Welcome to the Fiserv's 2021 First Quarter Earnings Conference Call. [Operator Instructions] At this time, I will turn the call over to Shub Mukherjee, Senior Vice President of Investor Relations at Fiserv.

Thank you and good morning. With me on the call today are Frank Bisignano, our President and Chief Executive Officer; and Bob Hau, our Chief Financial Officer. Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of fiserv.com. Our remarks today will include forward-looking statements about among other matters, the impact of the COVID-19 pandemic on our business, expected operating and financial results, strategic initiatives and expected benefits and synergies from the First Data acquisition. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. You should refer to our earnings release for a discussion of these risk factors. Please refer to our earnings release and supplemental materials for today's call. For an explanation of the non-GAAP financial measures discussed in this call, along with the reconciliation of those measures to the nearest to applicable GAAP measures. Unless otherwise stated performance, references are year-over-year comparisons and all references to internal revenue growth are on a constant currency basis. And now I'll turn the call over to Frank.

Thank you, Shub. Great to have you on the team. 2021 is off to a strong start with Q1 at or better than our expectations across a broad range of metrics. The strength of our results reflects our continued investment in technology, innovation, our client portfolio and our people through the COVID-19 pandemic. Let me provide a brief overview of our strong financial results in the quarter. You may have noticed that Q1 earnings presentation has been updated. If you're following along. I will provide some overview comments captured on the first three pages. And then Bob will provide more detail on a subsequent slides. Total company internal revenue growth was 4% for the quarter, including low double-digit growth in March. That performance was led by our Merchant Acceptance segment, which was up 8%, an exceptional result in light of the global pandemic and continued COVID restrictions, particularly in Brazil, India and a variety of countries in EMEA for much of the quarter. Adjusted operating margin grew 360 basis points resulting in an 18% increase in adjusted earnings per share. Free cash flow grew 8% to $821 million, a 100% conversion to adjusted net income. Our sales momentum remains quite strong as first quarter sales were up 42%, which strong results in our payments and international businesses and this momentum continues into the second quarter. Yesterday, we announced a 20-year agreement with Caixa Economica Federal to become the exclusive provider of Merchant Acquiring Services. Caixa is one of Brazil's largest banks with more than 26,000 sales outlets and a broad presence throughout all of Brazil, making this one of the largest wins for our company in Latin America and one of the largest globally. Also this morning, we announced a new solution with PayPal to enable our merchant network across…

Thank you Frank and good morning everyone. If you're following along at our new slides, I'll cover some detail on each of our segments. We had a strong first quarter in light of continued pressure from the pandemic across the globe. Q1 represents the final period of pre-pandemic comparison points with the impact beginning to materialize in the final two weeks of March last year. Total company internal revenue growth was 4% in the quarter led by the Merchant Acceptance segment, which grew 8%. First quarter adjusted operating income was up a strong 15% to $1.1 billion and adjusted operating margin increased by a very strong 360 basis points to 31.4%. This margin improvement was driven by our rigorous cost synergy execution, which produced $129 million of incremental cost synergies in the quarter as well as strong operating performance. First quarter adjusted earnings per share increased 18% to $1.17 compared to $0.99 in the prior year. Free cash flow in the quarter was $821 million, up 8% over Q1 last year and 103% percent conversion to adjusted net income impacting Q1's free cash flow was an increase in accounts receivable driven by a strong rebound in March. Turning to each of the segments, internal revenue growth in the Merchant Acceptance segment was 8% in the quarter. Our results were once again driven by strong performances in our portfolio of SMB clients supported by our Clover platform, enterprise clients supported by Carat and another strong quarter from our ISV business. This result includes a meaningful headwind from our EMEA region, which experienced restrictions for much of the quarter in several important markets for us including the UK, Germany, Ireland and Poland. As Frank discussed, our Clover GPV continues to grow very nicely, up 36% in the quarter. The outlook for the…

