Welcome to the Fiserv Second Quarter 2013 Earnings Conference Call. [Operator Instructions] Today's call is being broadcast live over the Internet at fiserv.com and is being recorded for future reference. In addition, there are supplemental materials for today's call available at the company's website. To access those materials, go to the company's website and click on the link in Events section of its home page. The call is expected to last about an hour, and you may disconnect from the call at any time. Now I will turn the call over to Eric Nelson, Vice President of Investor Relations at Fiserv.

Thank you, and welcome to our earnings call for the second quarter. With me today are Jeff Yabuki, our Chief Executive Officer; Tom Hirsch, our CFO; and Mark Ernst, our Chief Operating Officer. Our remarks today will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We will make forward-looking statements about, among other matters, adjusted revenue growth, adjusted internal revenue growth, adjusted operating margin, adjusted earnings per share, free cash flow, free cash flow per share, revenue and cost synergies, sales pipelines, acquisitions and our strategic initiatives. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. Please refer to our earnings release, which can be found on our website at fiserv.com, for a discussion of these risk factors. You should also refer to our earnings release for an explanation of the non-GAAP financial measures discussed in this conference call, and for a reconciliation of those measures to the nearest applicable GAAP measures. These non-GAAP measures are indicators that management uses to provide additional meaningful comparisons between current results and prior-reported results, and as a basis for planning and forecasting future periods. Also, please mark your calendars for our Annual Investor Day, which will be held in Boston on December 10. Invitations will be sent this fall. In the meanwhile, please contact our Investor Relations team for additional information. With that, let me turn the call over to Jeff.

Thanks, Eric, and good afternoon, everyone. Our strong results for the quarter are consistent with our plan, which anticipated an acceleration of revenue and earnings throughout the year. New business is coming online as expected, and we have good visibility to the remainder of the year. We're on track to achieve our full year financial objectives. Adjusted revenue increased 12% in the quarter and is up 9% year-to-date. Adjusted internal revenue growth accelerated slightly more than anticipated to 4% in the quarter. We achieved 7% internal revenue growth in our Payments segment, which was the highest level since the first quarter of 2008. Adjusted operating margin in the quarter expanded 110 basis points to 30.5%, and was up 210 basis points sequentially. Operating margin benefited from revenue growth in our scale businesses, favorable mix and strong Operational Effectiveness results. Overall, adjusted operating margin is up 50 basis points through June 30. Adjusted earnings per share increased 18% to $1.50 in the quarter and up 16% to $2.83 through June 30. Free cash flow per share grew 26% to $2.67 through the first half of the year. This excludes $116 million of a distribution received from our StoneRiver joint venture in the quarter. Growing market momentum is visible in our results. Sales in the quarter, excluding Open Solutions, were on track at 102% of quota. For the 6-month period, actual sales were up 9% versus the prior year, which is better than the headline given that last year's second quarter included the TD Bank bill payment sale, which was one of our largest transactions ever. At the start of the year, we shared 3 key enterprise priorities to help you gauge our progress. First, to continue to build high-quality revenue growth and meet our earnings commitments. Next, to extend market momentum…

Thanks, Jeff, and good afternoon, everyone. Adjusted revenue increased 12% in the second quarter to $1.1 billion, and increased 9% in the first 6 months to $2.2 billion compared to the prior year periods. Adjusted internal revenue growth was 4% in the second quarter and is 2% year-to-date. Adjusted earnings per share increased 18% to $1.50 in the quarter and is up 16% to $2.83 through June 30. Adjusted operating income increased 16% in the quarter to $347 million compared to last year. Adjusted operating margin was 30.5%, an increase of 110 basis points over the prior year's quarter, and up 210 basis points sequentially. Margin expansion was driven by strong Operational Effectiveness results, business mix and the high-quality revenue growth in our Payments segment. For the first 6 months, adjusted operating income was $655 million, an increase of 10% compared to the prior year, and adjusted operating margin improved 50 basis points to 29.5%. Now on to the segment results. Adjusted internal revenue in the Payments segment increased 7% to $562 million in the quarter, and increased 4% to $1.1 billion in the first 6 months. Excellent performance in card services, biller and digital channels and acceleration at our bill payment business drove the strong revenue growth. Bill payment transaction growth, which was boosted by the significant sales wins, accelerated to 7% in the quarter and was up 4 percentage points sequentially. Also, e-bill transactions continued to progress, up 5% year-over-year for the second quarter in a row. Debit transactions in our card business continued to grow well above the market, up 15% in the quarter, 2 percentage points sequentially and up 14% year-to-date. We have also added 74 new debit clients over the first 6 months of the year. We continued to build the issuer side of the…

