First Data, and later Fiserv, provided processing technology under the joint venture — which operated under the title Wells Fargo Merchant Services — while Wells Fargo offered merchant leads and sales support. The two companies extended their pact in 2018 to an expiration at the end of this year.

Fiserv owned 40% of the joint venture, while Wells Fargo owned 60%, Fiserv’s SEC filing said.

The venture had a net income of more than $409 million in 2018, according to a Fiserv audit.

The Wells Fargo spokesperson declined to comment beyond a brief statement acknowledging the end of the joint venture.

“Upon expiration, the Company expects to receive a cash payment or assets equal to the value of its share of the joint venture, as determined in accordance with an agreed upon contractual valuation and separation process,” the filing said.

Both companies also declined to answer questions about the value of the multi-year agreement.

Fiserv does not expect the impairment charge to impact its performance outlook for “organic revenue growth” of between 9% and 12% annually in 2025 or 2026, the filing says.

Fiserv is likely losing money on the joint venture, Baird Equity Research analyst David Koning wrote in a note to investor clients Wednesday. 

He noted when Fiserv ended its joint venture with Bank of America in 2019, the processor said it had “a positive impact, as they still provide a lot of services to BofA.

By Patrick Cooley on Sep 27, 2024
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