First Data and Fiserv each reported a strong Q1 ahead of their merger

This is an excerpt from a story delivered exclusively to Business Insider Intelligence Payments Briefing subscribers. To receive the full story plus other insights each morning, click here.Banking technology company Fiserv and major US processor First Data both announced their Q1 2019 earnings, providing insights into their performance ahead of their upcoming merger.Earlier this year, Fiserv announced it's acquiring First Data in an all-stock deal worth $22 billion. The transaction is expected to close during the second half of 2019 subject to regulatory approvals. Here's what it means: Both firms saw healthy growth across segments this quarter — with First Data's Global Business Solutions (GBS) posting impressive results in particular.GBS, First Data's largest segment, grew 10% year-over-year (YoY) on a constant currency basis in Q1 2019 to reach $1.4 billion. This marks an acceleration from Q1 2018, when the segment ticked up 7% YoY to reach $1.3 billion. A few regions saw particularly noteworthy results in Q1: First Data's North American GBS grew 5% annually on a constant currency basis to reach $1.4 billion, up from 4% YoY growth in Q1 2018 — making it the second quarter in a row the region saw an acceleration. And Latin America posted an impressive 58% YoY increase to reach $100 million. First Data chairman and CEO Frank Bisignano — who will become Fiserv's COO after the acquisition — noted that the firm's performance was “driven by strong growth across [its] core global merchant acquiring and card processing businesses.” Fiserv's revenue grew 5% annually to reach $1.4 billion in Q1 2019, marking an acceleration from 4% YoY growth in Q1 2018. In its earnings release, Fiserv president and CEO Jeffrey Yabuki — who will reside as CEO over the joint company — said the results were “ahead of initial expectations.” Further, the firm enthusiastically highlighted the upcoming acquisition as a bright growth point. Yabuki said Fiserv is “well into integration planning and looking forward to completing the First Data acquisition in the second half of the year.” On April 18, Fiserv shareholders approved the acquisition with more than 99% of votes in favor of the deal. The bigger picture: The combination of two legacy networks can ultimately position both Fiserv and First Data for rapid growth with the ability to cement their leading positioning amid ongoing disruption by digital-first firms.Fiserv could serve as a point of synergy for First Data as the companies merge.Fiserv controls more than a third of the US core banking market and has more than 12,000 financial services clients in 90 countries; having access to those relationships could help First Data continue to ride the acceleration it's been seeing in North American GBS in recent quarters. Further, Fiserv can open up significant channels for Clover, First Data's point-of-sale (POS) system, which processed approximately $70 billion in annualized volume globally during Q3 2018 and shipped its 1 millionth device.Meanwhile, First Data could allow Fiserv to mitigate ongoing threats from fintechs. First Data is one of the largest US acquirers and has an extensive global network: It operates in over 100 countries across 6 million businesses and 3,700 financial institutions, and the major processor sees $2.6 trillion per year. Tapping into First Data's massive network could open up Fiserv's services to a large swath of global merchants. The acquisition will allow the combined companies to offer services covering e-commerce, integrated payments, card issuer processing, and account processing, among others. The combined business could ultimately emerge as a payments giant that could threaten the competitive positioning of firms across the space. Interested in getting the full story？ Here are two ways to get access: 1. Sign up for the Payments Briefing to get it delivered to your inbox 6x a week. >> Get Started2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Payments Briefing, plus more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now