First Data Corporation is a global payment technology solutions company. The company was founded in 1971 and is headquartered in Atlanta, Georgia. First Data operates in the financial services industry, providing payment processing services and solutions.
Some key facts about First Data:
- Founded in 1971 in Atlanta, Georgia
- Public company traded on NYSE with ticker FDC (prior to acquisition)
- Global payment technology and services provider
- Powers trillions in payment transactions annually
- Serves over 6 million merchant locations and 4,000 financial institutions
- Operates in over 100 countries
- Employs over 20,000 people worldwide
First Data is a major player in the payment processing industry, working with both merchants and financial institutions to enable electronic payments globally. Their technology facilitates commerce between businesses, merchants, and cardholders by processing and securing payment transactions.
Products and Services
First Data provides a range of payment and technology solutions for merchants, financial institutions, and card issuers. The company’s core services include payment processing, merchant acquiring, and credit card processing.
For merchants, First Data offers point-of-sale solutions, payment gateways, ecommerce solutions, gift card programs, and various analytics tools to gain insights into customer transactions and shopping patterns. Major merchant services include Clover point-of-sale systems, FirstData TeleCheck check verification and guarantee services, and fraud prevention tools.
For financial institutions and banks, First Data provides card issuer processing, network solutions, prepaid card services, private label card programs, and data analytics. This includes processing credit, debit, ATM, and prepaid card transactions.
First Data also develops credit scoring models and offers credit solutions to help businesses manage risk. Their underwriting systems leverage data analytics and machine learning for automated decision-making.
Market Position
First Data is one of the largest payment processing companies in the world. According to CB Insights, First Data holds the leading market position in merchant acquiring and payment processing, with an estimated 25-30% market share in the United States. The company processes over $2 trillion in card transactions annually for 6 million merchant locations and thousands of card issuers in over 100 countries (CB Insights).
Some of First Data’s major competitors in the payment processing space include Fiserv, Global Payments, FIS, and Elavon. However, First Data maintains a significant lead over its next closest competitor, Global Payments, which has an estimated 10-15% market share (CB Insights).
First Data has established itself as an industry leader by providing payment technology and services across the entire payment value chain, from merchant acquiring to issuing processing to digital banking. The company is well positioned to capitalize on the continued growth of electronic payments globally. According to IncFact, the payment processing industry is projected to reach over $3 trillion by 2025, presenting significant opportunities for established players like First Data.
Financial Performance
According to Forbes and Fortune, First Data has a sizable revenue stream, a strong balance sheet, and considerable profits. In 2019, First Data reported over $2.5 billion in quarterly revenue and $334 million in quarterly net income according to Craft. First Data Profile on Craft.co The company also had $544 million in cash and $567 million in quarterly EBIT as of Q2 2019. First Data Profile on Fortune 500
In the 2018 fiscal year, First Data generated $12.1 billion in total revenue. This was up from $11.3 billion in 2017 and $10.5 billion in 2016. The company has increased revenue in each of the last 5 years. According to Forbes, First Data ranked #808 in terms of profits and #766 in terms of assets among all public US companies as of 2019. First Data Profile on Forbes In 2019, First Data had a 10.6% profit margin and a 2.6% return on assets.
First Data has maintained strong financial performance in recent years through its leading position providing payment technology solutions. The company continues to see increased demand for digital commerce and financial solutions for businesses of all sizes.
History and Milestones
First Data has a long history of innovation and growth in the payments industry. The company was founded in 1971 as First Data Resources Inc. and initially provided processing services for credit card transactions. In 1980, American Express acquired the company as a subsidiary to process its bank card transactions. First Data operated as a subsidiary of American Express until 1992 when it was spun off as an independent public company through an initial public offering (IPO).
Some key milestones in First Data’s history include:
- In 1998, First Data merged with First Financial Management Corporation (FFMC). This expanded its capabilities in merchant services and debit card processing [1].
- In 2004, First Data acquired Concord EFS, Inc. for $7 billion. This added electronic funds transfer capabilities and expanded the company’s offerings [2].
- In 2007, private equity firms Kohlberg Kravis Roberts and Bain Capital acquired First Data in a $29 billion leveraged buyout.
- In 2009, First Data acquired Cardservice International, expanding its card production capabilities.
- In 2016, First Data once again became a public company, raising over $2.6 billion in one of the largest U.S. IPOs that year.
- In 2019, Fiserv announced plans to acquire First Data in a $22 billion deal. The acquisition was completed in 2020, positioning Fiserv as one of the largest fintech providers.
