First Data has duly focused on an extensive partnership that plays a critical role in enhancing its growth trajectory. In the year 2018, the company partnered with Retention to integrate both mobile SDK and Bolt Technology that further gave the company an added advantage. Prospects of partnership deals with Desert Micro provides the company with an opportunity to integrate Desert Micro solutions with its SDK offering (Equity, 2018). Partnerships with banks such as RBL in India paves way for the firm to leverage Vision Plus a well-known initiative that offers credit cards across India. In the year 2019, the company intends to partner with SBI card that will sort to leverage Vision plus with India's first card credit issuance. All these partnerships are strategic advances that seek to capitalize on opportunities that further enhances the company success. Arriving at a partnership deal with Alibaba, the company intends to use a platform known as Alipay as its point of sale. The partnership deal will allow more than 35000 merchants to use Alipay that contributes to the company global business prospects.
Merging and Acquisition Opportunities
First Data Company recently has made strategic partnerships that give the firm an upper hand in dominating the market. The ability to have firms with the same business goals and objectives towards growth makes it easier for the company to establish partnership deals that further present an opportunity to gain market dominance. The company has recently acquired Card Connect, Blue Pay and Acculynk that adds to the company portfolio and aids in spearheading its operations and profitability (Equity, 2018). Blue Pay, for instance, presents the company with the opportunity to grow in the market through integrated payments. The company further expects Acculynk to expand its vast payment portfolio. Card Connect being the company long time distributor in processing Data peer payments, the firm seeks to use that mutual relationship in boosting its financial technology abilities. Moreover, the partnership with Card Connect to add an invoice to card processing enables the firm to effectively manage funds and other services to clients in the ERP space. The opportunities to expand via acquisitions and buyouts enables the company to globalize its offerings and reach out to diverse markets establish strategic partnerships and boost its operations.
Consumer Behavior in Preferring to Pay Bills Online
Over the years consumer patterns and behavior have recently changed most of them prefer to make most payments through digital means. Contrary to the old days when it was only a matter of writing a cheque or simply handing cash over the counter, consumers nowadays use multiple payment channels to settle their bills. The growth in the shift of payment patterns by consumers presents the company with the opportunity to capitalize on digital payment trends as it gains more familiarity in the market place. As a result, the company has already made major steps in maximizing on the opportunity by injecting the colossal sum of capital in the online platform. The investment has opened an opportunity for First Data to set up a sales channel which the company may use as a strategic advantage to know its customers and make better services. A report by Satista estimates that the annual amount accounted for digital payments in the US in the year 2016 is $645 billion (Equity, 2018). As the United States provides a lucrative market for growth in digital payments due to advancement in technology and innovation, First Data Company has a chance to capitalize on the opportunity as the market growth rate is estimated to be over 13% over the next five years.
New Technologies through Strategic Partnership
With the strategic partnership of Fiserv and First Data, the management of the two companies seeks to redefine the mode in which consumers and institutions move money that will further enhance more convenience. Through transformative combination, Fiserv and First Data intend to connect money management and respective merchants that will provide a platform of Data Clover for startups and SMEs. A digital merchant account in First Data can be integrated into Fiserv banking options that serve many financial institutions. Such strategic partnership gives access to financial help that further aids in the growth of the company. Payments are more enhanced as they give consumers additional billing options that make it more convenient for users (FirstData, 2019). The partnership provides a new technological opportunity to have highly effective distribution and product channels. Fiserv for instance through the deal intends to offer a financial solution to financial institutions through the First Data's Clover Platform. Fiserv and First Data partnership thus is a lucrative business opportunity for the growth of the two firms.
Cyber Security Attacks
The First Data breach hit in early 2019 in Australia with the number of civil servants inconvenienced estimated to be 30000 (Busolleti, 2019). The incidence followed after an unknown third party downloaded a directory that contained confidential information of the civil servants. The overall intention of the hacker was to gain access to a government employee in Victoria State Australia. A breach in First Data only exhibits how the company systems are inefficient and can be easily compromised. It is a threat to the company as the breach illustrated failure to protect users' confidential information, which at a time the breach may lead to loss of funds.
Entry of New Firms in the Industry
With Fiserv strategic partnership with First Data, the company seeks to enter a consolidation that puts them in a better strategic advantage. Even so, Fintechs companies like Stripe are giving long-established firms sleepless nights as they have to keep pace with the new competition. Fiserv and First Data are considered to spend billions in order to keep pace with the competition. New rivals have grown very quickly with firms such as Square achieving a $25 evaluation gap (Adams, 2019). Other new rivals such as Adyen and Plaid have also entered the market proving to be enough threat for First Hand.
First Data Take Over
As initially the agreement was meant to be a partnership, First Data possess a chance of losing ownership of the company if management of the company agrees to sell the firm for $22 billion in stock. The $22 billion represents a 30% premium of First Data (Fool, 2019). Even though shareholders of the company view it as a big sale of their company, that only means loss of ownership and existence of the company.
Adams, J. (2019, January 16). Fiserv, First Data and the staggering fintech threat. Retrieved January 12, 2019, from Payments Source: https://www.paymentssource.com/news/fiserv-first-data-and-the-staggering-fintech-threat
Busolleti, F. (2019, January 3). Cyber Security, Australia suffered the first data breach of 2019. Retrieved February 12, 2019, from Difesa & Sicureza: https://www.difesaesicurezza.com/en/cyber-en/cyber-security-australia-suffered-the-first-data-breach-of-2019/
Equity, Z. (2018, August 8). First Data (FDC) Gains From Buyouts, Integration Risks Remain. Retrieved February 12, 2019, from Nasdaq: https://www.nasdaq.com/article/first-data-fdc-gains-from-buyouts-integration-risks-remain-cm1005169
FirstData. (2019, January 16). Fiserv to Combine with First Data Corporation to Create Global Leader in Payments and FinTech. Retrieved February 12, 2019, from https://investor.firstdata.com/financial-news/2019/01-16-2019-120649159
Fool, M. (2019, Jan 21). The Rewards and Risks in Fiserv's Purchase of First Data. Retrieved February 12, 2019, from The Motley Fool: https://www.fool.com/investing/2019/01/21/the-rewards-and-risks-in-fiservs-purchase-of-first.aspx
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