Thanks, Tom. As I mentioned upfront, sales, excluding Open Solutions, were solid in the quarter, attaining 102% of quota and are 94% of year-to-date quota. Actual sales through June 30 were up 9% versus last year, which included the very significant TD Bank bill payment sale in the last year's second quarter. Excluding the TD Bank transaction, sales through June 30 are up 27% year-over-year. Our pipeline remains healthy, and we are optimistic that we will achieve our full year sales target. Integrated sales were $63 million in the quarter, and are $101 million through the first half of the year versus our $210 million annual target. Payments and Digital Channel Solutions led our performance again this quarter. We're on track to achieve our integrated sales objective for the year. Our Operational Effectiveness goal for 2013 is $60 million, which includes the anticipated Open Solutions cost synergies. We achieved $32 million of savings or 53% of our annual target in the first 6 months of the year. We've captured some synergy benefits earlier than anticipated, which contributed to our strong first half results. We are well positioned to meet our Operational Effectiveness objective for the year. The environment continued to be stable in the quarter, with discussion of possible interest rate movement providing a bit more optimism across the market. Regulatory actions continued to be modest, with 16 in the second quarter and only 25 year-to-date, which is down about 30% compared to the same period last year. We're also seeing a gradual pickup of M&A activity in the banking market, which we view as a generally positive environmental sign. Our view of technology spend has not changed from the first quarter. Financial institutions remain focused on solutions that can help them generate revenue, deal with the complex regulatory environment…

[Operator Instructions] And our first question comes from David Togut with Evercore Partners.

Is the composition of growth that we saw in the quarter, high single-digit payment growth but low single-digit financial, is that the sort of breakdown we should expect for the balance of the year?

Yes, I think that's reasonable. We are going to have some fluctuations, as you know, David, in the Financial segment as license fees and other factors. But yes, I think that's reasonable from a range standpoint.

Got it. And then second, Jeff, you highlighted greater-than-expected revenue synergies from the Open deal, can you drill down a little bit into where you're seeing the incremental growth at least above your expectations?

Yes, I mean we -- I would say the increased expectations are taking 2 forms. There is far faster engagement in the process. In other words, we have the client base is quite excited to have the opportunity to basically shop within the financial services technology store that we have. And so whether it's on the debit or credit card side or online banking, mobile, bill payment, those kinds of things, and you have tremendous interest there, as well as in other products that we probably had not prioritized. And that could be anywhere from our multichannel management solutions to our statement -- our custom statement offerings and just lots and lots of interest there, which we think is attributable, not just to, and to the fact that the services weren't there, but also this whole notion of -- specifically around the DNA platform, they bring a more modern technology architecture to bear. And these products, in combination with DNA, really go a long way in crafting this new financial services experience, which we think will be quite important over the next 5 to 10 years.

And I think to add to that, David, I think the sales pipelines that we're seeing in regards to Open and other value content around DNA have built a lot faster than we would have anticipated sitting here back at the start of the year. So that's a very positive sign.

I see. I appreciate the detail. Just finally, Jeff, you're probably aware a number of your competitors are targeting some of the Open Solutions/DNA customers. What have you seen in terms of client retention with these customers, particularly in this transition period?

Yes, so we are quite bullish about what we're seeing going on in the existing Open Solutions base. Again, the lion's share, the substantial majority of the synergy value is going to come from existing clients adding on current Fiserv solutions. So the reception has been quite warm. And that doesn't mean that we won't lose a client at some point. I mean that's, unfortunately, part of how the business works. But I'm not currently aware of situations where we have been under attack by clients and have those responses going the wrong way. So on balance, within the DNA base and the total plus base and the Open base overall, we're feeling quite good about that.

