X in a restaurant, let us go shop for you the best, fastest, quickest stuff to get here.
Nice. Yeah.
The value is immense of the agentic world to the retailers, and they wanna access it.
Mm.
understand it.
I wanted to switch over to Clover specifically for a minute. I would just like to get your latest view on Clover's competitive position really in the two main verticals, obviously continue to be restaurant and retail. I mean, I think some other players in the space have made some strides in terms of product and/or distribution. What are you seeing on the ground? You know, has there been any intensification of competitive intensity in pricing, win rate, anything like that that's been observable?
No major changes.
Okay.
It's always been a competitive space. We got great competitors. People come in, people come out, but there's a great base of competitors and we continue to gain share overall relative to FSBI or other small business metrics.
Mm-hmm.
As you say, we have very solid share in the two core verticals we've always operated in. We continue to look for growth opportunities by expanding to new verticals. Healthcare and professional services are the two that we talked about, and expanding some of our restaurant products further up market. Overall competitive story, not material change. We think there's great white space out there. I encourage you when you go to a restaurant or some other place, look at how people are actually
Yeah.
Managing tables, seating, billing, and stuff. There's still great opportunities out there. I think sometimes when we talk to investors, it's a belief that, it's only one in for one out. You know, any new win in Clover can only come from a competitor when there's all kinds of, opportunities still to go after to help.
Yeah.
What we hear from small businesses, which we're trying to go from POS to OS, and that's a really important distinction 'cause we hear from small businesses constantly, both through our bank partners and directly to us, is they're overlapped, right? They really have to do payroll, payment processing, accounting, employee management, tax.
It's a lot.
Right. They don't, they prefer not to have to. We're trying to create an intuitive, easy-to-use application through Clover with an anchor on payment processing and great builds to partners like ADP, Homebase, and others.
It becomes like a one-stop shop, basically, right?
Yeah. An operating system.
Yeah
versus a point-of-sale operating system.
Yeah. Right.
So-
Okay
... that's not perfect for everybody, as evidenced by the fact that we have $3.5 billion of Clover small business revenue and $4 billion of revenue that some people just wanna use a box to pay for payments and
Right
There's nothing wrong with that. It's just that we think over time, there's a great opportunity and a lot of white space for operating systems, and I think some of our competitors have shown that in very specific verticals that you can just run your businesses a lot better. Then what Agentic does on top of that just explodes the opportunity to help them run their businesses better. Even simple aids like, you know, can you tell me about February's results? You know.
Right
It can go through. That's our hope. We're pursuing growth in Clover through vertical expansion-
Yeah
Horizontal expansion, both of which we just talked to. International expansion, which is a lot, a ton of white space. A better user experience. We have an incredible user experience at the front end, and the front door of Clover is very strong. We would like a better experience, especially around the first 90 days or so where we're working on it. We have an entire team working on that, and that's part of the five pillars where we think we can deliver an even better experience around that front. You mentioned it, we continue to build out our distribution channels, which are diverse, incredibly broad-based, and have taken years upon years to build.
Mm-hmm
the embeddedness and the nature of it.
Can you just elaborate on that improving the experience in the first 90 days?
Yeah.
What was lacking? What's getting better?
It's around digital acquisition, digital setup.
Okay.
Self-starting, better from box-
The onboarding.
From box to first payment.
Okay.
First billing experience. It's like. It's a little bit like the conversation we were having earlier on the bank experience. It's, like, totally fixable stuff.
Yeah.
You just gotta do it.
Exactly
do it. We have a great team focused on that, and they're making terrific progress, and we're seeing some really very, very favorable results in some of the pilots we're doing around the experience side.
We have some medium-term targets for Clover, right? 10%-15% volume growth.
Mm-hmm.
15%-20% revenue growth.
Mm-hmm.
Just thinking about the volume piece, and again, you talked about these three vectors of verticals, horizontals, right?
Yep.
Geographies. Are each of those kind of starting to move the needle on the volume front this year? Are some of them a little further ahead than others?
Yeah. We haven't broken it down, you know.
Yeah
In any type of analytical sense. Just to go back to 10%-15%, where we say at 10%, which is sort of our core number.
Yep.