Thanks, Bob. Given our strong Q1 performance and an improved economic outlook, we are raising the low end of our outlook range for both internal revenue and adjusted EPS growth. We now expect 2021 internal revenue growth to be in the 9% to 12% range versus 8% to 12% previous. We expect adjusted EPS to be in the $5.35 to $5.50 range, which is a 21% to 24% growth over last year. This is up $0.05 at the bottom end from our prior outlook. We continue to expect adjusted operating margin to expand by at least 250 basis points and free cash flow conversion to be greater than 108% for the year. The range for internal revenue and adjusted EPS growth outlook are grounded in our performance to date. The current state of the economy and our internal assumptions about the trajectory of economic recovery, both of which have improved versus February when we provided our prior outlook. To remind you, the low end of our original outlook in February assumed no material economic recovery from where we were at that time. Similarly, the 9% at the low end of our updated outlook assumes the same no material economic recovery for the remainder of the year. Regionally, we are seeing good economic progress in the US driven both by government stimulus as well as COVID vaccine distribution with uneven recovery outside the US as more pronounced COVID impacts persisted in parts of EMEA, LatAm and APAC. As we indicated during our last earnings call, given the timing of the pandemic impact last year, we expect more variability in quarterly growth in 2021. Given difficult comparisons, we expected Q1 performance to be below our full-year outlook range and at once. We expect Q2 growth rates will be above the full-year outlook range driven by our business momentum and an easier year ago comparison. I'm proud of the results we've delivered as we navigate the ongoing global crisis. Our business has shown incredible strength and resilience leading to what we expect to be our 36th consecutive year of double-digit adjusted earnings-per-share growth in 2021 and setting a foundation for even stronger results beyond. In addition to delivering on our financial results, we continue to focus on our community. During the quarter, we successfully completed our back to business grant program in the original six locations that were selected in 2020. We also held two additional programs in Milwaukee partnering with the Milwaukee Bucks to celebrate Black History month, March 2 event partnering with the Bucks and Nancy Lieberman during Women's History Month to award additional brands to minority women owned small businesses. Last, let me thank our more than 40,000 talented associates around the world for their commitment and courage as we stand together to deliver value for clients, our colleagues and for you, our shareholders. With that, operator, let's open the line for questions.

Thank you. We would now like to open the phone lines for questions. [Operator Instructions] Our first question comes from Dave Koning from Baird. Your line is open.

Yeah. Hey guys, great job.

Thanks, David. Good morning.

Thank you. Good morning.

Yeah, thanks. So I guess first of all, just on the Acceptance segment really nice momentum there, maybe could you kind of walk through how January and February trends were? And then how kind of March and April trends were? Just to kind of understand how the months worked as things kind of progressed.

Yeah, I'd take it at the macro level. January and February obviously began a little movement up in volume, but really not very much. If you remember, in February we talked to you all and gave a little look at what we saw up until then, and that's when we took really that bottom end up from through the flow up from 7 to 8 because we felt better than it did when we talk to you on December 8 at Investor Day. We did see a strong March. We saw a weaker February in the US. I'd credit a fair amount of that to whether there is store [Phonetic] going on. We saw a stronger March, but I think on top of that we saw more lockdowns in EMEA and Brazil as I had talked about previously, although hampered tremendously by COVID still had spending going on. And I feel as we come into April and as we're going to head to the end of it we see the progression in the US. Obviously, India is a challenged environment in total right now. EMEA is beginning to open up and Brazil continues to perform. And why we take the bottom up from 8 to 9 there if that's helpful here.

Yeah. Thank you. I guess another way, kind of to think through this as we look really into Q2. I look back at the last five years of First Data, the GBS segment and very routinely, it was up about 10% sequentially in Q2, very close to the same every year and margins were up like the incremental margins were nearly 100%. So it's like a 300 basis points, 400 basis points, 500 basis points sequential jump in margins. Is there anything different about that seasonality? It would almost seem like the season now would be even better this Q2 than some of those past trends, but just trying to triangulate that.

