Item 1. Business

Overview

We provide integrated information management systems and services, including transaction processing, electronic commerce products and services, business process outsourcing, document distribution services, and software and systems solutions. We serve more than 18,000 clients worldwide, including banks, credit unions, financial planners and investment advisers, insurance companies and agents, leasing companies, lenders, savings institutions, retailers and merchants, government bodies, and publicly and privately owned companies. We operate centers in the United States for full-service financial data processing, software system development, item processing and check imaging, technology support and related businesses. Our operations are principally located in the United States. In 2007, our international operations contributed approximately 5% of total revenues from Argentina, Australia, Canada, China, Colombia, Costa Rica, France, India, Indonesia, Luxembourg, Malaysia, Mexico, the Netherlands, the Philippines, Puerto Rico, Poland, Singapore and the United Kingdom.

We were formed through the combination of two major regional data processing firms that began as the data processing operations of their parent financial institutions. Since we began, we have grown by developing highly specialized services and product enhancements, adding new clients, and acquiring businesses that complement ours. We originally incorporated in Delaware in 1984, and reincorporated as a Wisconsin corporation in 1992. Our headquarters are located at 255 Fiserv Drive, Brookfield, Wisconsin 53045, and our telephone number is (262) 879-5000.

Recent Developments

In December 2007, we acquired CheckFree Corporation (“CheckFree”), a leader in electronic commerce services and products, including electronic bill payment and Internet banking, for approximately $4.4 billion in cash and sold CredStar, a mortgage credit reporting unit. In the first quarter of 2008, we sold Fiserv Health, Inc. (“Fiserv Health”) to UnitedHealthcare Services, Inc. for $721 million in cash, which amount includes initial

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adjustments for net working capital and certain indebtedness of Fiserv Health and its subsidiaries as of the closing, and we sold the majority of our Fiserv Investment Support Services business (“Fiserv ISS”) to TD Ameritrade Online Holdings, Inc. for $225 million in cash at closing, plus the amount of acquired regulatory capital. The second part of the Fiserv ISS sale, to Robert Beriault Holdings, Inc., is expected to close by the end of the second quarter of 2008. We also sold Del Mar Database, a provider of loan broker management products, in the first quarter of 2008.

The Markets We Serve

Our operations are classified into three business segments: our financial institution services business segment (our “Financial” segment); our insurance services business segment (our “Insurance” segment); and our CheckFree business segment (our “CheckFree” segment). The businesses that make up our Financial segment provide account and transaction processing systems and services to financial institutions, such as banks, thrifts and credit unions, and other financial intermediaries. The businesses that comprise our Insurance segment provide a wide range of services to insurance carriers, agents, and distributors. The businesses that comprise our CheckFree segment provide online banking, electronic billing and payment, software applications and investment management solutions to financial institutions and financial services organizations. CheckFree is presented as a separate segment because it was acquired on December 3, 2007. In the first quarter of 2008, we expect that we will realign our business segments when our new reporting structure and CheckFree integration plans are finalized.

Financial

The market for products and services offered by financial institutions undergoes continuous change. The financial industry regularly introduces and implements new lending, investment, deposit, and payment products. The distinctions among financial services traditionally offered by banking, thrift and credit union organizations as well as by insurance and securities firms continue to narrow, as traditionally different entities seek to serve the same ultimate customers. In addition, financial institutions continue to consolidate in response to market and regulatory pressures.

Although the number of financial institutions in the United States has been reduced, consolidation has not resulted in a material reduction of the number of customers or financial accounts serviced by the financial industry as a whole. In addition, to stay competitive, financial institutions seek to provide customers with new products and services which are typically transaction-oriented and fee-based. Accordingly, we believe that the financial services industry is one of the largest users of information technology products and services. The growing volume and types of transactions, accounts and payment mechanisms have increased the data processing and other service needs of financial institutions, and we believe that these institutions will continue to require: significant commitments of capital and human resources for information systems; more specialized systems; and development, maintenance and enhancement of applications software. We believe that economies of scale in data processing operations are essential to justify the required level of expenditures and commitment of human resources.

We provide financial institutions with outsource services or with software to run operations internally. Many financial institutions that previously developed their own software systems and maintained their own data processing operations have outsourced their data processing requirements by licensing software from third-parties or by contracting with third-party processors to reduce costs and enhance their products and services. Outsourcing can involve the licensing of software, which eliminates the need for costly technical expertise within a financial institution, or the utilization of service bureaus, facilities management or resource management capabilities. Within the Financial segment, we provide banks, thrifts and credit unions with account, item, lending, and payment processing services and other products to support numerous types of financial transactions and risk management solutions.

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Insurance

The insurance industry, like other industries that we serve, has requirements for basic administration services and information processing systems. We provide policy administration, rating, claims administration, billing and reinsurance administration services to insurance carriers, agents, and distributors. Our clients face increasing competition and seek to use information technology to provide better service to their customers as well as to control the costs of their operations. In addition, commoditization of products and cyclical market conditions put pressure on our clients to distinguish their products and services. Accordingly, we believe there is a significant and increasing need for information technology and related service solutions in the markets that we serve.