That doesn't have any success in terms of penetrating the $4 billion non-Clover SMB book. That's really where we've been running, if you take out the gateway conversion that we've overdiscussed, if you go back over time, it's
Yeah
You know, we've run at about 10%, and we think that's a sustainable level. If you get above that and you go to the up towards the upper end of 15%, that means that we've found real ways to penetrate and migrate in a way. We don't wanna migrate with customer attrition, we wanna migrate in a way. The only way you can do that is if you have a value-added solution for that non-Clover customer to bring them over. We're not gonna force that, as we've talked about. If you're very successful doing it gets Clover. In terms of overall Fiserv, 10%'s the number to look at, and then it would just be a move over.
Okay.
Back to that logical algorithms, we think there's five points of VAS and non-VAS related revenue that would-
Yeah
take the 10-15. Obviously, all those are sustainable. We're gonna have, as we talked about earlier, there'll be comparability issues in the first half of this year. We'll call-
Of course.
out, like we did in the fourth quarter, we called out with the specifics of that, and we'll call it out. As you get into next year, you see a more natural.
Right
Green algorithm.
You kinda lap everything.
Yeah.
How do you go about deciding, you know, which of the back book clients to?
Non-Clover SMB.
Yes.
Non-Clover SMB.
Yes. New nomenclature.
Yeah.
Non-Clover SMB.
Yeah.
How do you kinda go through that process to prioritize who to maybe push to move over to Clover?
Well, we're not pushing anybody.
Okay.
We're not in the consolidated forced conversion business.
Yeah.
... in any of our segments.
Right.
There has to be a value proposition. The clients who want a POS system, we're happy to service them. They're with us for a long time. They're great customers. It's a great business. You would never push them to do something extraordinary unless you had a value proposition for them to go over.
Right
You know, there's a variety of ways to do that. You can build more verticals that apply to the companies inside the $4 billion. You can develop a broader set of VAS to offer them for potential services. Two, you can think about your hardware strategy. Is it the cost of hardware that's holding them back? Is it how they process payments or is it an educational aspect that they could run their business more effectively?
Right
As we said, we're gonna be super careful and cautious because these are Fiserv customers who are happy.
Exactly
Paying us, and they're being satisfied as to their needs.
Yep.
If there's something more for them to do, and that would convert into more business with us, like any other cross-sell, you know, revenue yield opportunity, we'd take a very deliberate, thoughtful approach to do it. We are gonna be very, very methodical and smart and studied and tested as we do this.
Yeah. Yep, that makes sense. Yeah, you'll see. I mean, who can get the most bang for the buck from the operating system that Clover offers.
When we say One Fiserv, it's an action plan, but it's also a mental state of the company. This is whether it's non-Clover SMB or Clover SMB, it's SMB for Fiserv.
Exactly. I wanted to touch on VAS a minute. You mentioned it. 27% of revenue in Q4. We just love to think about, you know, what sort of headroom you see there over time. I think you've called out Clover Capital as being kind of under-penetrated.
Yep.
Maybe talk about strategies you're using to kinda bring that penetration up to rates that you think might be more commensurate with peers.
I think, as you go POS to OS, obviously VAS, the more services you can lay on to a VAS platform that help a small business, you know, run their business better, that's a good thing, and VAS can increase. We have talked specifically about Clover Capital, where we're less penetrated than our peers and
Yep
As part of the Clover growth efforts, Takis and his team are hiring greater expertise in that business, so that. You know, it's an advanced lending type capital business. It's how we deliver. You know, so it's a broader understanding of the business, a commitment to do what we're doing, thoughtful risk management policies around it, and then a really great delivery system on all of it. In each piece of that, we had room for improvement. We also dealt with some legacy stuff where, was this interfering with our bank partner's business or not? I think over time, that's become a much less of an issue because, I mean, I came from one of the bank partners.
Right.
Those aren't loans that we would do.
You're not lending $5,000 to a.
Right.
Yeah, yeah.
It makes the small business stickier, so the small business
For sure.
Becomes stickier to the bank partner and us, and we share revenues with our bank partners. It's a series of developments there and focus areas, but Takis and his team are all over it. You know, we wanna do it the right way, and-
Right
It'll build over time, and
Responsible lending
We think it's a great opportunity.
Yeah. Okay, good. I wanted to talk about the issuing business.
Mm-hmm
as well, just, you know, pipeline of new wins, pending implementations. How are you feeling about that? I mean, your biggest competitor now has a new parent, if you will. You know, any shifts in competitive dynamics you might anticipate in that corner of your business?
Yeah. Nothing major. I mean, as you know, the major customers, take the top 50 or so, it's a good split.
