Raymond James flagged concerns that a potential deal to sell Fiserv’s debit card network to major banks would attract significant regulatory scrutiny.
- The analyst noted that a potential sale of Fiserv's STAR or Accel debit network to major banks such as JPMorgan, Bank of America, Wells Fargo, or PNC Financial could improve the banks’ debit economics.
- It would also be highly accretive to the fintech company’s earnings, the firm said.
- Meanwhile, Fiserv President Dhivya Suryadevara resigned effective July 7, citing "good reason" under her employment agreement.
Shares of Fiserv Inc. (FISV) attracted fresh retail attention amid reports of a sale of its debit network and interest from several top financial institutions. Retail chatter around the stock increased about 102% over 24 hours, according to data from Stocktwits.
Meanwhile, Raymond James flagged concerns that a potential deal to sell its debit card network to major banks would attract significant regulatory scrutiny.
Analyst Sees Upside – And Regulatory Risks
Raymond James noted that while a potential sale of Fiserv's STAR or Accel debit network to major banks such as JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), or PNC Financial (PNC) could improve their debit economics and also be highly accretive to the fintech company’s earnings, it would attract significant regulatory scrutiny.
Raymond James said the transaction's completion remains uncertain, according to TheFly, as regulators could view the arrangement as an attempt to circumvent the Durbin Amendment and enable higher fees for merchants.
The Durbin Amendment limits the fees banks can charge merchants for debit card transactions, with the aim of reducing payment processing costs for retailers while curbing fee revenue for large banks.
Raymond James maintained a ‘Market Perform’ rating on Fiserv. Meanwhile, Barclays initiated coverage of Fiserv with an ‘Equal Weight’ rating on Tuesday.
Leadership Transition Adds Another Catalyst
Meanwhile, Fiserv President Dhivya Suryadevara resigned effective July 7, citing "good reason" under her employment agreement, and will remain with the company in a non-executive role through July 31 to facilitate a transition, the company said in a filing.
FISV Stock: Retail Stance
On Stocktwits, retail sentiment around FISV stock was in the ‘neutral’ territory at the time of writing amid ‘high’ message volumes.
One user said, “$FISV now why would she resign hmmm maybe because they want to sell duh.”
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FISV stock has declined nearly 20% so far this year.
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