CheckFree

We believe CheckFree brings us complementary technology, services, and clients. An important objective of the integration process is to join CheckFree’s Internet banking and electronic bill payment and settlement capabilities with our core account processing and risk management solutions to create a compelling value proposition for clients. CheckFree’s electronic commerce business serves 21 of the top 25 financial institutions in the United States and processes more than one billion transactions per year. We believe we will be able to expand our existing relationships and grow our presence with these top-tier financial institutions. Similarly, we believe there is a significant opportunity to deploy CheckFree’s electronic bill payment solutions within our sizable client base. Together with CheckFree, our solutions address a range of technology needs for the financial services industry, including: core bank processing services, Internet banking, electronic billing and payment and fraud and risk management capabilities, cash and logistics management and Automated Clearing House (“ACH”) services, check imaging and the leading technology platform for managed accounts. As a result, we believe the combined organization will deliver a wider range of products and services to clients, creating new opportunities for growth and enhanced efficiency, including the ability to bring new solutions to market faster.

Our Strategy

Our mission is to be a global leader in transaction-based technology solutions that provides integrated technology and services solutions to enable best-in-class results for our clients. To meet this goal, we are implementing a series of strategic initiatives that we refer to as “Fiserv 2.0.” We are focused on operating businesses where we have: deep industry expertise that enables us to serve the market with high effectiveness; a strong competitive position, currently or via a clear path in the foreseeable future; long-term, trusted, ongoing client relationships which are not based on one-time transactions; differentiated solutions that deliver higher-than-normal value to our clients through integration and innovation; and strong management to execute strategies in a disciplined manner. Consistent with this focus, we are implementing the following strategic initiatives:

Enhanced Client Relationship Value . We plan to extend and grow our existing client relationships by, among other matters, implementing tighter integration across our product and services groups, bundling more products and services to deliver improved value propositions, and streamlining our service and support processes.

Acquisitions . We expect to acquire businesses when we identify: a compelling strategic need, such as a product, service or technology that helps fill a specific market requirement; an opportunity to change market dynamics; a way to achieve business scale; or a similar consideration.

Innovation . We seek to become innovation leaders in our key markets, leveraging our assets and capabilities to be at the forefront of our markets. We expect to explore these opportunities both domestically and abroad.

Operational Excellence . We believe we can improve our performance by using the opportunities created by our size and scale. For example, we expect to improve our performance by more effectively using our consolidated buying power and shared utility structures to provide savings.

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Greater Capital Discipline . Finally, we intend to make capital allocation decisions based on investments that offer the best prospects for long-term growth and profitability for our company taken as a whole. These investments may include, among other matters, repurchases of our own shares, capital improvements or acquisitions.

Our acquisition of CheckFree furthers our Fiserv 2.0 mission by making CheckFree’s industry leading Internet banking, electronic billing and payment, and software technologies available to our clients. We have the opportunity to integrate these capabilities into our core offerings to make it easier for our clients to take advantage of ever-changing market opportunities and deliver new or enhanced services to their customers.

Acquisitions and Dispositions

Acquisitions

In 2007, we acquired the following four businesses with combined annual revenues of more than $1.2 billion and approximately 4,600 employees:

Dispositions

In the fourth quarter of 2007, we sold CredStar, a mortgage credit reporting unit. In the first quarter of 2008, we sold Fiserv Health to UnitedHealthcare Services, Inc. and we sold the majority of our Fiserv ISS business to TD Ameritrade Online Holdings, Inc. We also sold Del Mar Database, a provider of loan broker management products, in the first quarter of 2008. In 2007, these businesses had combined annual revenues of $1.1 billion.

Principal Solutions and Services

Our operations are classified into three business segments: our Financial segment; our Insurance segment; and our CheckFree segment. Financial information regarding our business segments is included in Note 8 to the consolidated financial statements on page 60.

Financial

We provide products and services that meet the financial technology needs of more than 9,000 financial institutions, including banks, credit unions, leasing and finance companies and savings institutions. Many of the products and services that we provide are sold as an integrated solution to our clients, and may include core processing, lending and item processing, payments processing and a variety of industry products and service solutions.

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Core Processing

We provide “core” systems that integrate account servicing and management information functions for our bank, thrift and credit union clients, as well as ancillary, value-added products and services that complement our core solutions. Core solutions include systems to process various customer deposit and loan accounts, an institution’s general ledgers, central information files and other financial information. They also include the extensive security, report generation and other features that financial institutions need to process transactions for their depositors and other customers, as well as to meet their regulatory compliance requirements and their own management information needs. Core solutions are offered through on-line data transmission connections to our data processing centers, often called “service bureaus,” or as stand-alone, in-house licensed software for installation on client-owned computer systems.

While many of our clients contract to obtain all or a majority of their data processing requirements from us, the modular design of many of our service bureau and software solutions allows clients to start with one application, such as a deposit system, and, as needed, add applications and features developed by us and third parties. We support a broad range of terminals and other client-owned peripheral devices manufactured by a variety of vendors. This support capability reduces our clients’ initial conversion expenses, enhances existing clients’ ability to change equipment and broadens our market.

Lending and Item Processing Solutions

We also offer lending and global item processing solutions to financial institutions and other financial intermediaries. The products and services that we offer include item processing and imaging systems for the item processing needs of core clients, the Fiserv Clearing Network that allows clients to more cost effectively clear both paper and imaged checks “in network” and via external clearing options such as the Federal Reserve, and treasury and investment management systems. We offer a wide array of solutions through our lending businesses, including: valuation services, portfolio analytical services and real estate settlement services; automotive loan origination systems, lease and loan servicing products, and business process outsourcing services; and a premier mortgage loan servicing platform and mortgage loan origination and tracking systems.