Yeah, I think you're thinking about it right. I mean look at it -- and January versus last January was definitely a back compare would consider Q2 and why we talked about it as being outside the top end of the range is because it's against the weak comp. So I would expect that seasonality to perform better than you would have ever seen.

Dave, recall during our earnings call last quarter 90 days ago, when we talked about the cadence of our revenue growth, we expected Q1 to be below the full- year guidance range, given the comps against pre-pandemic period really all of January, February and half of March, then second quarter would actually be above the full-year guidance range with the second half of the year more in line with that overall full year. We do expect sequentially to continue to see seasonality benefit Q1 to Q2 in the Merchant segment. We also see the benefit of pandemic continuing to subside, particularly in the US as more and more people get inoculated and hopefully improvement in EMEA as some of the lockdowns began to be relaxed.

Yeah, great. Thanks guys. Nice job.

Great to talk to you in the morning too, Dave.

Thanks.

Thank you. Our next question comes from Darrin Peller from Wolfe Research. Your line is open.

Hey guys, great job. Thanks. I want to just hone in on looking at the outperformance in the Merchant side going back. Frank, if you look at what you guys outperformed on, there's a lot of debate, was it mix or was it -- the technology. You showed some really good data points on Clover and Carat ISVs and now when thinking about coming on the other side of this pandemic. First of all, if you can comment on that point that it's probably a good combination of mix and technology. What was the areas that really stood out technologically? What are the areas that you now see on the other side of the pandemic that are doing more than you would have thought pre-pandemic and could drive even better growth to that 9% to 12% merchant range you've talked about?

Yeah, I think Mercialys [Phonetic] think about Clover growth very, very strong, e-comm wins and that's the backlog that is on boarding continues to be very, very strong. Our ISV business performing well. I mean lockdowns in EMEA definitely affect us and I would see us coming, we could feel that in the UK opening up. Our client mix, we've been bullish on the whole way, but I've also been very clear that we have a huge diversed client base from SMEs to large enterprises across every industry sector as well as the large presence in geographies. And so I think when you look at outlook goal, we still have lagging verticals, restaurants, travel and services. So we have an expectation in the later second quarter and in the third quarter that recover well. We've invested heavily and Clover continue to do it heavily and Carat continue to do it heavily and Clover Connect. So I look forward to us being able to continue the type of momentum we have for a long time.

Okay. All right. So all of those areas are really going to be a bigger percentage of the mix coming out of this than they were before I guess, right?

Sorry again, Darrin.

So whether it's Clover or Carat or ISVs the mix contribution -- the revenue contribution from those areas probably will be notably bigger percent of revenue coming out of the pandemic than they were before. I would say, and I don't know if you can give any update on data points around that, but the Investor Day started this off with some good ones. Is that fair?

Yeah, Darrin. I think there's a couple of things that will play. Number one is as Frank pointed out, while we have strength of diversity of geography and client base, meaning we serve the largest retailers in the world, all the way down to the smallest SMBs, the breadth has served us well. But we also of course have pretty meaningful exposure to restaurants and retail that have still a lot of recovery ahead of them that will help us with growth going forward. We think we've outperformed the market in the last four, six, eight quarters, quite frankly, and we have the opportunity to continue that. The other dynamic of course is as Clover and ISV and e-comm, which are growing faster than the overall average, become a larger part. You will see better growth from those becoming a more meaningful piece of the overall company. As we pointed out $1 billion e-comm business to grow nicely, it becomes a bigger part of that $6 billion segment and providing some nice growth.

All right. Just very quickly, repurchasing shares. I think you did 5 -- a little over 5 million shares. Again that's a key area that we focus on for you guys, especially given good free cash conversion. So, just can you update us on your appetite and your capacity for the rest of this year. And thanks again, guys.

