Fiserv, FIS pressured to sell parts of businesses

• Key insight: Fiserv and FIS are considering selling parts of their businesses. 
• What's at stake: Traditional bank technology sellers face pressure from fintechs such as PayPal, Block and Stripe. 
• Forward look: Fiserv may sell its debit routing business; while FIS may sell its capital markets business.

The large bank technology vendors FIS and Fiserv are no stranger to large M&A deals as they have spent most of the past decade looking for the right combination of products for a rapidly changing financial industry.  

It's a trend that looks to continue as both firms may soon be selling parts of their businesses. 

Fiserv's recent earnings continued its struggle from earlier quarters and was also accompanied by a push from activist investor Jana Partners, which has called for comprehensive review and potential sale of Fiserv's assets. That stacks on top of a potential sale of Fiserv's debit business to a bank-led consortium and comes as FIS says it's shopping parts of its capital markets business.

"After years of Fiserv and FIS competing to get bigger, the disadvantages of that strategy have become apparent," Aaron McPherson, principal at AFM Fintech, told American Banker, adding the companies are now impossible to run effectively because they have too many divisions competing for management's attention. "Hence the push by Jana and others to spin off segments, based on the theory that these segments could be better managed and achieve a higher valuation than if they remained in the larger company."

What Jana wants

Fiserv is reportedly shopping its Star debit routing network, and is in the midst of a recovery strategy to assuage nervous investors. 

"Fiserv is feeling the heat," Eric Grover, principal at Intrepid Ventures, told American Banker. 

"Retail banking titans like BofA, Chase, and Wells Fargo could do more with Star and Accel. If Chase owned Star, Chase Star transactions would be exempt from the Durbin Amendment's debit interchange price cap and mandate that merchants have a routing choice between two unaffiliated networks. Chase would be able to increase its debit interchange revenue by billions of dollars."

Jana and Fiserv did not return requests for comment, though Jana's letter suggested there are more parts of Fiserv's business that could be attractive in the open market, and pushed for a publicly announced review of all of Fiserv's products. Fiserv in recent years has reported growth in Clover, the point of sale system Fiserv acquired from First Data that enables Fiserv to compete with Block and PayPal. 

"There is significant untapped value embedded in its portfolio of assets, many of which would command a value well in excess of where Fiserv trades in the public market," Jana said in its letter. Jana also called out executive churn at Fiserv.

Former President and Head of Financial Solutions Dhivya Suryadevara resigned last month, and Takis Georgakopoulos became CEO on June 15 as Mike Lyons left the company to become the CEO of Truist Bank. Lyons became CEO of Fiserv in January 2025 from PNC after former Fiserv CEO Frank Bisignano left the company to run the Social Security Administration, and later the Internal Revenue Service.

"While we remain supportive of Fiserv's turnaround plan, management turnover and continued missteps have widened Fiserv's discount to its intrinsic value. We believe divestitures would significantly reduce that discount while at the same time help restore credibility with investors. Given Fiserv's large and diverse collection of assets, we are convinced that a comprehensive review, rather than a piecemeal, asset-by-asset approach, is the best way to unlock value. "The potential sale of all or parts of Fiserv's debit business may create problems for other parts of Fiserv's business, according to analysts. 

"We are also wary of a potential debit network sale to a group of large banks as we believe it could alienate Fiserv's community bank customers," William Blair analysts said. 

Is FIS pruning?

FIS has spent the past two years refocusing on bank technology, a process that includes deemphasizing certain products, to ward off the threat from fintech. It has also invested in agentic AI. 

The strategy may also soon include at least a partial exit from capital markets. During FIS' second-quarter earnings call, CEO Stephanie Ferris said interest rate pressures weighed on lending volumes, which is pressuring the outlook for FIS' capital markets division. "We entered the year leaning in hard to accelerate our sales momentum and the conversion of our existing backlog, as well as an expectation for organic growth to recover in our lending business from the volatility we saw in 2025," Ferris said during FIS' earnings call. "Unfortunately, these expectations did not materialize."

Ferris said FIS is evaluating strategic alternatives relating to select products that it's managing within the capital markets unit that may not fit the strategic profile of our overall business.

Beyond capital markets, FIS' financial position is relatively strong. It reported net earnings of $231 million for the second quarter, compared to a loss of $470 million for the period last year. Second-quarter revenue was $3.4 billion, up 29% from the prior year. FIS' banking services unit reported revenue of $2.5 billion, up 44% from the prior year, compared to capital markets, where revenue rose 3.5% to $810 million. FIS has been involved in several large recent deals. Earlier this year, Global Payments completed its $24.3 billion acquisition of payment processor Worldpay from FIS and GTCR, FIS' private-equity owner. At the same time, Global Payments closed the $13.5 billion sale of its card issuer technology to FIS and GTCR.

"In addition to the complexity of the financials, competitive concerns about software/GenAI and slowing organic growth in the capital markets business have pressured shares," William Blair analysts said in a note on FIS, though it did note established bank technology sellers have strength in the AI race as distribution partners. "For example, FIS will serve as the infrastructure layer for the Financial Crimes AI Agent initiative with Anthropic/Claude," William Blair analysts said. This initiative is targeting the AML market, which costs institutions an estimated $35 billion to $40 billion annually.

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FIS and Worldpay's most recent deals grew out of a series of M&A activity seven years ago that involved legacy companies designed to broaden scale across payment processing and card issuing as technology-focused rivals such as PayPal, Square and Stripe gained ground and began targeting larger merchants.

The payments M&A wave in 2019 totaled more than $100 billion and included Fiserv's acquisition of First Data, FIS' purchase of WorldPay and Global Payments' merger with TSYS. Within four years, the initial FIS/Worldpay combination started to fray. FIS in 2023 announced plans to spin off Worldpay as part of a strategy to enable Worldpay to make acquisitions in a depressed environment for fintechs. That plan changed five months later, when FIS decided to sell a majority stake in Worldpay to GTCR. 

"Digital technology has been a challenge for these companies, mainly because they need to maintain a large installed customer base on older technology, but that problem isn't as easily remedied," McPherson said.