Our next question comes from Tien-Tsin Huang with JPMorgan.

Just to follow up on David's question around retention. Same thing on Harland -- I guess with the Harland acquisition and D&H taking it over, what's the strategy for potentially going after that account base? What's the implications for Fiserv, that kind of thing?

Yes. So Tien-Tsin, I mean obviously, we've been competing against that base for a long time. And we -- to some extent, anytime you have a transition, especially a transition like this, it has clients kind of reconsider, "Is this the right path for us and what does it mean?" Being that we've done so many acquisitions over the years, we know exactly what that feels like. And we have a pretty good handle on how to compete against that. So on one hand, we think it's good news that you continue to see validation that there's going to be combinations of providers. On the other hand, we think this represents a good opportunity go out and win some incremental business, frankly, none of which has been factored into how we thought about the world, given how new this announcement is.

Yes, fair enough. Then I think you said internal revenue growth accelerated a bit faster than expected. Can we attribute that primarily maybe to the license sales in the Financial segment or was it more than that?

Yes, I mean, I think I'll give it a shot and let Tom correct or add where it should be. We did have a good quarter on license revenue in the Financial segment, probably a little bit more than we thought we would have. But as you know, license revenue tends to bounce around. But on the payment side, the 7% payments growth, as you know, that's not license revenue. That's kind of high-quality recurring revenue that we think is going to be pretty sticky moving into the rest of this year and into '14. So from that standpoint, we feel good about the composition of the mix between payments and in the Financial segment, and expect to see the Financial segment continue to do quite well for the remainder of the year.

All right, great. Last one from me, I promise. Just the backlog converting, is it still on time? It sounds like the on-boarding of large transactions you talked about is being -- is going well, I think is what you said. Is that still the case? Any change there?

No, I mean we're in good shape. There were a couple of transactions that needed to go live in the month of July. And we're right there.

Our next question comes from Dave Koning with Baird.

And I guess, first of all, just wondering, how much maybe if we disaggregate the Payments business, how much of that growth came from the new deal signings, the large deal signings? And maybe how much is kind of the underlying growth, excluding that?

So that is a good question. I mean the majority of the growth every year is going to come from the existing base and it's going to come from transactions, new transactions, more of the same kinds of transactions. So you're going to see that every year because, obviously, you're replacing revenue that might have run off in one way or another. For this year, in particular, and we'll see it again next year, we've had, as you know, a number of large clients. So at the margin, right, that's layering on in a way that is quite positive. But we are seeing pretty good growth just in the fundamentals of our different businesses. You can see it in a place like e-bill, for example, right? The second quarter of 5% transaction growth back-to-back after having no 5% quarters last year. Some of that is coming from new bill payment clients, but much of that is coming from new feature function that we've embedded in the product that's creating and enhancing the experience for our bill payment users. We've just put a new release into the market, which is, in fact, helping the bill payment users to have yet again another level of high-quality experience. So we're continuing to tweak and mold our ability to change the adoption patterns, so that's helping as well. And then things like we mentioned, Dave, the tablet ASP offering that we just went live with in the last -- over the last 45 days. We're really excited about how even something like that is looking. So a lot of them are kind of tweaking around and building the pockets of transaction capability within the base combined with those larger -- kind of those larger wins then -- and it's those larger wins that will take us out over multiple periods. And so that gives us some confidence in the momentum that I mentioned going into '14.

Great, great. And just one follow up, on the Open deal, it sounds like you're doing a great job on the cost saves side. What year is the biggest impact -- your biggest impacted year from the costs saves. I'm kind of guessing it's probably next year because this year you probably got some solid savings but they've kind of transitioned through the year and next year is maybe the biggest impact?

I think it's really about equal between both. The first 2 years have the majority of the synergy benefit.

Cost.

Cost synergy.

Our next question comes from Darrin Peller with Barclays.