Payments and Financial Industry Products

We provide a number of products and services that can be used in payments businesses as well as risk management solutions and other industry products and services. Our products and services facilitate a range of financial transactions for a diverse group of clients which include traditional financial institutions, such as banks, thrifts and credit unions, and the financial departments of retailers and others. Our products and services allow our clients to offer a variety of services to their customers, including home banking, automated teller machine (ATM) access and other treasury and related services of varying complexity and sophistication, such as asset-liability modeling and cash management. Specifically, we offer solutions that allow our clients to offer the electronic funds transfer services of Fiserv EFT, which include the ACCEL network, debit card processing, and related ATM access services. We also provide expedited bill payment services through BillMatrix.

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We also offer complementary and add-on products and services that enhance our core solutions, including a series of treasury management solutions marketed under our BANKLINK ^® brand; the FIP suite of software, including IntelligEnt call center systems and InformEnt data warehouse enterprise content management, fraud detection, and image archive systems; IPS-Sendero enterprise risk management and performance measurement systems (including SVAL, Vantage, Prologue, and Advantage); Interactive Technologies’ fee management and billing software; and electronic document management systems and services using our EPSIIA suite of software. Our Personix business provides clients with document management and distribution products and services, including plastic card manufacturing, personalization and mailing, statement production and mailing, and high-value direct mail solutions, including design and fulfillment. We offer these product and service solutions through multiple delivery channels primarily in the United States.

Finally, one of our newest acquisitions, NetEconomy, is a leading provider of financial crime management and compliance solutions, including anti-money laundering, fraud prevention, market surveillance and employee fraud detection solutions. We offer our software to major financial institutions around the globe as an enhancement to our core products.

Insurance

The insurance industry, like other industries that we serve, has requirements for fundamental administration services and information processing systems. Insurance carriers, health plans, agents, and distributors rely on us for policy, rating, claims, billing and reinsurance administration, as well as for compliance, education and marketing support. We provide services and solutions to more than 2,500 insurance companies and more than 5,000 agencies and brokerages.

Workers’ Compensation . We are a leading provider of transaction processing and administration services to the workers’ compensation industry. We assist carriers, state funds, payers, employers and pharmacies to respond to the complex regulatory and transaction processing environment by providing them with the experience, technology and resources: to manage workers’ compensation policy acquisition, rating, underwriting, and administration; to process bills and payments; and to manage claims. We also provide: a payer-provider network to expedite workers’ compensation prescription delivery; billing and payment assurance services to pharmacies; technology-focused pharmacy claims administration services for payers and employers; and Internet-based solutions for efficient, cost-effective electronic communications between workers’ compensation medical providers and payers.

Property and Casualty; Flood . Our clients are property and casualty insurance companies, agents and brokers which provide personal and commercial property and casualty insurance to businesses and consumers. We provide technology and services to our clients to enable them to: process applications; rate, quote, underwrite and issue policies; bill premiums and collect payments; process claims; comply with regulatory requirements; and report results. We are also the largest third party administrator of flood insurance policies and claims in the United States. We provide support for all functions, including agent and policyholder service, rating and policy issuance, billing and remittance, and claims management and processing.

Life and Annuity . Our clients in the life insurance market are insurance companies, agents and brokers which provide life insurance and annuities for individuals. We provide our clients with technology and related services to enable them: to license and educate agents and brokers; to market products; to process applications; to rate, quote, underwrite and issue policies; to bill premiums and collect payments; to comply with regulatory requirements; and to report results. Because of the ongoing need for new business generation in this market and significantly changing demographics, there is a proliferation of new products in this area. As a result, we expect to experience increased demand for technology and related services that are required to support new products, as well as to maintain service for previously issued products.

Healthcare Banking and Payments . We provide application software solutions to the consumer-directed healthcare industry. Consumer-directed healthcare plans place a greater emphasis on consumer or plan member

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involvement. For example, high-deductible health plans allow plan members to establish a health savings account with a financial institution to pay qualifying healthcare expenses. We offer our products to health plans that are seeking to meet customer demand for consumer-directed health plans, but which are unable to administer such plans on existing claims administration systems. The main function of our software, which is integrated with a client’s existing system, is to allocate healthcare claims to the multiple accounts, such as health savings accounts, flexible spending accounts and health reimbursement arrangements, involved in a consumer directed health plan and to track the balances of such accounts. Our system is also designed to integrate with multiple banking platforms and payment mechanisms, such as debit cards.

CheckFree

We provide financial electronic commerce products through our electronic commerce, software and investment services businesses. We enable consumers to review bank accounts and to receive and pay bills electronically. In 2007, CheckFree processed more than 1.4 billion payment transactions and delivered approximately 250 million electronic bills (“e-bills”). We also offer software, maintenance, support and consulting services primarily to large global financial service providers and other companies as well as a range of portfolio management services to financial institutions.

Electronic Commerce

We believe that consumers will continue to move their financial transactions from traditional paper-based methods to electronic methods if they have an easy-to-access, easy-to-use, secure and cost-effective method for reviewing bank accounts and receiving and paying their bills electronically. Consumers using our services access CheckFree’s system primarily through a financial institution’s Internet portal. Consumers can also access our system through CheckFree hosted biller direct sites, such as www.mycheckfree.com, a network of retail agents for walk-in bill payments, known as CheckFreePay ^TM , or by phone on a hosted interactive voice response (IVR) system, known as CheckFree Pay-by-Phone ^TM . This allows the customers of our clients to pay their bills wherever they feel most comfortable.

