To: Johnny Canuck who wrote (67393 ) 10/30/2025 8:24:05 PM From: Johnny Canuck Read Replies (1) | Respond to Why are clients refusing to pay the fees charged by FISV? Superfluous and "Empty" Fees on Clover VAS : Clients have repeatedly expressed frustration with what they view as unnecessary add-on charges for Clover's VAS, which include features like inventory management or customer analytics. These fees were ramped up under former CEO Frank Bisignano to boost short-term revenue, but many merchants see them as lacking genuine value—described by analysts as "empty fees" rather than innovative software. This led to a sentiment of "having had enough," with clients actively seeking cheaper alternatives.Aggressive Pricing and Lack of Transparency Post-Acquisition : Following the $22 billion First Data deal, Fiserv targeted small businesses (with limited bargaining power) by loading Clover with a "slew of fees" to maintain profitability. Revenue from Clover grew faster than payment volumes, signaling fee-driven rather than organic expansion. Clients felt overcharged for basic services, especially as economic pressures like softening consumer spending made every dollar count.Forced Migrations from Legacy Systems : Fiserv aggressively pushed ~200,000 merchants from its older Payeezy gateway to Clover, often without adequate incentives or support. This "forcible migration" resulted in lower transaction volumes and higher costs for clients, sparking refusals and departures. A class-action lawsuit alleges this misled investors by hiding the resulting churn.Broader Dissatisfaction with Management Responsiveness : New CEO Mike Lyons admitted the challenges are "largely driven by our own doing," pointing to "management discipline failures" in addressing customer feedback. A major technology outage earlier in 2025 in the financial-solutions division further eroded trust, with banks and credit unions demanding better products at lower costs. Impact on Fiserv The revolt has hammered Fiserv's merchant solutions segment, with organic revenue growth slowing to 5% in Q3 (vs. double-digit expectations) and overall financial-solutions revenue down 3%. Lyons has responded by vowing to reverse many Clover pricing changes, launching a new tech strategy, and overhauling leadership. Analysts like Andrew Jeffrey of William Blair note that in a competitive market, this focus on short-term gains has "impaired" Fiserv's ability to capture share, while Dan Dolev of Mizuho sees it as a painful but survivable "reset." Recovery will depend on rebuilding client relationships, but the damage has already fueled investor lawsuits and slashed 2025 guidance.