Yeah, sure. We feel great about the position that we're in, good cash generation in the first quarter. I mentioned in my prepared remarks, a little bit of accounts receivable growth driven this given the strong March, which of course will generate cash in the second quarter as we collect those receivables, 103% conversion in the first quarter, well on track to do the 108% for the full year. So we feel that we've got continued good strong free cash flow generation, gives us the capacity to buy back shares and of course, as you heard us lay out in our earnings, looks to me at our Investor Day back in December $30 billion of capital to deploy over the next five years. We did a meaningful buyback in the first quarter and we see the opportunity to do that for the balance of the year.

Great. Thanks again, guys.

Thank you. Our next question comes from Lisa Ellis from MoffettNathanson. Your line is open.

Good morning, guys. I had a specific question on the use of the digital sales channels for Clover. If I recall prior to the merger with Fiserv, this was an area of First Data had invested really heavily in building online sales channel so a merchant could apply, get approved instantly by their Clover's directly and I realize we hadn't heard a lot about this too much in the last year or two. So I was just wondering at the time that was a major differentiator for your platform compared to your large competitors. Could you just update us on how widely this channel has been deployed and how significant of a factor it is in Clover sales? Thank you.

I'd say, first of all, we continue to hear in there and when you hear us talk about the addition of new bank programs we view every one of those as us ultimately driving digital adoption, right? We always believe that partners were great places for digital adoption and we believe Clover itself was great place for digital adoption. When you look at the totality of our business globally, I would still put it in the not meaningful in total category, but a channel, which continues to accelerate its growth and one that we believe we will deliver more integrated opportunities for digital sign-up. And when you think about things we will do longer-term with our bank partners having a one of a kind digital experience for that bank merchant partner while continuing to work with Paychex and the Verizons also and using our direct channels to digitally sign up. So I think it will be part of the five-year journey we talk about. It's not the overwhelming part of our sign-up machine, but our capability is huge and our ability to attract new partners because of that digital capability and sign up merchants is being contributing to the growth rate.

Okay. And then my follow-up, another one related to go to market or distribution on the Merchant side. Just a question on your strategy with e-commerce platforms and I'm thinking specifically about businesses that aggregate SMBs in a particular industry like restaurant aggregators or retail aggregators of a particular type. With everything you're doing with Clover, with Carat, with Clover Connect with the recent acquisitions, how are you serving these types of customers? Or how are you -- how do they sort of fit into your strategy in Merchant? Thank you.

Well, I think it fits completely in our strategy. We've always viewed us as a partner of choice., a great distributor. We operate in basically every vertical and every capability and you hear us today, talk about extending our relationship in Brazil, in Latin America with one of the largest income players. That's really an example of us, our commitment to market places actually and you'll see that happen internally on the new open coming marketplaces us being an enabler and a distributor for them too. So I think we have a deep commitment there as you can capabilities are strong and you hear it and the things we will say today in our announcement.

Terrific. Thank you. Good stuff.

Thank you. Our next question comes from Dan Dolev from Mizuho. Your line is open.

Hey, thank you. Amazing results, very impressive. Great job, Frank and team.

Thank you, Dan.

So I almost refused to accept the explanation that it's just a macro improvement. I mean I think there is significant share gains that you guys are getting out there and that's what we are hearing from the channel in Merchant Acquiring. Can you maybe give us a little bit of an understanding of who you're taking share from, who you're displacing? What are you seeing out there? How are you winning and who are you winning against? Thank you.

Well, if you think about, -- it's a global -- it's a global business we're in. So you saw us announcing a large deal in Brazil. And we've been -- we started that Brazilian business back '14 and '15 and we've been taking share beyond where anybody had thought was capable on that market itself. So I'd point to that because we weren't a big ISV player back in '15 and '16 or probably '17 until we bought CardConnect and BluePay [Phonetic] but there we fit together with Clover and began that journey. You see that. You well know probably people thought we're an e-comm lagger [Phonetic] and we continue to win in that space. Now in summary statements. It's new markets but in many cases, taking it from all the places you won't suspect and you know I would look at us saying, hey, if you go through the hundreds of bank merchant wins we have talked about, fundamentally, those are 50% takeaways. So we continue to compete against everybody very strongly. And that in every market and in every vertical and it gets back to what we had said on Investor Day, when you look at this portfolio with Clover, with Clover Connect, with Carat, with global distribution with the client base that we have from largest in the world to the corner as I like to say it the corner store I think we've built a business that's the most diverse and probably has the most technology in all honesty.

