Walmart, Digital Technology Factor Into FIS Q3 Earnings

The digital-first economy and the Worldpay acquisition both played key roles in payment processor FIS’ earnings on Thursday (Oct. 29), as the company used its announcement to spotlight a new eCommerce win at Walmart.

By the numbers, revenue increased 13 percent to $3.19 billion, primarily due to the July 2019 acquisition of Worldpay. Net earnings were $20 million. Outside of the Worldpay acquisition, revenue increased 1 percent compared to 2019’s Q3. According to FIS, the minimal increase was due to consumer spending trends associated with the pandemic.

“COVID-19 has greatly influenced how businesses must interact with their customers in order to survive and thrive,” said Gary Norcross, FIS chairman, president and chief executive officer. “We are pleased that our unique business model enables us to quickly deliver solutions that are helping our clients adapt to these rapidly shifting market dynamics. Our strong third-quarter results demonstrate the momentum we’re building to continue accelerating revenue growth.”

On the merchant solutions side of the FIS house, revenue increased 44 percent to $1.01 billion, primarily due to the Worldpay acquisition. On the banking side, Q3 revenue increased 4 percent to $1.5 billion. Norcross told the earnings call that technology and digital-first solutions were a key to Q3 and will be important in Q4.

“We rearchitected our application stack to be modular and componentized while grading and integrating our enterprise toolsets,” he said. “And we launched a dramatically more client-friendly approach to delivery and service. Now we are leveraging our technology and expertise with flexible point solutions using cloud-native open architecture to deliver digital omnichannel solutions that are simple and easy to navigate. We are helping our clients to quickly adapt to rapidly changing consumer expectations with innovative solutions that are fast, flexible and frictionless.”

Some of the company’s wins for the quarter remained anonymous. FIS signed a top 100 luxury retailer that chose the company based on debit value proposition, eCommerce and differentiated digital technology. Norcross also said FIS recently began processing eCommerce transactions at Walmart, further expanding an existing relationship.

“Honestly, just positioning mobile eCommerce puts us at a very competitive advantage…” Norcross told the earnings call. “We continue to win share with that technology, and now we’re bringing on some Walmart volume and so we’ve really appreciated that space. We continue to be the leader in global eCommerce, and we continue to feel very bullish on where we are going with our sales.”

eCommerce transactions increased 30 percent in the quarter for FIS, excluding travel and airlines. “We believe this was a critical time to continue to invest in our solution suite, to empower our merchants into an accelerating digital economy. We have rolled out significant enhancements within our merchant segment, all of which continue to position FIS as the premier provider of global eCommerce and integrated payments,” Norcross said.

Walgreens has also been a substantial win for FIS. Last week, FIS announced the addition of Walgreens to its group of retailers using Premium Payback, the company’s real-time rewards redemption network. Walgreens’ payment cards customers will now be able to tap into their credit card rewards points in real time to pay for in-store purchases. PayPal, Shell and BP are already part of the FIS Premium Payback ecosystem.

“Research shows that the ability to use card loyalty points to make purchases is becoming an increasingly important factor in consumer decisions on where to shop,” said Bruce Lowthers, president of banking and merchant solutions at FIS. “By integrating FIS Premium Payback into its in-store payments network, Walgreens is taking a bold step to bring new levels of savings and value to its customers and drive return shopping.”