Financial institutions can offer our bill payment services to consumers either through a hosted application, known as CheckFree Web ^SM , or through various protocols that link online banking applications to our Genesis billing and payment system. The vast majority of payment transactions are processed using our Genesis platform, enabling us to improve our economies of scale. Once a consumer has accessed the system through a financial institution, he or she can elect to pay an electronic bill delivered by us or can instruct the system to pay any individual or company within the United States. We complete this payment request either electronically, using the Federal Reserve’s ACH network or other electronic methods such as MasterCard RPPS service or Visa ePay, or by issuing a paper check or draft. In 2007, CheckFree completed 83% of these payments electronically. Electronic payments are more efficient than paper statements, less expensive to process, and result in fewer errors and customer inquiries.

Corillian Voyager ^TM is a software platform upon which we have built a number of software applications to support multiple lines of banking businesses. It has been designed to be highly scalable, using universal standards, to meet the evolving needs of our clients. This structure enables our clients to deploy new Internet-based financial services by adding applications to our platform at any time and by integrating future applications to any Internet connected point-of-presence.

We also offer a number of other applications that can be used across lines of business and a variety of professional services designed to meet our clients’ needs throughout the process of product design, implementation and operation.

Software

We provide software, maintenance, support and consulting services primarily to large global financial service providers and other companies to support their ACH, account reconciliation, compliance, check and

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remittance payment processing, fraud and risk management and cash logistics needs. We generally grant non-exclusive, non-transferable perpetual licenses to use our application software. Clients who request maintenance service generally receive product support, corrective fixes and product enhancements. We also offer consulting services. We provide software and services through a variety of product lines, including:

Investment Services

We provide a range of technology platforms to help approximately 350 financial institutions, including broker dealers, money managers, investment advisors, banks and insurance companies, deliver portfolio management, enhanced trading solutions, performance measurement, reporting services and corporate actions and trading automation to their clients. Our fee-based investment management clients are typically sponsors or managers of “wrap,” or separately managed accounts (“SMAs”) or unified managed accounts, money management products, or institutional money managers, managing investments of institutions and high net worth individuals. Revenues in our portfolio management hosted services are generated per portfolio under management through multiple year agreements that provide for monthly revenue on a volume basis. Revenue from our installed software is typically generated through multi-year or annual agreements, software license fees, maintenance fees and professional services. Our primary product is a real-time portfolio management system used by nine of the top 10 largest brokerage firms, based on assets under management, offering SMAs in the United States and eight of the top 10 largest asset managers offering SMAs. As of December 31, 2007, our clients used our platforms to manage nearly 2.9 million portfolios. We have introduced components of a new technology platform, CheckFree EPL ^SM (Enhanced Portfolio Lifecycle), to enhance the reliability, efficiency, business process workflow and usability of our portfolio management services.

Servicing the Market

Our mission is to provide integrated technology and services solutions that enable best-in-class results for our clients. This principle is backed by our dedication to providing excellent client service and support no matter what size our client is. The markets for our account and transaction processing services have specific needs and requirements, with strong emphasis placed by clients on software flexibility, product quality, service reliability,

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comprehensiveness and integration of product lines, timely introduction of new products and features, cost effectiveness and service excellence. Through our multiple product and service offerings, we believe that we successfully service the needs of our clients which range in size from start-ups to the largest financial services providers.

We offer clients a selection of information management and data processing services designed to meet the specific needs of the ever-changing financial services and insurance industries. We believe that our financial strength and primary focus on the financial services and insurance industries helps our business development, client service and product support teams remain responsive to the technology needs of our markets. In addition, we believe that our commitment of substantial resources to training and technical support helps us to retain clients. We conduct the majority of our new and ongoing client training in our technology centers, where we maintain fully equipped demonstration and training facilities that contain equipment used in the delivery of our services. In addition, we provide local and on-site training services, and many of our business units provide on-line education to clients.

Product Development

To meet the changing technology needs of our clients, we continually develop, maintain and enhance our systems. Product development expenses represented approximately 7%, 7% and 8% of our total revenues in 2007, 2006 and 2005, respectively. Our network of development and financial information technology centers apply the expertise of multiple teams to design, develop and maintain specialized processing systems around our multiple technology platforms. The applications of our account processing systems meet the preferences and diverse requirements of the various international, national, regional or local market-specific financial service environments of our clients. In developing our products, we stress interaction with and responsiveness to the needs of our clients, including customization of software to meet client needs. We have adopted web services and service-oriented architecture principles in our software development practices so that we and our clients can benefit from current technology. We have implemented a nationwide networking infrastructure among billers, consumers, retail agents and financial institutions, to pass transaction data among them and to complete electronic billing and payment transactions. We provide dedicated solutions that are designed, developed, maintained and enhanced according to each client’s goals for service quality, business development, asset and liability mix, and local market positioning as well as other user-defined parameters.