Thank you. And then, a quick follow-up. If I think about that 8% growth in Merchant, would you -- and I'm sorry if I missed it, can you give us maybe the cadence like January, February, March, and what it's looking like in April specifically on that 8% in Merchant? Is there any way to parse it out a little bit?

Yeah. Dan. I think there is a couple of things. If you look at the year-over-year growth rate obviously given the pre-pandemic comparison in January and February and then March half of the quarter was pre-pandemic. The other half -- half a month -- the other half of the month was a pretty severe shutdown as particularly in the US, but also in Europe. People really significantly went home and commerce really took a hit in the second half of March last year. So you see the year-over-year comp get significantly better in those last two weeks. If you just look at kind of the raw transactions, January started out the year, the quarter strong, February as Frank mentioned, we saw some weather, particularly in the south in the US slow things down a bit, and then March came back quite a bit stronger. If you -- if you can adjust for weather, I would say January started out nice, February again adjusted for weather was again in line or good with January and then we started seeing things really pick up in March, I'm sure not coincidentally and help supported by the SIM 3 payments that started flowing out. And we've seen that continue into April. So we're definitely feeling the the recovery of the pandemic as vaccines really spread in the US. We're seeing more and more commerce retail picking up, restaurants starting to pick up, still down year-over-year in a meaningful way but starting to improve sequentially pretty nicely.

Thank you. I appreciate it.

Thank you. Our next question comes from Andrew Jeffrey from Truist Securities. Your line is open.

Hi. Pardon me. Good morning. I appreciate you taking the question. Lots of helpful inputs and commentary in the Acceptance business. Can you talk a little bit about churn. I'm just trying to get a sense of how that might improve or what the dynamic looks like as we reopen in terms of what's coming in the top of the funnel be that Clover SME enterprise e-comm versus what's coming out of the bottom the funnel and how we think about that sort of all translating into sustainable internal revenue growth in your Acceptance business?

Yeah. Well a pandemic, I guess, a lot of people did shut down their businesses and get a lot of people to open up new businesses. I think we're going to see the strongest small business formation in the second half that we've ever seen. And that's why these channels we have are so darn valuable. Our commitment to the small businesses you probably saw us as a technical provider one of a few to the SBA for the restaurant brand. So I think we've done a good job over the long haul of keeping our clients and I think our Clover platform, our ISV platform, our Carat platform all are well received by our client base. And I look for strength in small business formation even for those who shut down to come back in a different shape and form. So I guess churn seems very good for us, if you want to think about attrition, I mean we feel strong about what job we're doing and of course any client leaving upsets us at any level. But I think the other part we got to put on top of it is tremendously strong small business formation and why all of these channels we have we believe are so darn valuable for us in that process.

Okay. That's helpful. Thank you. And Bob, quick follow-up on payments. Again really nice KPIs, whether it's Zelle or debit transaction growth and I realize there are some pandemic headwinds perhaps in credit. Can you offer some insight as to win some of the digital solutions P2P I'm thinking in particular really start to move the needle from a topline perspective in that business.