Through its acquisitions and evolution as both a public and private company, First Data has grown into a leading provider of payment technology and services.
[1] https://electronicpayments.com/epi-news/electronic-payments-history-celebrating-20-years-of-innovation/
[2] https://www.sec.gov/Archives/edgar/data/1043933/000095014403013336/g86136e10ksb.htm
Leadership and Culture
First Data’s C-Suite leadership team is led by CEO Frank Bisignano. Bisignano was previously COO of JPMorgan Chase. He took over leadership at First Data in 2013 after the private equity firm KKR acquired the company (First Data Corporation).
Other key executives include Vice Chairman and President Guy Chiarello, who previously held leadership positions at JPMorgan Chase (First Data Corporation); CFO Himanshu Patel; and Chief Administrative Officer Rosie Rios, former Treasurer of the United States.
The company’s leadership team includes executives with backgrounds at major financial services and technology companies like Visa, Fiserv, and STAR (a First Data company) (i2c Adds Four Industry Veterans to its Leadership Team).
First Data aims to foster a collaborative and innovative workplace culture focused on client service and operational excellence. Employees praise the company’s dedication to professional development and career growth opportunities.
Technology and Innovation
First Data has been at the forefront of payments technology innovation for decades. The company invests heavily in research and development to create new solutions that drive the future of commerce.
In 2013, First Data acquired Gyft, a mobile gift card app that lets users buy, send, manage, and redeem gift cards all from their smartphone (https://www.linkedin.com/posts/gyft_why-the-bitcoin-blockchain-could-make-gift-activity-6018157158653243392-4qXG). Integrating Gyft’s technology allowed First Data to expand its digital offerings into the high-growth gifting market.
More recently, First Data has focused R&D efforts on implementing blockchain, AI and machine learning to enhance data security and provide value-added insights to clients. The company has an entire division called First Data Labs dedicated to developing cutting-edge commerce solutions.
First Data also makes venture investments in promising startups to gain access to emerging technologies. For example, in 2021 it invested in Slice, an AI-powered fintech provider, to bring predictive analytics and customer insights to its merchant clients.
With its focus on innovation, First Data aims to continually push the boundaries of payments technology and maintain its leadership position. The company has one of the largest portfolios of patents in the payments industry.
Partnerships and Investments
As a prominent player in the payment and commerce solutions space, First Data has a strong network of partnerships and investments that help expand its reach and capabilities.
Noteworthy partnerships include Agent Partnerships with companies like CardConnect to distribute its products and services through agent channels. First Data also partners with major retailers and financial institutions like Citi to power payment solutions in their businesses.
On the investment side, First Data has made strategic investments in companies operating in adjacent spaces like fraud prevention and customer engagement. This includes companies like Forter and Badger Maps which complement First Data’s capabilities.
Joint ventures are another area where First Data has collaborated to enter new markets. This includes a JV with Bank of America Merchant Services called APT Tax and Payments Solutions aimed at tax payments.
Overall, partnerships and investments enable First Data to expand its ecosystem of capabilities and solutions for business customers.
Awards and Recognition
First Data has received numerous awards and recognition recently for its innovative products and services. In May 2012, OmniPay, a First Data company, won four awards at the Electronic Transactions Association’s Annual Meeting & Expo, including Best ISO/Agent Salesforce Program, Best End-User Sales Program, Best Channel Sales Program, and Best Overall Sales Program (BusinessWire). In June 2017, First Data’s Clover platform won Best mPOS Solution at the Pay Awards (Fintech Futures). First Data has been recognized as one of the World’s Most Admired Companies by Fortune magazine for its strong reputation and innovation.
Looking Ahead
First Data has significant opportunities for future growth and expansion. According to recent industry reports, the global merchant acquiring market is projected to reach $XX billion by 2030, up from $XX billion in 2024. This growth will be driven by increased adoption of digital payments and ecommerce (Source). As a leading player in merchant acquiring, First Data is well-positioned to capitalize on this market expansion.
However, First Data also faces some challenges going forward. The payments industry is highly competitive, with major players like Chase Paymentech, Wells Fargo and Elavon vying for market share. First Data will need to continue innovating its products and services to stay ahead (Source). Security and fraud prevention are also top priorities, as data breaches could erode customer trust.
According to employees, First Data maintains a positive business outlook, with 57% of staff confident in the company’s future direction (Source). Going forward, First Data is focused on strategic priorities like enhancing its integrated technology solutions, expanding internationally, and pursuing growth through acquisitions. With its strong market position and continued innovation, First Data appears well-poised for future success.