Just want to jump in on the bill pay side again. Obviously, the new additions are helping in this quarter's growth. First of all, I know there's more to come. I think you had mentioned last call that towards the end of the year, fourth quarter, there's another sizable deal, is that still on track? And then are there others that are in the pipeline that are similar?

Yes, so as of the first quarter, the end of the first quarter, only one of our larger transactions had gone live. And so now that's fully live and that was TD Bank, as we had mentioned. The remaining larger transactions have just started to go live, in fact, in July. And then we'll have a couple of more go live towards the end of the year. And then the Wells deal will go live in '14. So we're actually pretty early in the live dates of these larger transactions. Now keep in mind, these transactions go on slowly. They don't all jump in any one month. So it'll -- they'll anniversary over, call it, probably they'll feel like a 6-month run-on.

Yes, I was just going to ask about that. So once you actually bring it on -- I mean, obviously, the deal is done and everything is technologically set up to actually operate, but the transition of consumers using the actually product takes time, right? I mean, how long does it actually take do you think it -- until it peaks out?

It depends on what the bank wants to do because the banks will gate how they want to migrate their users over. Some of them will migrate them over a relatively short period of time, some of them may migrate them over a 3, 4-month period. It really does depend. And then the other element that's important to keep in mind is because, at least we believe our bill payment product is very differentiated, we tend to see when people move over to our product -- we tend to see people transact more, get more utility out of things like e-bill, our risk model and those kinds of benefits to the end user and so there is a level of take-up that happens even in the end users who have been using the product on a more frequent basis. So again, from my own hypothetical, I would say, 6-ish months from the time the last clients start to go live is probably a good way to think about it.

That's helpful. Just -- so to follow up on that, I mean is there any reason if you have that, the new business that just came on with TD and you have Wells coming on later, is there really any reason to think the Payments segment, which showed acceleration, isn't -- shouldn't accelerate a little further through the rest of this year?

Well, I mean you have -- if that were the only thing in the segment, that would be right. But you have, in the Payments segment, which is roughly a $2 billion revenue segment, you have a variety of different things that can moderate up and down in a quarter. But when we announced in the first quarter, we were very confident that we would see between 4% and 8% growth in the Payments segment for the remainder of the year. And it's hard for me to see how we would have gigantic swings in that just because of the recurring revenue. But I do think there could be some slight, slight swings on the margins that could happen. But on balance, we feel pretty good about where we are, given the performance in the second quarter and our visibility for the remainder of the year.

If I could just sneak in one last financial one in before I turn it back to the queue. On the financial -- on the free cash flow side, obviously, it's up pretty well year-to-date. Yet you're calling still for about I think 18% you said? Year-over-year growth is $6.55 plus for the year. What is the dynamic? I mean, obviously, it can be lumpy, but what's the dynamic in the second half of the year that would bring it down versus the first half?

There's a lot of changes that go on. I mean clearly we still need a strong second half, and we anticipate that. Generally, our second half free cash flow is fairly strong. If you look at last year, we generated roughly about $470 million of free cash flow in the second half of the year. So there's a lot of variability that impacts working capital, but our guidance is very strong from a standpoint of 18% increase in greater than -- from a free cash flow per share standpoint.

Our next question comes from Julio Quinteros with Goldman Sachs.

Just going back to the payments results themselves, the organic growth that you showed there. I'm trying to get my arms around just the thought about how much of it is now a function of the -- kind of the integrated approach that you guys take. So are you seeing an uptick because your mobile platform, your P2P platform and your bill payment platform, if you will, all come into the market at the same time in a more integrated fashion and finally, are getting more -- resonating either better with the FI clients or with the consumers. I'm just trying to get my arms around the driver itself and how much having sort of the integrated pieces now in front of you guys should be adding to the growth profile overall.