Intellectual Property

We regard our transaction processing services and related products and our software as proprietary and utilize a combination of patent, copyright, trade mark and trade secrecy laws, internal security practices and employee and third party non-disclosure agreements for protection. We believe that legal protection of our software, while important, is less significant than the knowledge and experience of our management and personnel and their ability to develop, enhance and market new products and services. The majority of our patents cover various electronic billing and/or payment innovations, other financial software products or services, or aspects of our separately managed accounts services. We believe that we possess all proprietary rights necessary to conduct our business.

Competition

Financial

The market for information technology products and services within the financial industry is highly competitive. Our principal competitors include internal data processing departments, data processing affiliates of large companies or large computer hardware manufacturers, independent computer service firms and processing centers owned and operated as user cooperatives. Some of these competitors possess substantially greater financial, sales and marketing resources than we do. Competition for in-house data processing and software

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departments is intensified by the efforts of computer hardware vendors which encourage the growth of internal data centers and consulting service providers who assist these departments with the design and implementation of customized software solutions.

Competitive factors for processing services include product quality, service reliability, product line comprehensiveness and integration, timely introduction of new products and features, and price. We believe that we compete favorably in each of these categories. In addition, we believe that our position as an independent vendor, rather than as a cooperative, an affiliate of a larger corporation or a hardware vendor, is a competitive advantage. We compete with vendors that offer similar transaction processing products and services to financial institutions and other financial intermediaries, including Fidelity National Information Services, Inc., Metavante Technologies, Inc., Jack Henry and Associates, Inc. and Open Solutions, Inc. There has been significant consolidation among providers of information technology products and services to financial institutions, and we believe this consolidation will continue in the future.

Insurance

The market for information technology products and services is highly competitive in the insurance market. We face competition from internal information technology departments, service affiliates of large companies, independent technology and service firms, education and licensing firms, and application and business processing outsourcers. We compete with information technology firms such as Accenture Ltd., CGI Group, Inc., Choicepoint, Inc., Computer Sciences Corporation, DST Systems, Inc., Electronic Data Systems Corp., International Business Machines Corporation, Insurance Services Office, Inc., Perot Systems Corporation, SunGard Data Systems, Inc., SAP AG, and Vertafore, Inc., which offer large-scale solutions application outsourcing, business process outsourcing and professional delivery. Some of these competitors possess substantially greater financial, sales and marketing resources than we do. We also compete with a number of local and regional firms which compete on the basis of their flexibility and local presence.

CheckFree

Our primary competition in the electronic commerce market is the traditional paper-based method of receiving and paying bills. In addition, the possibility of billers and financial institutions continuing to use or deciding to create in-house systems to handle their own electronic billing and payment transactions, and their own Internet banking solutions in the case of financial institutions, is a significant competitive threat. In-house solutions have been, and will continue to be, an option for our clients and a competitive factor facing our business.

Metavante Technologies, Inc. competes with us most directly from the perspective of providing “pay anyone” solutions to financial services organizations, and Online Resources Corporation competes with us from the perspective of a full service banking, billing and bill payment competitor. A number of other companies compete with us by providing some, but not all, of the services that make up our complete e-bill and electronic pay anyone service, including Yodlee, MasterCard International and Visa. In the area of Internet consumer banking, we primarily compete with other companies that provide outsourced Internet finance solutions to large financial institutions, including S1 Corporation, with companies that offer software platforms designed for internal development of Internet-based financial services software. We expect competition to continue to increase as new companies enter our markets and existing competitors expand their product lines and services. In addition, many companies that provide outsourced Internet finance solutions are consolidating, creating larger competitors with greater resources and broader product lines.

The CheckFree software business competes in several different market segments and geographies, including with large diversified computer software and service companies and independent suppliers of software products. Our investment services business competes primarily with providers of portfolio accounting software and outsourced services and with in-house solutions developed by large financial institutions.

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Government Regulation

Our data processing and electronic commerce subsidiaries are generally not directly subject to federal or state regulations specifically applicable to financial institutions such as banks, thrifts and credit unions. However, as a provider of services to these financial institutions, our data processing and electronic commerce operations are examined on a regular basis by the Federal Deposit Insurance Corporation, the Federal Reserve Bank, the National Credit Union Association, the Office of Thrift Supervision, the Office of the Comptroller of the Currency and various state regulatory authorities. Because we use the Federal Reserve’s ACH network to process many of our transactions, we are subject to the Federal Reserve Board’s rules with respect to its ACH network. In addition, independent auditors annually review many of our operations to provide internal control evaluations for our clients’ auditors and regulators.

In conducting our electronic commerce business, we are subject to various laws and regulations relating to the electronic movement of money. In 2001, the USA Patriot Act amended the Bank Secrecy Act (“BSA”) to expand the definition of money services businesses so that it may include businesses such as CheckFree. CheckFree submitted a request for an administrative ruling from the Financial Crimes Enforcement Network (“FinCEN”) in 2002 with respect to whether FinCEN believes CheckFree to be a money services business. To date, CheckFree has not received a ruling from FinCEN. If CheckFree’s business is determined to be a money services business, then CheckFree will have to register with FinCEN as a money services business and be regulated as such. Also, nearly all states and the District of Columbia have enacted statutes that require entities engaged in money transmission, the sale of traveler’s checks (including money orders) and the sale of stored value cards to register as a money transmitter with that jurisdiction’s banking department, and CheckFree has registered as a money transmitter where required. In addition, our electronic commerce business is subject to the regulations of the Office of Foreign Assets Control, the Gramm-Leach-Bliley Act and the electronic funds transfer rules embodied in Regulation E promulgated by the Federal Reserve Board.

