Fiserv Expands Gig-Economy Financing with $140 Million Acquisition of Payfare

U.S. fintech giant Fiserv (FI.N) has announced the acquisition of Canada’s Payfare (PAY.TO) in a deal valued at C$201.5 million ($140 million). This move is part of Fiserv’s strategy to broaden its payment services for gig-economy workers. The acquisition follows Payfare’s strategic review, which was triggered by the announcement that its partnership with DoorDash (DASH.O) for the DasherDirect card program would not be renewed beyond early 2025, causing a significant drop in Payfare’s stock value.

Fiserv’s offer to purchase Payfare’s shares at C$4 each represents a 90% premium over the company’s last closing price but is significantly lower than its stock price before the DoorDash news. This acquisition is expected to give Fiserv a stronger foothold in the rapidly growing gig economy, where workers often rely on digital banking platforms for urgent financial needs.

Payfare’s partnerships with major gig-economy platforms such as Uber (UBER.N) and Lyft (LYFT.O) will be a valuable asset to Fiserv as it expands its embedded finance services. The deal is expected to close in the first half of next year and may mark one of the final initiatives of Fiserv CEO Frank Bisignano, who is set to head the Social Security Administration under President-elect Donald Trump.

The growing demand for fintech services, especially for early wage access, has been highlighted by a 90% year-over-year increase in transactions processed by fintech providers. The deal aligns with Fiserv’s strategic focus on expanding its technology offerings and presence in the embedded finance space.

Payfare’s shares surged by 78% following the announcement, although they have fallen nearly 66% over the course of this year. Meanwhile, Fiserv’s stock has seen a 55% increase.