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eCommerce Drives FIS Merchant Volumes Above 2019 Levels

Technology solutions provider FIS reported earnings that showed transactions and global volumes (as measured in total dollar value of those transactions processed) growing above pre-pandemic levels.

On a segment-by-segment basis, merchant solutions revenues were up 14% year over year to $1.16 billion. Revenues from banking solutions gained 8% to $1.61 billion, and capital market solutions top line gained 10% to $654 million.

In a bit more granular detail, the company noted that during the quarter, global volume increased 17% to $530 billion, and transactions increased 11% to 12 billion. Global volumes gained 23%.

Looking at Pre-Pandemic Levels 

As compared to the third quarter of 2019 — and thus, pre-pandemic levels — global volume grew 23% and transactions grew 13%. Volume growth in excess of transaction growth reflects an increase in the average dollar value of each transaction (or increased average ticket) during the period, as noted in the company’s earnings release.

During the conference call with analysts, CEO Gary Norcross said the company is focusing on “the intersection of software payments and embedded finance,” and noted that key trends include “the electronification of banking, enabling electronic transactions online at the point of sale, and  automating treasury and B2B.” He pointed specifically to wins tied to its banking platform, where, for instance, PayPal is using the platform to enable its recently-announced high-yield savings account.

“These new wins continue to demonstrate the versatility of our new cloud native software,” said Norcross.

The company spotlighted in its supplemental materials that the merchant business is responsible for 32% of its consolidated revenues, and double-digit percentage growth in that business bolstered results. Merchant pro-forma revenue growth versus the third quarter of 2019 stood at 16%, according to the company, and were up 9% sequentially.

With a nod to eCommerce, the company said its eCommerce revenues compared with pre-pandemic levels in the third quarter of 2019 were up 22% including travel and airlines; stripping those verticals from the mix accelerates the overall percentage gains to 34%. Management noted on the call that the travel sector is improving and should continue to improve into 2022. At present, per commentary, FIS’s travel sector related business stands at about 65% to 70% of 2019 levels.

Looking ahead, CFO James “Woody” Woodall noted that small to medium-sized businesses (SMBs), currently just a “sliver” of the top line, represent “a strategic opportunity” for FIS.

Woodall added, “We have experienced a significant recovery in each quarter of this year with most of our verticals growing” by at least 20%.

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