Yes, I mean clearly, we have seen over the last couple of years, we've seen more than 100% growth in the mobile channel for something like bill payment. So I mean, I do believe the channel access, how we've gotten the products integrated are clearly contributing to the growth that we're seeing in the market or in the product, in the bill payment product. We, obviously, have P2P, which I think had 84%, 85%-ish growth. Obviously, that's on a small transaction base. But as you know, Julio, over time, right, that's going to grow and we fundamentally believe that space is conceptually as big as bill pay, if not bigger. Now that will take years to get there, but you've got that -- you've got a variety of different factors that are adding in to driving. You've got the continuing push on debit, the number of client wins that we're having. And we also are having kind of -- remember, in our Payments segment, we have our channels business and so we're seeing a lot of growth. I think the number of subscribers through our ASP mobile solution is up 3x over where it was last year. So -- and those people we are exposing, P2P and bill payment and mobile capture and those kinds of technologies, all of which are driving transactions in the Payments segment. So yes, we think we have an embedded advantage due to the integration. We also think people are actually still figuring it out -- how they're going to operate there. So all of that is conspiring to help us along with these big -- the bigger clients that we have won over the last few years.

Yes, I think that really does change a little bit the dynamic that in some ways where, historically, we would be looking at something like, is debit volume growing and how do we think about that tracing back. So for you guys, if these smaller areas are the ones -- you, obviously, revenue contributions are relatively small but if they continue to ramp then some of those metrics, I guess, would be the ones that we see, at least publicly, would be probably a little bit less relevant. Would you sort of agree that maybe thinking about what mobile volume could be doing and what P2P could be doing in some of these other -- even some of the mobile capture components could mean to overall growth kind of longer-term as well?

Yes, I mean, I do think the lag effect, right? Even think about take -- jump on to your debit example for a minute. I mean we're still growing somewhere between 300 and 500 basis points faster than the market because of that lag right into the 6,000 community-oriented, call it, the $30 billion and less banks, right? So we are the -- we're going to, we think, continue to be the beneficiary because you've got more ramp-up going on in that space and we're winning at a much higher rate than most. So I would expect that exact phenomena to exist. We've seen it in the bill payment area, right? So our bill payment transactions in the smaller end of the market are growing very, very fast relative to the overall market. And so we would expect to see that in all of these different spaces with the exception of P2P. Because we really are the financial institution-centric market leader, we would probably lead the market there as opposed to lag.

Got it. And then just last, any major efforts or thoughts around ACH as an alternative, especially in the mobile world where merchants seem to be very focused on the arbitrage, a way of interchange. Do you guys sort of see that as being a credible alternative that merchants would actually want to move more aggressively on especially as they consider some of the digital wallet offerings that might be out there, tying it back more directly to ACH.

Yes, so we are doing a lot of work. As you probably know, Julio, we own PEP+, right, so kind of the ACH standard across the U.S. We're doing a lot of work now and it really developed, we think, leading technology in that area that will allow financial institutions to move ACH as we kind of work through the risk side of it, move ACH on a realtime basis. So as that moves into the market, I do think there are opportunities there. From our perspective, we're probably more focused on the financial institution side. We view ourselves as being very issuer-centric and therefore, that's really where our focus is. But we are, obviously, paying a lot of attention on what's going on in the market, with merchants and, frankly, the battle that's occurring between issuers and merchants. So we do think ACH -- in fact, we're very confident ACH will play a role in there. It's just what does that role look like and how does that evolve? Eric mentioned Investor Day -- I actually think this is one of the areas that we'll want to talk about at Investor Day because we do think the whole notion of realtime, as we laid out a couple of years ago, as it's evolving and how the pieces come together, we think we're very well positioned to take advantage of those new opportunities.

Our next question comes from Brett Huff with Stephens.

I have sort of a question on just general monetization updates of some of your growth products, and most of my questions have been answered but I just want to ask, can you just give us updated thoughts on how the monetization, not necessarily the penetration, but the monetization of Mobiliti happens? And also how the peer-to-peer, kind of what are those business models evolving as your FI partners?

Yes, Brett, this is Mark Ernst. I'll try to cover some of that. Fundamentally, we have a model that principally pays us based on consumer adoption. So as we get a little bit of fee for people -- from financial institutions as they bring both those products into their portfolio of offerings, but for the most part, we are partners with our financial institution clients as they bring -- as they get more consumer penetration into those offerings. We, through our ASP and our pricing as an ASP, we benefit alongside of them. So as those things get more penetration over time, we think that we will see nice growth in revenues to go along with it.

