TSG PaymentsPulse

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TSG Research Studies

Vantiv – Initial Public Offering Analysis

Market Multiple Notes: (1) Compared to other public payment company market value multiples, Vantiv’s IPO received a relatively cheaper valuation based on the P/E, P/S, and EV/EBITDA price multiples (2) Given the strong financial performance on the following pages it is likely that Vantiv’s relatively large amount of long term debt in it’s capital structure is a driving force behind the relatively lower valuation multiples (3) Vantiv’s interest coverage ratio, at 5 times, is also relatively lower than that of its peers which may be causing investors to price an additional risk premium related to potential financial distress into Vantiv’s market ...

TSG/ETA Economic Indicators Q4 2011 - Report Shows Acquiring Portfolios Experiencing Healthy Growth

This FREE report is a compilation and analysis of US economic data. Its intent is to provide a deeper understanding of the US economy and therefore, the ability for ETA members to better assess their position in the current economic climate. This is the 10th edition of the report released quarterly. Please reference cited sources for more detailed statistics. The views expressed are those of ETA/TSG and are subject to change. They are shared for educational purposes only. The information is based upon information we consider reliable, but its accuracy and completeness cannot be guaranteed. Click here to read more ...

TSG Metrics: Merchant Acquiring M&A Multiples

Recent research conducted by TSG Metrics, the strategic research and analysis arm of The Strawhecker Group (TSG), suggests that the market for strategic acquisitions in the merchant acquiring space continues to generate interest from entities both inside and outside the industry. Though data in the charts suggest that obtaining an above average net revenue multiple can be a relatively rare occurrence recent trends would indicate that merchant acquiring properties have been attracting these rare occurrences more frequently. The current three year rolling average merchant acquiring net revenue multiple is approximately 2.75 times above what it was in 1990.

Recent Changes to Debit Economic Model Substantial; Durbin Has Unintended Effect As Consumers Will Absorb Negative Impacts

TSG Metrics, a division of The Strawhecker Group (TSG), released details on the economics of debit signature and PIN debit transactions for three purchase amounts ($100, $40, and $5) before and after new interchange fee regulations were implemented on October 1. This provision is a cap on the fees that the largest U.S. debit card issuing banks (those with more than $10 billion in assets) can collect when their customers use a debit card to make a purchase (bank interchange fees).

For Sale: 2011 Merchant Processing Pricing Benchmark Study

During 2011, TSG surveyed the merchant acquiring industry to determine the prevailing line item pricing rates for merchant processing. The objective of this unique Benchmark Study was to explore the cost of key pricing elements throughout the US merchant acquiring Industry. Click for an overview.

TSG Analysis – Fed Announces Final Durbin Amendment Rules

Today the Federal Reserve Board staff presented its final version of the rules that implement the Durbin Amendment to the Dodd-Frank financial services reform law. TSG’s team of payments experts listened in on the final rules presented and prepared a two-page analysis that compares the rules to those previously proposed and offers comments to the impacts of the rules on the payments industry. Click here to read TSG's analysis.

TSG Analysis – The Changing Merchant Acquiring Ecosystem: May 2010 to May 2011

In the last 12 months, multiple acquisitions and divestitures in the payments industry has substantially altered the look of the merchant acquiring ecosystem. Most of the transactions shown here have characteristics representing long-term strategic plays by payments companies attempting to further engrain themselves in the merchant acquiring space, particularly the moves made by TSYS, Visa, and MasterCard.

New Report: 2011 Directory of U.S. Merchant Acquirers

This report analyzes the current Top 110 players in the US Merchant Acquiring industry along with 30 supplemental ISOs. This report details specific information about each acquirer including: processors and sponsor banks, while highlighting the key differences of each by detailing the Ownership Structure as well as noting Strategic Partners as well. The report also illustrates the volume and transactions processed over the past 3 years as well as each company’s merchant base where available. In addition the report contains links to significant news or occurrences affecting each specific company.