Our walk-in bill payment service is considered a money services business and is registered with FinCEN. We have established and maintain a program to comply with the BSA and money laundering and anti-terrorism statutes and to provide a system of controls and procedures that we believe is reasonably designed to detect, prevent and report actual or suspected violations of the BSA and other illicit activity. In addition, we currently maintain 42 licenses to comply with the various money transmitter statutes mentioned above, and we are subject to annual audits by such jurisdictions.

The insurance markets in which we operate are principally regulated under state law. However, there is also significant federal legislation with which we or our clients may be required to comply, including the National Flood Insurance Program, the Fair Credit Reporting Act, the Employee Retirement Income Security Act, the Health Insurance Portability and Accountability Act and the Gramm-Leach-Bliley Act. From time to time, in order to comply with our obligations under state and federal laws, we may be required to comply with annual reporting and licensing requirements and to implement operating policies and procedures to protect, among other matters, the privacy and security of consumer information.

Employees

We have approximately 25,000 employees, many of whom are specialists in our information management centers and related product and service companies. This service support network includes employees with backgrounds in computer science and the financial and insurance industries, often complemented by management and other employees with direct experience in banks, credit unions, insurance companies and agencies, mortgage firms, savings institutions and other financial services environments. Our employees provide expertise in: sales and marketing; account management and client services; computer operations, network control and technical support; programming, software development, modification and maintenance; conversions and client training; business process outsourcing; item and mortgage processing; and financial planning and related support services.

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None of our employees in the United States are represented by a union. There have been no work stoppages, strikes or, to our knowledge, attempts to organize. The service nature of our business makes our employees an important corporate asset. Although the market for qualified personnel is competitive, we have not experienced significant difficulty with hiring or retaining our staff of top industry professionals. In assessing potential acquisition candidates, the quality and stability of the prospective company’s staff are emphasized.

Available Information

Our website address is www.fiserv.com. We are not including the information provided on our website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge (other than an investor’s own Internet access charges) through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission.

Item 1A. Risk Factors

You should carefully consider each of the risks described below, together with all of the other information contained in this Annual Report on Form 10-K, before making an investment decision with respect to our securities. If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially and adversely affected and you may lose all or part of your investment.

We operate in a competitive business environment, and if we are unable to compete effectively, our results of operations and financial condition may be adversely affected.

The market for our services is competitive. Our competitors vary in size and in the scope and breadth of the services they offer. Some of our competitors have substantial resources. Since many of our larger potential clients have historically developed their key applications in-house, we often compete against our potential clients’ in-house capacities. Our existing large clients may also explore the possibility of internally performing portions of the outsourced Internet banking and electronic billing and payment services that we provide to them. In addition, we expect that the markets in which we compete will continue to attract new competitors, including international providers of similar products and services which may have lower cost structures than ours. We cannot provide any assurance that we will be able to compete successfully against current or future competitors or that competitive pressures faced by us in the markets in which we operate will not materially and adversely affect our business, financial condition and results of operations.

If we fail to adapt our products and services to changes in technology or in the marketplace, or if our ongoing efforts to upgrade our technology are not successful, we could lose clients.

The markets for our products and services are characterized by constant technological changes, frequent introductions of new products and services and evolving industry standards. Our ability to enhance our current products and services and to develop and introduce new products and services that address the increasingly sophisticated needs of our clients and their customers will significantly affect our future success. We may not be successful in developing, marketing or selling new products and services that meet these changing demands. In addition, we may experience difficulties that could delay or prevent the successful development, introduction or marketing of these services, or our new services and their enhancements may not adequately meet the demands of the marketplace or achieve market acceptance. We continually engage in significant efforts to upgrade our applications. If we are unsuccessful in completing or gaining market acceptance of our upgrade efforts, it would likely have a material adverse effect on our ability to retain existing clients or attract new ones.

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The market for our electronic transaction services is evolving and may not continue to develop or grow rapidly enough to sustain profitability.

If the number of electronic transactions does not continue to grow or if consumers or businesses do not continue to adopt our services, it could have a material adverse effect on our business, financial condition and results of operations. We believe future growth in the electronic transactions market will be driven by the cost, ease-of-use, and quality of products and services offered to consumers and businesses. In order to consistently increase and maintain our profitability, consumers and businesses must continue to adopt our services. In addition, if we are unable to continue to decrease the cost of processing transactions, our margins could decrease, which could have a material adverse effect on our business, financial condition and results of operations.

Our electronic commerce business also relies on contracts with financial services organizations, businesses, billers, Internet portals and other third parties to provide branding for our electronic commerce services and to market our services to their customers. These contracts are an important source of the growth in demand for our electronic commerce products. If any of these third parties abandons, curtails or insufficiently increases its marketing efforts, it could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to renew client contracts at favorable terms, we could lose clients and our results of operations and financial condition may be adversely affected.

Failure to achieve favorable renewals of client contracts could negatively impact our business. Our contracts with our clients for core services generally run for a period of three to five years in our Financial segment and provide for termination fees upon early termination. Our contracts with financial services organizations for electronic commerce services generally provide for terms of two to five years. At the end of the contract term, clients have the opportunity to renegotiate their contracts with us and to consider whether to engage one of our competitors to provide products and services. If we are not successful in achieving high renewal rates with favorable terms, our revenues from such renewals and the associated earnings could be negatively impacted.

