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Fiserv to enable First Data's point-of-sale system on day 1

Fiserv Inc. plans to have First Data Corp.'s cloud-based point-of-sale system live on banks' platforms as soon as the deal closes.

"We see [digital enablement as] one of the early wins," Fiserv President and CEO Jeffery Yabuki said at the Wolfe Research Fintech Forum, referring to First Data's Clover system. "We're thankfully in the integration planning stages. We expect on day 1 for us to be live with that."

The $22 billion merger is expected to close in the second half of 2019. Clover, which Yabuki called "an additive" technology to Fiserv's own solution, will become part of the day-to-day processes of banks at a time when features to attract deposits are critical.

Management expects to find $900 million in cost cuts, with Fiserv seeing some savings early before that slows while the companies work to realize some more challenging and longer-term cost savings. The chief executive highlighted duplicative corporate expenses, and specifically cutting spending on technology infrastructure, such as by reducing the number of networks used.

First Data will also benefit from Fiserv's built-out team of more than 5,000 building automation and quality assurance engineers who are stationed outside the U.S., Yabuki said.

The companies expect to find $500 million in revenue synergies, which does not include and is not dependent upon platform consolidation, Yabuki said. The companies expect to realize the full revenue synergies and cost savings over five years.

"We have zero desire, and we are not going to disrupt clients," he said. "That was critical to [the acquisition]."

When asked about capital allocation, Yabuki said Fiserv will again focus on buybacks and should soon be able to "buy back a lot of stock."