Fiserv buys U.K.'s Dovetail as it waits on Monitise

Fiserv's acquisition of the U.K.-based real-time payments provider Dovetail Group Ltd. is a move made with a global vision in mind.

Fiserv did not disclose details of the Dovetail acquisition, but it comes at a time when the Brookfield, Wis., company is also bidding to acquire the U.K. mobile banking vendor Monitise (its current offer of 75 million pounds, or $96.2 million, is up from the 70 million Fiserv offered two months ago). Dovetail provides a real-time payments platform in addition to its liquidity management software, all designed to help banks receive and deliver digital payments through a local or cloud-based network.

The move to obtain Dovetail and Monitise positions Fiserv, which has concentrated mostly on North America, to build its international footprint, said Peter J. Heckmann, senior research analyst of the technology group at D.A. Davidson & Co.

Jacob Kepler/Bloomberg

"Both of these deals are reflections of the fact that there is still growth in electronic payments, while the growth outlook is much more modest in the mature core processing software operations," Heckmann said.

Fiserv's primary payment assets have been bill-pay and debit processing, with a recent eye to fast-growing niches, Heckmann added. Dovetail competes with ACI Worldwide and FIS Global's Clear2Pay as far as options for payment hubs, and has also been involved in the U.K.'s successful faster payments initiative.

With Dovetail technology and its direct gateway to the bank-backed Zelle person-to-person payment network as well as The Clearing House real-time payments scheme and faster ACH delivery, Fiserv can also strengthen its presence in the U.S.

In Europe, the technology helps Fiserv support the U.K. Faster Payments program, the European Union's SEPA instant credit transfer scheme and the Paris-based Euro Banking Association Clearing House architecture.

Mostly, Fiserv aims to provide data-driven payment processing that has the flexibility to integrate new payment types and technology in a way that keeps pace with those advancements.

"As payments transform at the speed of life, we expect to enable financial institutions to influence and direct a larger share of the payment value chain," Jeffery Yabuki, president and CEO of Fiserv, said in an Aug. 21 press release.

Dovetail's strong technology and Fiserv's reputation as a market-leading financial services technology provider creates "a powerful combination" for Fiserv to deliver different value-adds to financial institutions and their customers, Yabuki added.

Fiserv's activities with Early Warning the past two years have put the vendor's technology under the hood of various faster payments or security projects, particularly on the real-time person-to-person payments landscape.