How Can FIS' Wallet Partnership With Ericsson Drive Long-Term Growth?

Fidelity National Information Services, Inc. FIS recently announced a partnership with Ericsson to simplify how organizations launch digital wallet services. The partners plan to combine FIS payments and issuing tools with Ericsson’s wallet infrastructure and open APIs in one connected platform.

Today, businesses have to link several systems to move, store, secure and manage money, making launches slow and expensive. FIS and Ericsson want to remove that burden by offering technology designed to work together from the start. The setup could help telecom operators, retailers, healthcare organizations and government agencies turn wallet plans into live services faster, while giving consumers a direct, easier path to their money.

Ericsson’s platform has more than 15 years of experience, supports at least 131 million users who transacted during the past 90 days and processes roughly $80 billion each month across 24 countries. That scale suggests the technology can handle payment activity across markets.

Adding FIS’ payments and issuing tools could lower execution risk for clients and make new services easier to expand. It also gives FIS an entry point into different sectors, where digital identity, connectivity and payments are increasingly coming together.

The initiative could generate payment processing and issuing revenue for FIS as clients launch wallets and volumes rise. A combined platform may shorten implementation cycles, reduce client integration costs and help FIS win businesses that might otherwise avoid complex wallet projects. The longer-term opportunity is recurring revenue tied to transactions, accounts, cards or service usage.

FIS’ Price Performance

Shares of Fidelity National have declined 39% year to date, underperforming the 3.7% fall of the industry.

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Zacks Rank & Key Picks

FIS currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader Business Services space are FirstCash Holdings, Inc. FCFS, Paymentus Holdings, Inc. PAY and Usio, Inc. USIO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for FirstCash’s current-year earnings is pegged at $11.85 per share, indicating a 35.3% year-over-year growth. FCFS has witnessed one upward earnings estimate revision over the past 60 days against no movement in the opposite direction.

The Zacks Consensus Estimate for Paymentus’ current-year earnings indicates a 39.4% year-over-year jump. PAY beat earnings estimates in each of the trailing four quarters, with the average surprise being 16.5%. The consensus estimate for current-year revenues implies 20.4% year-over-year growth.

The consensus estimate for USIO’s current-year earnings indicates an 88.9% year-over-year improvement. It has witnessed one upward estimate revision and no downward movement over the past 30 days. The consensus estimate for USIO’s current-year revenues implies 13.9% year-over-year growth.

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