Yes, and I think the other aspect of that is how these services end up getting priced at the financial institution market. So right now, we see some financial institutions who are charging for mobile capture. We know financial institutions will charge for realtime P2P. We see that there are opportunities potentially to actually have financial institutions charge for mobile capture with realtime or immediate funds availability. So there are a variety of derivatives that are going on out there. And to the extent that our products and services are best aligned with the economic incentives, i.e. revenue and earnings at the financial institution level, I think we'll see a much larger push, as Mark said on the consumer adoption -- a consumer adoption element of that.

Our next question comes from Glenn Greene with Oppenheimer.

First, just a couple of number questions and, Tom, you may have alluded to this but could you talk a little bit a little more color on the payments margin strength? And sort of the -- in the context of -- part of it, I'm sure, is the revenue growth, but the incremental profits were even higher than your incremental revenue from a Q-to-Q perspective. So just looking if there was -- just for a better explanation for why that margin strength both Q-to-Q and year-over-year?

Yes, I think the drop through, especially on a year-over-year basis, was very strong. But I think, Glenn, it's really the high-quality revenue growth that we've been talking about strategically for a number of different years, for the last couple of years and that coming to fruition. We have very strong businesses of scale, both in card services, which is our debit processing business, our bill pay business, et cetera. And it's really a culmination of those from that standpoint. As you know, our Operational Effectiveness initiatives continued to be strong, and that's really the primary drivers.

I would say the other thing is, we've been making fairly sizable investments in our channels businesses with specifically in something like mobile ASP. And as those revenues come on, we have the opportunity to recoup the investments that we make in prior years. And so again, even -- not just the scale businesses, but we would still view mobile as a subscale business, but that's really on an absolute basis, not on an incremental basis.

Okay. And then just, Tom, on the financial side, the uptick on the organic was partly you said year-over-year's license revenue growth? Any way you could help us directionally quantify that either the increase in the license revenue or how much it contributed to the organic revenue growth?

Yes, excluding Open Solutions, so on the Financial segment, license revenue in the quarter was up about $9 million, which is roughly about a 2% positive impact on organic growth in the Financial segment in the quarter. And it didn't really impact the Payments segment because, as Jeff highlighted earlier, most of that is recurring revenue.

Okay. And then just a clarification, you said that you had 5, I think you said the 5 DNA sales wins in the quarter. Were those competitive takeaways? Just want to be clear on that.

There were some competitive takeaways, and there were some kind of within the Fiserv family moving -- making a choice to move to the DNA platform.

Yes. And Glenn, just one more note on the license fees, on a year-to-date basis, it's about flat compared to the prior year, up a couple of million dollars. Just so you have that.

Our next question comes from Chris Fidyk with Findlay Park.

Very quickly, is it possible for you to talk about the tax benefits that you may realize from the Open Solutions acquisition? Are you realizing them? If you are not, when will you? And is it possible to sort of quantify what they might be next year? And the second one is I'm not sure you mentioned this, but are you sort of at a comfortable leverage ratio at this point in time? You, obviously, repurchased a lot stock. I just want to understand where you are from kind of a credit rating point of view.

Yes, Chris, I'll take that. So I think from a -- the NOL that we acquired in conjunction with the Open Solutions acquisition, that deferred tax asset is going to roll in over the -- and we're getting that benefit right now. But that's going to be rolling in pretty consistently over the next 4 to 5 years. And so that benefit is rolled kind of into our cash flow. It does not go through our income statement because it's set up in purchase accounting. So we'll continue to see that. It's rolled in right now, and it will continue to be in here for about the next 5 to 6 years on a pretty consistent basis. And so that is -- that's from that standpoint. And your second question again?

Leverage.

On the leverage side, we're at about 2.6x, and our target is between 2 and 2.5. And we've typically been at a little bit of the higher end of that range. So we'll continue to allocate our capital. As you know, we bought back more stock in the second quarter, share repurchase is our capital allocation benchmark. Then we'll pay down a little bit more debt.

Our next question comes from Ramsey El-Assal with Jefferies.

