Dive Brief:

• Payment processing giant Fiserv saw revenue decline in its financial solutions and banking segments, according to a Tuesday earnings report and comments from the company's CEO.
• Fiserv executives attributed the slide to headwinds the company is facing in those two spaces, specifically to a loss of business from small financial institutions.
• “We have lost some market share, especially on the smaller credit union side of our business,” Fiserv Chief Executive Mike Lyons said Tuesday in response to a question from an analyst on an earnings call.

Dive Insight:

Revenue from banking services fell 4% year-over-year in the quarter while revenue from financial solutions fell 2%.

The payment processor is modernizing its banking services, specifically by moving to a “cloud-based, real-time, secure API," Lyons said. 

He suggested that some clients were unhappy with the company's previous approach to converting to its new services, although he provided few specifics.

Lyons stressed that the payment processor is not compelling anyone to use its updated services.

"We were explicitly clear that there are no forced conversions as part of this modernization," he said. "If a client wants to make a change it's totally on their timeline."

At least two lawsuits have accused the payment processor of forcing merchant customers to move to its Clover point of sale system. The company has denied those allegations.

To grow its financial solutions business — which includes a range of financial products for banks and merchants — Fiserv is "making targeted investments to better align with client needs," Lyon said in response to an analyst question during the earnings call, although he did not elaborate. 

Spokespeople for Fiserv did not immediately respond to a request for more details.

The company has struggled over the past year as its revenue and net income have fallen short of Wall Street’s expectations. The company replaced its CFO late last year and in October Lyons promised a “a critical and necessary reset.”

The payment processor reported $813 million in net income for the quarter, a 14% drop from the $948 million it reported the same period of 2024. 

For the full year, the company reported $3.49 billion in net income, a 9% increase from $3.18 billion in 2024.

Fiserv’s revenue was effectively flat for the quarter. The company recorded $5.28 billion in revenue for the three months that ended on Dec. 31, compared to $5.25 billion in the year ago quarter. Fiserv reported $21.2 billion in total revenue for the full year, a 3.6% increase from 2024.