Yeah.
There's a couple in-house. It's a good split between us and our competitors.
Right
Our focus continues to be deliver a great experience. We have a significant investment going on, the Optima-
Oh, right. Optis
Optis transformation. We're excited about Vision Next, which is, think of it, as I said earlier, think of it as a FinTech for card issuers.
Yep.
A significant investment going on in the business, both U.S.-focused and outside the U.S. We continue to enhance and refine our VAS around net print, plastics, and the like, and to deliver a great solution to our clients. We've had some nice wins and nice renewals lately, and it's also an area where a lot of our embedded finance opportunities run through. That's where the DoorDash relationship goes through, and then the Dex relationship, which will launch later this year, will run through there, leveraging our prepaid card platform and the Payfare acquisition, the orchestration layer that we bought last year. We see a significant opportunity on the embedded finance piece, leveraging the issuing business.
Okay. I'll ask you about stablecoins. I think you've been running some pilots.
Yep.
How have those gone? Use cases that you've seen.
Yeah
Emerge, anything surprising on that front, or where are we?
No, I think our journey with stablecoins started with our bank customers as the GENIUS Act and now the CLARITY Act progresses through D.C.
Right.
After a period where this wasn't allowed in the banking sector, really any parts of it were allowed in the banking sector, our customers came to us and said, "How are we gonna be ready for this? How do we create a wallet?" What we announced last year with the creation of FIUSD and the wallet product is if you're on a Fiserv core, when the CLARITY Act passes, obviously we get all the final rules in place, that you'll have wallet capabilities in every DDA account. A customer of our banks or a member of our credit unions could carry money in fiat account, or they could carry money in their stablecoin account and obviously transact out of that. The next...
Obviously, the merchant side of the business expressed interest into that, and we spent a lot of time working with them and educating them as to the payment capabilities and around stablecoin. I thought it was a great transaction that Mastercard did yesterday, you know, where there is.
Yeah
Payment capabilities. We wanna be ready for that too. The next stage of our development, the next set of actions we did came out of the banks saying, "Well, what if deposits leave the system, and go into the stablecoin system?" That led us to the acquisition of StoneCastle. StoneCastle is two businesses, which is a deposit network and central omnibus account, sits on FinTech with thousands of banks on the other side of it, so you can take a large deposit, break it into FDIC 250 and under guaranteed deposits among our banking partners. Satisfies that.
Right.
It also came with a stablecoin custody license.
Mm-hmm.
Picture a customer of the bank, a customer of one of our customers wants to move some of their DDA to stablecoin. We mint the stablecoin for them at our custody business, and then we back it dollar for dollar. We then have to deposit those dollars somewhere. We can deposit back into the bank to create a closed loop of deposits for the bank. Now, it won't be in the same customer's account, but the balance of deposits at the bank.
Right.
A lot of specifics, but our journey has been driven by the interest of our customers, both merchants and banks, in making sure they understand the product or prepared to meet regulatory requirements. Then if there's threats to the business or risks to business, then we're helping them address those. If there are opportunities, which we see many, it's fast, it's borderless, it's cheap.
Right. Right.
The custody and record keeping is unbelievable around it. Once you get into a world, we start to do this. We think that stablecoin obviously makes a lot of sense in a lot of ways because it has a lot of good to it. Our goal is to make sure we're there to deliver it for our clients.
All right.
We think we have a great central role to play for that.
Last question. Any broad strokes on what we should expect at Investor Day? Maybe just share with us your general philosophy around, you know, providing medium-term financial targets.
Yeah, Investor Day, May 14th. First of all, we hope you'll come.
I'll be there.
We're excited to tell the story. I think no major, we're not setting the stage for some major change or something.
Sure
We laid out our findings in October. Obviously, it was a volatile period and a difficult period for lots of people. We said we knew when we laid all that out, there's a lot of news there for people to digest and people to understand the business. We set a target for the first half of the year to give a day where we could both expose our new leaders and help investors underwrite the same constant compounder thesis that we're underwriting and see the attributes of our business, the detail against that, and understand where we're placing our capital in terms of investments and where we're choosing not to. I didn't expect anybody to absorb everything we observed in October on October 29th, and this is a period for
A chance for us to spend some time and make sure you all understand all the great things we see about the business.
Great. Well, we'll look forward to that. Thank you so much for your time.
Yeah, thanks. Thanks for having me.
Really appreciate it, Mike. Okay. Thank you.