On the strong sales performance this quarter, have you guys made any adjustments to your sales strategy or your organization? Or is it really just more reflective of a pretty robust sort of end demand environment?

It is. I mean a few years ago, we actually made a pretty large change to our organization structure of moving our sales organization -- moving into a single sales organization with very, obviously, very strong tiebacks to the businesses. And I think we're getting -- we're seeing some of those benefits. We've begun to see those benefits over the last couple of years, and I think that, that will continue. But I think the lion's share of it is around the fact that we have a really great sales force that's out there, knocking on doors and really pushing the value that we've created, the unique value propositions around integration and innovation, and they're doing a great job selling the products that our businesses has built. So, and I guess it would be demand and personal stick-to-it-iveness.

Okay. So another question on the Popmoney realtime, I know that it's not rolled out widely. I know you mentioned PNC only. But any super preliminary read on consumer uptake or consumer usage of the realtime versus the non-realtime? Has that kind of -- has what you've seen far matched up with your expectations?

Yes, unfortunately, even PNC won't be live until later in the year, I think in the beginning of the fourth quarter. So we don't have -- beyond research, we don't have any real live in-market proof points yet. But we are pretty bullish about how the P2P experience changes when you integrate realtime. But we'll be able to talk about that in more detail come first quarter of '14.

Okay, all right. And then one last one. It seems like the electronic bill pay, the kind of central competitive matchup is really between kind of consolidated bill pay, like a model like yours versus a direct model where you can go to a merchant website or a mobile app or other channels where a consumer can pay directly. And I think the direct version is -- represents the majority of the market at this point. How do you go about capturing more share from the direct billers? And I guess what impact do you think mobile will have on that consolidated versus direct kind of competitive landscape?

Sure. From a perspective of market, as I recall, it's about 50-50. It might be 51, 49, it kind of shifts sometimes as between consolidator and biller direct. There is, I think most importantly, whether it's biller direct or consolidator, as a model, the lion's share, the substantial majority of bills are still not electronic. So there's a lot of room to grow on both sides of that value proposition. From our perspective, I actually think mobile will go a long way. The mobile and the combination of mobile and P2P will go a long way into bringing a large cross-section of consumers into the electronic bill payment consolidator space that we have not had access to historically. And so we're pretty excited about how that product will roll out. And as we've shared before, we have been in a place where P2P, the majority of P2P right now is actually not person-to-person transactions per se. It is, in fact, for a different subset of consumers to pay their bills electronically. So it tells me that there is a -- still a lot of runway on the consolidator side. Just one last point I would make, I mean as it relates to the Fiserv business, we have a very large business where we actually facilitate biller direct payments. Biller direct -- so we host those payment services across many of the larger billers in the U.S. today. And that allows us to, not only have access to the non-consolidator side of the market as it relates to the payment itself, but also very importantly, to distribute that bill back into the consolidator population for the nearly half of the population who prefers to pay in that fashion. Fundamentally, we believe that payments are a reflex action to some kind of a request for money. And so we're very focused on what are those different ways we can aggregate all of those requests and drop them into the consolidator site so that you can make it easy to pay bills in that fashion. We think one of the value propositions that drives biller direct is that you don't have to know how much you owe to go pay it. So how can we bring that content, make it available at the consolidator, we think, is a really interesting strategic question, probably not one that we can finish in the next couple of minutes, but it's pretty -- it's a great question and we think we're -- we're very excited about the opportunities because of where we play in that landscape.

Our next question comes from Ashwin Shirvaikar with Citi.

So I may have missed this, apologize if I did. But you guys said you'd exceed the $50 million and $75 million synergy targets. I may missed where you would go to with the synergy targets.

You didn't miss it because we haven't yet published it. We're still working on it. We're highly confident that we're going to be above, and we expect at Investor Day we'll give an update on where we are with Open Solutions, including our new cuts at the synergies.

Okay, got it. And I guess one question on Acumen. When you had Acumen and you were successful selling it to the market but the implementations were kind of really spread out for a couple of years. And now as you transition some of these clients to DNA, is there a near-term revenue pull-in opportunity? Is that happening in terms of the implementations coming in -- happening faster? So maybe there was a 2014, late 2014 revenue that gets pulled into 2013 or something like that?

