Fiserv and CashEdge Prepare to Step into the Ring

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30 June 2011
Jacob Jegher
It's been a really busy week on the M&A front - S1/Fundtech, Intuit/Mobile Money Ventures, and now Fiserv/Cashedge. Yesterday, Fiserv announced that it has agreed to acquire CashEdge. It's a strategic move on the part of Fiserv and I can think of numerous reasons for the acquisition. Let's explore a few of the areas:
  • P2P Payments. Fiserv has a ZashPay, CashEdge has Popmoney. Why does Fiserv need two separate solutions? Well, there is lots of activity taking place in the online banking space with regards to P2P. The recent announcement of ClearXchange (a joint venture of Bank of America, Wells Fargo, and JPMorgan Chase) has raised a lot of eyebrows and everyone is wondering whether this is the P2P payments silver bullet. Can a joint ZashPay/Popmoney solution take on the likes of ClearXchange? Should it take on ClearXChange or attempt to be part of it? This is still a murky area as there are lots of unknowns, but I would love to hear your thoughts.
  • Account Aggregation, Online Banking, PFM. There are 3 main account aggregation players - Yodlee, Intuit, and CashEdge. Fiserv's acquisition of CashEdge now allows them to offer account aggregation and tie it into their Voyager online banking solutions. No doubt this is also a major stab at rival Intuit and their online banking and account aggregation endeavours. CashEdge is also an Intuit partner, and this now opens up doors for Fiserv to step in and attempt to woo Intuit online banking customers. It's also a stab at Jack Henry, as CashEdge is the aggregation provider for their PFM solution. It could also be a stab at firms like ClairMail, another CashEdge partner. Will Fiserv box out Intuit, Jack Henry, and ClairMail customers with this acquisition? Things could get mighty sticky as competition is clearly heating up.
  • Small Business Payments. This is a fast growing area, and one that is changing rapidly as banks and vendors attempt to simplify the online banking money movement process. Every online banking provider needs to work on this area. For more info, see my small business online banking vendor evaluation report.

This is clearly a strategic and competitive move on Fiserv's part. I believe it holds a lot of potential, it will all come down to execution and how the joint entity will work with its banking clients and prospects. I'd love to hear your thoughts.


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