Yeah. Andrew, there -- as you pointed out, we saw some very nice KPIs support in the overall payments business, Zelle with both the number of transactions and number of users doubling certainly supports debit processing as well as the debit network performing quite well. We continue to love the acquisition of Ondat and our ability to provide additional digital services for card controls and card activation to our overall channel. We see that as a significant growth opportunity not only to obviously provide that particular capability, but that as an overall part of our solution. We certainly have the benefit of some of the significant wins in the credit issuing business that we talked about over the last couple of quarters beginning to ramp late 2021 and into 2022. The 2% growth in the Payments segment in the first quarter here is not an indication of where we see the opportunity for the full year. There are some definite headwinds there from the pandemic that we expect to subside. And I think we said this at the end of last earnings call, but still believe it today. We expect the Payments segment for the full year to be at the upper end of the medium-term outlook for internal revenue. So we believe 2022, 2023 that Payments segment can grow 5% to 8% and we think this year will be at the upper end of that as we head into the second half of the year and we see the full-year results. So I think we're in a great spot. We'll see some continued growth, particularly in our digital side of the Payments and we'll see improvement in that bill pay and credit issuing particularly the retail private label in the second half.

Thank you.

Thank you. Our next question comes from Tien-tsin Huang from JP Morgan. Your line is open.

Hi, good morning. Really appreciate the new slide formats real good. Just looking at the Acceptance side here, the 8% internal revenue growth and 13% global volume growth, do you see potential for that spread between revenue volume growth to narrow or even flip in the second quarter or the second half of the year? I'm asking because based on what Frank said around new businesses reforming and hopefully more in-store behavior that should help you I think on the spread. So I just wanted to check that.

Yeah, I think, that's the right way to think about it. There is certainly opportunity going forward and we'll see obviously how the economy rebounds into the second half of the year. All indications right now are quite strong. It's why we lifted the bottom end of our guidance range now twice in a row from 7% back in December to 8% in last quarter and now 9%. We see the economy improving and that helps overall Merchant Acceptance it helps the overall company but Merchant Acceptance in that spread also.

That's great. And then just a quick follow-up. I wanted to ask about Star and your PINless debit initiatives and investments in light of I think Visa did disclose that DOJ is looking in into some of the debit practices so those good time to check in with you on, on what's happening with the PINless debit.

Yeah, I mean Star and Excel are standout performers for us and our investment and business continues to be large. I think you'll continue to see us invest where card on PINless debit and other aspects around signature too as we had talked about over time. That's a long haul. It's not a short haul. It's a lot of the infrastructure work, but we're investing heavily in the network and we have a deep belief in the growth in network and the power of the network, especially in this company, where we have a network business and we have merchants and it is good for financial institutions, Star and Excel together and good ground merchants, so a long journey. But that will continue to be something that we'll talk to you about it and we're committed to and show as part of the star-performing businesses in the company. No but intended.

Got it. Thanks for the update.

Thanks, Tsein-tsin.

Thank you. Our next question comes from David Togut from Evercore ISI. Your line is open.

Thank you. Good morning. Looking at the acceleration in Clover TPV growth from 25% in Q4 to 36% in Q1, can you drill down a little bit into the drivers there, for example, how much would have been from on-boarding new clients versus an improvement in same-store sales? Just trying to understand the sustainability of this higher growth rate for Clover.

Yeah, I think the way to think about it is, number one, we do think the growth rate of Clover is quite sustainable. We've seen very strong growth the last several years, 25%. 30%, 35%, 40% in a given quarter. I think you saw in fourth quarter really the second half of last year some slowing driven the pandemic obviously as we anniversary that and continue to see, as Frank pointed out, new business formation that certainly is a beneficiary to Clover given the depth of our channel capability and our distribution system, we think we can benefit very nicely from that new business formation. So I would expect that Clover revenue to me their GPV growth to continue for some time going forward, and we continue to invest in capability there and continue to enhance our solution set.

Understood. Just as a follow-up. Looking at the 2% organic revenue growth in the Fintech segment in Q1, can you call out the headwind that you saw from declining periodic revenue, so we can gauge the underlying internal growth going forward?

Yeah. For Q1, that periodic headwind, which again was largely driven by termination fees, was about 150 basis points. Said another way, outside of that, we would have grown about 350 bps. We do expect the headwind to continue into second quarter although to a slightly abated rate level and then as we enter the second half of the year that will no longer be a headwind for us going forward as it gets to a diminished level and then we'll see what happens beyond that in terms of, as the economy improves, do you see more bank mergers, which tends to be a driver of termination fees, but that headwind subsides a bit in Q2 and then I anticipated not being a headwind that we discussed in the second half of the year.