There's not -- this is Mark Ernst. So there's not a lot of big -- a lot of impact on 2013. There's -- we are working hard within Open, the Open organization to kind of build out the -- integrate the implementation teams to take on what we both can see and expect will be a continued acceleration in DNA sales. We have been working really hard in building out that capability. That may lead to some incremental kind of revenue pull-in in 2014 and 2015 that we might have seen otherwise with Acumen. But that will probably be more than offset by the acceleration that we're seeing in sales interest in DNA overall.

Got it, okay, okay. Just to kind of -- a couple of numbers questions. As I think of 3Q versus 4Q, should we expect that to be a little bit more back-end loaded than usual because you have these ramps coming up?

I don't know that I would say more back-end loaded than usual. I think our take for where we can see things right now is we had a little bit of incremental benefit in the second quarter, as Tom referenced, around some of the license revenue and the Financial segment at least as we might project out. And then in the fourth quarter last year, we always -- or the fourth quarter every year, Ashwin, as you know, have seasonality in a couple of our businesses, and we had a pretty easy compare, right? The third quarter, the organic revenue growth in the last year's Q3 was much better than it was in Q4. So on a comparative basis, I think you've got those drivers. But again, as we talked about earlier, if you're thinking a little bit more about the Payments segment, we do think that will continue to see ramping to your point.

Got it. And last question [indiscernible]. Tom, could you remind us of the sensitivity to interest rate in [indiscernible]. I think there may be in the CheckFree business?

Yes, we're pretty well -- I mean we're -- we don't have a lot of float revenue income today. And so clearly, we have a portfolio there that's not earning a lot from that standpoint. So that's upside over the next several years to the extent we have interest rates that get back to normal levels.

Any way to quantify that?

Right now, I think I don't want to do that at this point in time. But I think initially, when we purchased CheckFree, I think they were probably -- had around $40 million of kind of float income at that particular time.

Our last question comes from Chris Shutler with William Blair.

So first, just a cleanup question. What were the term fees in the quarter?

Term fees overall, excluding Open Solutions, they were flat with the prior quarter. And actually, on a year-to-date basis, they're actually down about $5 million. So it was a negative impact to internal revenue growth on a year-to-date basis.

Okay, got you. And then I wanted to clarify on the commentary around a slight bias towards Q4. So you're talking about both internal revenue growth that the rate and adjusted earnings being -- showing [ph] improvement from here into Q3 and then also into Q4?

We were really talking about internal revenue growth.

Internal revenue growth, okay. And then last one, Jeff, I know in the prepared remarks you talked about expectations around tech spending not really changing despite the environment in interest rates at least at the long end of the curve somewhat improving here. So recognizing we've only been in this new environment for a couple of months, just curious what you think will be the tipping point towards FIs maybe willing up to open their wallets a little bit more going forward?

Yes, I mean I think -- I do think -- I mean, tech spend is probably, this year, will end up being somewhere between 30% and 40% of what it was in 2007 on kind of average level of growth per year. And I think -- I don't believe that it's necessarily sustainable, and I think there has been a lot of people have not been spending. So I do think we'll see it increase. But there is, I think, little possibility that people will allow tech spend to get ahead of what actually happens around rates and how that -- those rates actually translate to more net income for the financial institutions. I think they're going to -- I think people are going to sit on the sidelines a bit. Yes, they're going to feel more optimistic, but I don't think anyone is going to spend ahead of seeing what falls through to the bottom line. But that said, it's -- the market is far more optimistic right now than they were at the same time last year. You may remember last year that people started out strong and really fell off a cliff a bit. We're not seeing that, and that's why my commentary was really about Q1 outlook to Q2 outlook just in terms of, call it, a temperature index as opposed to anything else. All right, thank you. And thanks, everyone, for joining us. We obvious -- always appreciate your support. If you have any further questions, please don't hesitate to contact our Investor Relations team. Have a great day.

Thank you. That does conclude today's conference. Thank you for your participation, and you may disconnect at this time.