How Fiserv Makes its Money: Revenue Breakdown
A breakdown of Fiserv (FI) financials. See how Fiserv makes money from Merchant Solutions (Clover, Payments), Financial Solutions (Core Banking, Digital) using their 2024 annual report.
How Does Fiserv Make its Money?
Fiserv is a leading global financial technology company providing payment processing, financial services technology, and banking solutions. Following its 2019 merger with First Data, the company became one of the largest fintech providers in the world. Fiserv processes billions of transactions annually through its Clover point-of-sale platform, merchant acquiring services, and core banking technology. The company serves financial institutions, merchants, and businesses across more than 100 countries.
What makes Fiserv unique in the fintech landscape is its dual position straddling both sides of a financial transaction. The Merchant Solutions segment processes payments for businesses (the seller side), while Financial Solutions provides the core technology that banks use to run their operations (the issuer/bank side). This two-sided model gives Fiserv visibility into both ends of commerce and creates cross-selling opportunities that pure-play merchant acquirers or banking technology providers cannot match.
Fiserv (FI) Business Model
Fiserv Competitors
Fiserv’s key competitors and comparable public companies in the financial technology sector include Visa, Mastercard, Block (Square), and PayPal. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Fiserv stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Segment | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Merchant Solutions (Clover, Payments) | $10,200 | $9,300 | +9.7% |
| Financial Solutions (Core Banking, Digital) | $9,600 | $9,100 | +5.5% |
| Total Revenue | $19,800 | $18,400 | +7.6% |
Merchant Solutions (Clover, Payments) — 52% of Revenue
Merchant Solutions is the revenue engine Fiserv gained through its $22 billion acquisition of First Data in 2019. The segment provides payment acceptance and processing services to merchants of all sizes — from small restaurants using Clover POS terminals to large enterprise retailers processing millions of transactions daily. Revenue is primarily transaction-based: Fiserv earns a small fee on each credit card, debit card, and digital payment it processes.
Clover has become the centerpiece of Fiserv’s merchant strategy. The cloud-based POS platform combines hardware (terminals, kiosks, handheld devices) with software for inventory management, employee scheduling, loyalty programs, and analytics. Clover competes directly with Block’s Square and Toast in the small-to-medium business space, but Fiserv’s distribution advantage through its bank partnerships gives Clover access to merchant customers that purely digital competitors struggle to reach. Segment revenue grew 9.7% in 2024, driven by higher payment volumes, Clover adoption, and international expansion into Latin America and Europe through partnerships with financial institutions.
Financial Solutions (Core Banking, Digital) — 48% of Revenue
Financial Solutions provides the technology infrastructure that banks, credit unions, and other financial institutions use to operate. This includes core account processing systems (the central database that manages customer accounts, transactions, and balances), digital banking platforms (mobile apps and online banking portals), card issuing and processing, and risk management solutions. Fiserv is one of only three companies — alongside Jack Henry and FIS — that provide core banking technology to the majority of U.S. financial institutions.
The core banking business is extremely sticky: switching costs are enormous because migrating a bank’s core system is a multi-year, high-risk project that can cost tens of millions of dollars. This gives Fiserv long-term contract revenue and high retention rates (typically above 95%). Growth of 5.5% in 2024 was driven by digital banking platform upgrades, card processing volume increases, and cross-selling value-added services to existing bank clients. The segment is also benefiting from the modernization cycle as community banks and credit unions move from on-premise legacy systems to Fiserv’s cloud-hosted platforms.
Fiserv (FI) Income Statement
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $19,800 | $18,400 |
| Cost of Revenue | $8,600 | $8,200 |
| Gross Profit | $11,200 | $10,200 |
| Operating Expenses | $5,500 | $5,200 |
| Operating Income | $5,700 | $5,000 |
| Net Income | $3,700 | $3,100 |
All values in millions USD unless otherwise stated.
Financial data sourced from Fiserv SEC Filings.
Fiserv (FI) Key Financial Metrics
- Gross Margin: 56.6%
- Operating Margin: 28.8%
- Revenue Growth: 7.6%
Is Fiserv Profitable?
Yes, Fiserv is highly profitable with margins that have expanded steadily since the First Data merger. The 28.8% operating margin is a result of both the software-like economics of the Financial Solutions segment (high-margin recurring contracts) and ongoing synergy realization from the First Data integration. Net income grew 19% to $3.7 billion in 2024, well ahead of the 7.6% revenue growth, demonstrating the operating leverage in Fiserv’s model. The 56.6% gross margin reflects the mix between higher-margin financial technology licensing and lower-margin but faster-growing merchant payment processing. Fiserv also generates strong free cash flow, which it has used aggressively for share buybacks — reducing the share count by roughly 3-4% annually.
Fiserv (FI): What to Watch
- Clover platform growth vs. Square and Toast — The SMB payments space is intensely competitive. Clover’s distribution through bank partnerships is a differentiator, but Block and Toast are investing heavily in software features and vertical-specific solutions. Clover’s ability to grow its annualized payment volume and average revenue per merchant will be critical.
- Core banking modernization cycle — The move from on-premise to cloud-hosted core banking is a multi-decade upgrade cycle. Fiserv’s ability to migrate existing clients and win new ones against FIS and Jack Henry will determine the Financial Solutions growth trajectory.
- International merchant expansion — Fiserv has been expanding its merchant acquiring business in Latin America, Europe, and Asia through banking partnerships. International markets represent a massive growth opportunity but also bring currency risk and regulatory complexity.
- Embedded finance and BaaS — Banking-as-a-Service and embedded finance (enabling non-banks to offer financial products) is an emerging opportunity. Fiserv’s dual-sided model positions it well to power these capabilities, but competition from newer fintech infrastructure providers is increasing.
- Margin expansion sustainability — Fiserv has been expanding operating margins for years through First Data synergies and operating discipline. As synergy realization plateaus, the company will need organic revenue growth and mix shift toward higher-margin products to maintain margin expansion.
Fiserv (FI) Financial Summary
Fiserv’s dual-sided fintech model — powering payment acceptance through Clover and merchant services while simultaneously running core banking technology for thousands of financial institutions — makes it one of the most entrenched players in financial infrastructure. Revenue grew 7.6% to $19.8 billion in 2024, while net income surged 19% to $3.7 billion as First Data merger synergies and operating leverage drove the operating margin to 28.8%. The Financial Solutions segment provides sticky, recurring revenue from long-term bank contracts, while Merchant Solutions delivers faster growth through Clover adoption and rising payment volumes. With strong free cash flow funding aggressive buybacks, Fiserv continues to compound earnings per share at a double-digit rate.
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