Understood. Thanks so much for the helpful detail.

Sure. Thank you.

Thank you. Our next question comes from Ramsey El-Assal from Barclays. Your line is open.

Hi guys, thanks for taking my question here. I wanted to ask about the broader M&A strategy. Should we expect more deals sort of similar size to Pineapple and Ondat? Or would you take a swing at something a little larger if -- or maybe more transformative if the opportunity presented itself?

Well, I think, first, we feel great about our capabilities and the total hand we have, The tuck-ins have played very, very well for us for a very long time. I think if you'll look at Ondot and you're going to see that gets spread across the product base, to client base that digital capability and integrated fashion. I think Pineapple takes us on another area around our ISV capability. I think if you look at Radius8, it is about bringing that across this large platform, so they played very, very well for us. We've been very committed to our capital allocation strategy, tried and true and all of these acquisitions fit exactly within that envelope but of course, we pay attention, think about everything and as a dynamic world it keeps changing. So I think we're pretty committed to the path we're on, and we think about all things in the market always around the table. And so it has to work for our shareholders for it to make sense and that's why we held our capital allocation strategy.

All right. That makes lot of sense. Lastly for me, this is just a point of clarification, forgive me if you guys already covered off on it, but in the slide deck you mentioned pressure on long cycle credit processing in the Payments segment, what is that exactly? And as a headwind, do you expect to persist?

Yeah, I would -- that is essentially -- our credit issuer processing business is not transaction driven. And so as we see the economy improve in more active accounts, we'll see an improvement in that revenue. And so that's a bit of a lagging indicator and we expect that to to take place really in the second half, as the economy improves, we'll see more activity. In addition, you'll get different comparisons. And so we think that helps lift the growth of the the Payments segment and obviously the credit issuer processing.

Great. Got it. Okay. So that's just a euphemism for credit issuer processing effect, right? Okay. Terrific. Thanks so much.

Thank you.

Thank you. And our last question comes from George Mihalos from Cowen. Your line is open.

Hey guys, thanks. Thanks for squeezing me in. Just wanted to ask kicking things off on the Merchant side, the nice momentum you're seeing there. As it relates to EMEA, we're hearing anecdotally that things are getting better throughout the course of April, particularly in the UK, and I'm just curious if you could share any high-level trends that you might be seeing through the month of April and would you guys expect that region to be in the black in 2Q. Is there any reason why that's not possible?

I think the UK is, we can feel it, we see it. I think referred to potentially somewhere along the line here too. I think Ireland still has challenges but you know, our expectation is that in the second half. EMEA is in recovery. I don't want to be thinking too hard about this quarter itself as much as the full year. And we believe the EMEA business will perform well in the second half. I think it's been under pressure in the first half.

Certainly feels like it's in the right trajectory though, as you say the restrictions are beginning to lift UK in particular and hopefully some of the other countries in that region soon.

Okay, that's helpful. And just as a quick follow-up, Bob, on the on the Fintech segment, should we continue to believe. I mean it seems like it's tracking in the right direction, but is the 4% to 6% growth for Fintech. I think that you laid out last quarter, is that still on the table for '21 or how are you guys feeling about that range?

Yeah, we didn't give a guidance for '21, that 4% to 6% is our medium-term guidance. We don't give specific in your guidance on our [Indecipherable] segment level. I'd just reiterate we did -- we printed it too, if you adjust for the periodic revenue. It's a 3.5% in the quarter that subsides pretty meaningfully in the second quarter and is no longer a headwind in the third and fourth quarter. So we'll see a nice uptick in that segment and believe we'll be in that range in the second half of the year for sure. Okay. Thank you, guys. Congrats on the results. Thank you very much.

I'd like to thank everybody for their time today. I look forward to taking to you all. And we appreciate everything you do. Have a great day.

[Operator Closing Remarks]