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First Data needs to pursue high-growth initiatives (FDC)

Major US payment processor First Data reported its Q4 2017 earnings, where it grew segment revenue 4% annually on a constant currency basis

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Major US payment processor First Data reported itsQ4 2017earnings, where it grew segment revenue 4% annually on a constant currency basis.

The firm called the quarter “solid” in apress release, and it was, marking a slight acceleration from the 3% annual growth it reported in both the previous quarter and the prior Q4.

Though rising card usage around the globe should be propelling First Data’s growth more than it is, the firm’s slight annual acceleration should bode well for its future performance.

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First Data’s growth was driven by international segments. Global Business Solutions (GBS) is First Data’s largest segment, comprising 58% of its overall segment revenue. It grew at the same 4% pace annually as the processor’s overall segment business, propelled by international gains. The firm’s EMEA region saw 10% annual growth because of gains in Germany and the UK. Likewise, Latin America saw 52% annual growth. And APAC increased 24% annually, driven mostly by the digital payments boom that followed demonetization in 2016. The gains in the APAC region could also be propelled by ongoing growth initiatives in Asia, like First Data’s partnership with JCB, which could grow its reach in the market.

But the firm continues to encounter shifting headwinds in the US — its largest segment — which is hurting overall performance.

  • North American performance was flat overall, thanks to ongoing joint venture issues.
  • First Data must continue to aggressively push into high-growth segments to compensate.

Dan Van Dyke, senior research analyst for BI Intelligence, Business Insider's premium research service has written a detailed report that explores the digital payments ecosystem today, its growth drivers, and where the industry is headed. The report also:

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