Fidelity National Information Services CEO Stephanie Ferris didn’t mince words last week when an analyst asked her about competition from Visa’s Pismo business.

The analyst noted how Pismo, which provides digital payments and banking technology services, had won business from Wells Fargo, an FIS bank client, and asked about the impact.

“Absolutely no impact,” Ferris said in response during FIS’s first-quarter earnings webcast on Friday. 

That was partly because FIS doesn’t provide extensive services to Wells Fargo. While FIS provides some commercial credit card processing services to the bank, it doesn’t provide the bank with its core banking technology services or consumer credit card processing, she said. 

Still, in her lengthy commentary on the competitive dynamic, she said she was glad that the subject of the Pismo situation had surfaced, given a “swirl” of industry chatter about it. 

“In terms of core banking, I don't see them materially moving anything in the market,” Ferris said of Pismo, contending that it isn’t a core provider, but rather offers “a ledgering capability.” For large banks, “if they do core modernization, they are looking for ledgering, but we don't think it significantly changes the overall core market. It isn’t a full end-to-end core” technology provider.

Visa touts Pismo prospects

Comments from Visa CEO Ryan McInerney last month contrasted somewhat with those from Ferris. He had discussed the Pismo Wells Fargo win as part of the card network’s fiscal second-quarter earnings report, saying Pismo was likely to be part of that bank’s “core banking modernization over the coming years.” 

Visa acquired the Brazilian Pismo business in 2023 and has been touting it as a game-changer for selling next generation card and bank technology all over the world. The Sao Paulo-based, cloud-native company has built a business offering digital card-issuing and banking services to bank and fintech clients in Latin America, and is expanding in the U.S., Europe and Asia.

Ferris discounted the threat to FIS, noting that it’s now the largest credit card processor in the U.S., with about a third of its issuing clients having renewed their contracts through 2029. FIS’s position in the market was super-sized this year with its completion of the $13.5 billion acquisition of “the world’s largest issuing business,” formerly known as TSYS, from Global Payments, per its January press release.

“Even [with] anything happening with Pismo in the credit world, we feel really good about our competitive positioning,” Ferris continued. “So, [we] are hopeful that some of this underlying concern around Pismo starts to die away now.”

The Jacksonville, Florida-based company reported first-quarter gross profit rose 26% to $1.11 billion as revenue climbed 30% to $3.3 billion, with a boost from a recent acquisition.

FIS partners with Anthropic

On the FIS earnings webcast, Ferris pointed to a new partnership with artificial intelligence company Anthropic as buttressing the FIS’s position in the market. The company aims to develop an AI agent with Anthropic that bank clients can use to investigate and fight financial crime.

When Ferris was asked by another analyst about market competition generally, she acknowledged it continues to be competitive, with three major players and other competitors vying for business. 

Still, she noted that it’s difficult for banks to switch from one core provider to another, partly because of the regulatory environment that overlays the effort. “Core is pretty sticky – it's painful to change your core,” she told analysts.

But could AI reduce that “stickiness” another analyst asked her – in other words, would it be possible for artificial intelligence to make the task of switching between core technology providers easier or faster, perhaps with less risk than previously?

Ferris acknowledged that FIS is indeed using AI for that very task when it’s switching new clients over to its core services. She agreed AI may make the change a faster one, though not necessarily a less costly move, in terms of effort or expense.

“I don't see a full takedown though, like, AI has come and all of a sudden the cost is gone,” she said. And she added that a fully AI operated core also isn’t on the horizon in her view, remarking that she hasn’t “yet seen an actual AI-enabled full core that a bank could use.”

AI-enabled core services?

Anthropic could also be seen as a competitive threat. Analysts at Baird Equity Research said FIS executives seem to believe “their position as system of record will keep Anthropic from being able to take away their relationships,” but there is “skepticism” from investors about that, the analysts told their clients in a Friday note. 

Also on the AI front, FIS’s rival Pismo, with the backing of its new deep-pocketed owner Visa, is working on integrating AI into its core services.

In December, Pismo announced a new partner collaboration in Vietnam to use AI in offering card services this year. “The integration of Pismo’s technology with Visa’s global infrastructure is accelerating the modernization of core banking and payment capabilities,” the companies said in a press release. 

AI appears poised to keep spooling up the card and core provider competition.