The integration of Fiserv and CheckFree may prove to be difficult and may strain our administrative, operational and financial resources.

Our acquisition of CheckFree is substantially larger than any of our previous acquisitions. The expansion of our business and operations resulting from the acquisition of CheckFree, including the differences in the strategies and infrastructures of our companies, may strain our administrative, operational and financial resources. The integration of Fiserv and CheckFree will require the time, effort, attention and dedication of management resources and may distract management from their other responsibilities. The integration process could create a number of potential challenges and adverse consequences, including the possible unexpected loss of key employees, clients or suppliers, a possible loss of sales, an increase in operating and other costs and the need to modify and integrate operating and accounting controls and procedures as well as information systems. We may have difficulty integrating CheckFree’s operations with our operations, including with respect to coordinating geographically separate organizations, coordinating marketing functions and consolidating corporate and administrative infrastructures. In addition, the integration of CheckFree may subject us to liabilities existing at CheckFree, some of which may be material or unknown. These types of challenges and uncertainties could have a material adverse effect on our business, cash flows, results of operations and financial condition.

We may not realize the expected benefits of the acquisition of CheckFree.

Our ability to realize the anticipated benefits of the acquisition will depend, in part, on our ability to successfully integrate the businesses of Fiserv and CheckFree, and we cannot assure you that the combination of the two companies will result in the realization of the anticipated economic, operational and other benefits from the acquisition within expected time frames or at all. In particular, we have estimated that we will be able to achieve annual cost savings of more than $100 million and annual revenue synergies of more than $125 million

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over the next several years as we integrate the CheckFree acquisition. Our ability to achieve those savings and synergies depends on a number of factors, some of which are beyond our control, and we will not be able to fully assess these opportunities until after the integration is complete. As a result, the integration of CheckFree may not generate expected revenue synergies, cross-selling opportunities or cost savings on the expected time frames or at all. If we are unable to successfully implement our planned integration with CheckFree and realize the expected benefits from the acquisition, our results of operations and cash flows could be adversely affected.

Our balance sheet includes significant amounts of goodwill and intangible assets. The impairment of a significant portion of these assets would negatively affect our financial results.

Our balance sheet includes goodwill and intangible assets that represent approximately 60% of our total assets at December 31, 2007. These assets consist primarily of goodwill and identified intangible assets associated with our acquisitions, including significant goodwill and intangible assets associated with our acquisition of CheckFree. On at least an annual basis, we assess whether there has been an impairment in the carrying value of goodwill and intangible assets. If the carrying value of the asset is determined to be impaired, then it is written down to fair value by a charge to operating earnings. Any determination resulting in the impairment of a significant portion of goodwill or intangible assets would negatively affect our results of operations and financial position, which could be material.

Increased leverage may harm our financial condition and results of operations.

As of December 31, 2007, we had approximately $5.4 billion of long-term debt, including current maturities. We and our subsidiaries may incur additional indebtedness in the future. Our current level of indebtedness and any future increase in our level of indebtedness could: increase our cash requirements to support the payment of interest; increase our vulnerability to adverse changes in general economic and industry conditions; decrease our ability to obtain additional financing for working capital, capital expenditures, general corporate or other purposes; limit our flexibility in planning for, or reacting to, changes in our business and our industry; and limit our flexibility to make acquisitions. Our ability to make payments of principal and interest on our indebtedness depends upon our future performance, which will be subject to general economic conditions and financial, business and other factors affecting our consolidated operations, many of which are beyond our control. If we are unable to generate sufficient cash flow from operations in the future to service our debt and meet our other cash requirements, we may be required, among other things: to seek additional financing in the debt or equity markets; to refinance or restructure all or a portion of our indebtedness; or to reduce or delay planned capital or operating expenditures. Such measures might not be sufficient to enable us to service our debt and meet our other cash requirements. In addition, any such financing, refinancing or sale of assets might not be available at all or on economically favorable terms.

Consolidation in the financial services industry could adversely affect our revenues by eliminating some of our existing and potential clients and could make us more dependent on a more limited number of clients.

There has been and continues to be merger, acquisition and consolidation activity in the financial services industry. Consolidations of financial institutions in the future could reduce the number of our clients and potential clients. If our clients merge with or are acquired by other entities that are not our clients, or that use fewer of our services, they may discontinue or reduce their use of our services. In addition, it is possible that the larger financial institutions resulting from mergers or consolidations could decide to perform internally some or all of the services that we currently provide or could provide. Any of these developments could have a material adverse effect on our business and results of operations.

Security breaches or computer viruses could harm our business by disrupting our delivery of services and damaging our reputation.

As part of our transaction processing businesses, we electronically receive, process, store and transmit sensitive business information of our clients and their customers. Unauthorized access to our computer systems

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could result in the theft or publication of confidential information or the deletion or modification of records or could otherwise cause interruptions in our operations. These concerns about security are increased when we transmit information over the Internet. Computer viruses have also been distributed and have rapidly spread over the Internet. Computer viruses could infiltrate our systems, disrupting our delivery of services and making our applications unavailable. Any inability to prevent security breaches or computer viruses could have a negative impact on our reputation, could expose us to liability, could decrease market acceptance of electronic transactions and could cause our present and potential clients to choose another service provider.

Operational failures in our outsourcing or transaction processing facilities could harm our business and reputation.

An operational failure in our outsourcing or transaction processing facilities could cause us to lose clients. Damage or destruction that interrupts our provision of services could damage our relationship with clients and may cause us to incur substantial additional expense to repair or replace damaged equipment. In addition, we may also be liable to third parties or owe service credits to our clients. We have installed back-up systems and procedures to prevent or reduce disruption. A prolonged interruption of our services or network that extends for more than several hours could cause us to experience data loss or a reduction in revenues as a result of such interruption. In addition, a significant interruption of service could have a negative impact on our reputation and could cause our present and potential clients to choose another service provider.

Current economic conditions could negatively affect demand for our products and services.

Cyclical fluctuations in economic conditions affect the profitability and revenue growth of those that use our products and services, including banks, credit unions and other financial institutions. As a result, unfavorable economic conditions that negatively impact the results of operations of financial institutions, such as losses from sub-prime mortgages, could negatively impact spending of current and potential clients, and sales to new clients and upgrades or complementary product sales to existing clients could be negatively affected. This could have an adverse effect on our business, financial condition and results of operations.

Our acquisition strategy subjects us to risks, including increased debt, assumption of unforeseen liabilities and difficulties in integrating operations.

A major contributor to our growth in revenues and earnings since our inception has been our ability to identify, acquire and integrate complementary businesses. We anticipate that we will continue to seek to acquire complementary businesses, products and services. We may not be able to identify suitable acquisition candidates in the future, which could adversely affect our future growth. Businesses we acquire may not perform as well as expected or be more difficult to integrate and manage than expected, which could adversely affect our business and financial results. We may not be able to fully integrate all aspects of acquired businesses successfully or fully realize the potential benefits of bringing them together. In addition, the process of integrating these acquisitions may disrupt our business and divert our resources. These risks may arise for a number of reasons, including:

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We may experience software defects, development delays or installation difficulties, which would harm our business and reputation and expose us to potential liability.

Our services are based on sophisticated software and computing systems, and we may encounter delays when developing new applications and services. Further, the software underlying our services has occasionally contained and may in the future contain undetected errors or defects when first introduced or when new versions are released. In addition, we may experience difficulties in installing or integrating our technologies on platforms used by our clients. Defects in our software, errors or delays in the processing of electronic transactions or other difficulties could result in interruption of business operations, delay in market acceptance, additional development and remediation costs, diversion of technical and other resources, loss of clients, negative publicity or exposure to liability claims. Although we attempt to limit our potential liability through disclaimers and limitation of liability provisions in our license and client agreements, we cannot be certain that these measures will successfully limit our liability.

If we fail to comply with applicable regulations our businesses could be harmed.

Our financial services data processing subsidiaries are not directly subject to federal or state regulations specifically applicable to financial institutions such as banks, thrifts and credit unions. However, as a provider of services to these financial institutions, our data processing operations are examined on a regular basis by various federal and state regulatory authorities. Specifically, we may be required to comply with, among other regulations, the Health Insurance Portability and Accountability Act, which governs the privacy and security of health information, and the regulations pertaining to the National Flood Insurance Program. If we fail to comply with any applicable regulations, we could be exposed to suits for breach of contract or to governmental proceedings, our client relationships and reputation could be harmed and we could be inhibited in our ability to obtain new clients. In addition, the future enactment of more restrictive laws or rules on the federal or state level, or, with respect to our international operations, in foreign jurisdictions on the national, provincial, state or other level, could have an adverse impact on our results of operations or financial condition.

Our failure to comply with a series of complex regulations in our walk-in payment business could subject us to liability.

CheckFreePay is licensed as a money transmitter in those states where such licensure is required. These licenses require us to demonstrate and maintain certain levels of net worth and liquidity and also require us to file periodic reports. In addition, this business is subject to regulation in the United States by FinCEN, including anti-money laundering regulations and certain restrictions on transactions to or from certain individuals or entities. The complexity of these regulations will continue to increase our cost of doing business. In addition, any violations of law may result in civil or criminal penalties against us and our officers or the prohibition against us providing money transmitter services in particular jurisdictions.

Misappropriation of our intellectual property and proprietary rights could impair our competitive position.

Our ability to compete depends upon proprietary systems and technology. We actively seek to protect our proprietary rights. Nevertheless, unauthorized parties may attempt to copy aspects of our services or to obtain and use information that we regard as proprietary. Policing unauthorized use of our proprietary rights is difficult. The steps we have taken may not prevent misappropriation of our technology. Agreements entered into for that purpose may not be enforceable or provide us with an adequate remedy. Effective patent, trademark, service

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mark, copyright and trade secret protection may not be available in every country in which our applications and services are made available. Misappropriation of our intellectual property or potential litigation concerning such matters could have a material adverse effect on our results of operations or financial condition.

If our applications or services are found to infringe the proprietary rights of others, we may be required to change our business practices or pay significant costs and monetary penalties.

As our information technology applications and services develop, we may become increasingly subject to infringement claims. Any claims, whether with or without merit, could: be expensive and time-consuming to defend; cause us to cease making, licensing or using applications that incorporate the challenged intellectual property; require us to redesign our applications, if feasible; divert management’s attention and resources; and require us to enter into royalty or licensing agreements to obtain the right to use necessary technologies. Third parties may assert infringement claims against us in the future with respect to our current or future applications and services.