TSG Industry Studies Order Form

The Strawhecker Group provides the payments industry with highly focused research and industry wide studies available by individual purchase; discounted prices available for purchasers of recurring reports and for participants in TSG industry studies. Click here to order today!

New Report: Payments Industry Snapshot Vol. #1 - Acquiring/Processing

The Strawhecker Group (TSG) has issued a new report reviewing recent strategies, tactics, and performance of companies that operate in the acquiring and processing sectors of the electronic payments industry. The report also contains recent movements in the stock price and market value metrics of the companies analyzed in the report as well as their aggregated financial performance and top trends in the sector. Companies currently included in the report include First Data, Total Systems Services (TSYS), Global Payments, and Heartland Payment Systems.

TSG Analysis of TSYS' Acquisition of FNMS

A six page overview of the potential motivation and impacts of the acquisition. Click here to read the analysis.

Market Value Drivers of Payments Industry Acquisition: VeriFone To Acquire Hypercom

TSG reviewed VeriFone’s recently announced planned acquisition of Hypercom to determine the potential value drivers and motivational factors behind the transaction. Prior to the acquisition VeriFone and Hypercom are ranked second and third, respectively, behind Ingenico for world market share among POS manufacturers. However, post-acquisition VeriFone and Hypercom will have a combined market share of 37.4% over Ingenico with 28.3%. Click here to read the full report.

Analysis of Netspend and Greendot IPOs

TSG recently reviewed the Initial Public Offerings of GreenDot and NetSpend to determine the market’s valuation and potential value drivers behind the transaction. GreenDot and NetSpend are direct competitors on the pre-paid debit card marketplace. All multiples are based on the IPO offering price.

Payments Industry Landscape Continues to Shift With Acquisition Announcement of NPC

FTPS announced its plans to acquire NPC on September 15, 2010 from private equity firm GTCR. This announcement continues an 18-month trend of M&A involving the largest U.S. acquirers, following recent transactions including Advent’s investment in FTPS, TSYS’ joint venture with FNMS and Advent/Bain’s acquisition of RBS WorldPay. The relationships of the payments companies involved in the aforementioned transactions will be further intertwined upon the consummation of the NPC transaction, which is expected to close in November. The attached chart illustrates these relationships, while putting the RBS, FTPS, and NPC transactions into perspective, particularly in terms of affected U.S. acquiring market share.

Market Value Drivers of Recent Payments Industry Transactions

TSG reviewed Visa’s acquisition of CyberSource and MasterCard’s acquisition of DataCash to determine the value drivers and motivations behind the two transactions. These companies were chosen as they were each acquired by one of the major card brands and also offer similar services. Click here to review this analysis.

Acquisition of RBS WorldPay – TSG’s Comparative Analysis

TSG reviewed three recent transactions in the merchant acquiring industry to illustrate the various factors that influence the market value of a merchant acquiring company, and in turn, its net revenue multiple. The three transactions reviewed include the transactions involving Fifth Third Processing Solutions (FTPS), First National Merchant Solutions (FNMS), and RBS WorldPay (RBS).

TSG Releases Trend Data on Small-Mid Market Merchant Portfolio and Enterprise Transactions Since 1988

The Strawhecker Group (TSG) recently completed an assessment of M&A transactions in the merchant acquiring market completed over the past two decades including merchant portfolio and ISO enterprise transactions that generated $1.5 to $10 billion in annual volume. TSG has concluded that transactions of this size have averaged a multiple of 2.64 times annual net revenue. According to TSG there are numerous value drivers behind transactions which impact acquisition valuations. Multiples lying well below the mean, in the bottom 25th percentile, for example, typically are static portfolios with a limited or non-existent distribution channel, above average attrition, or no merchant account ...

Historical M&A Transactions

TSG Consulting has put together a study of historical Portfolio and Enterprise Sales over a period of 10 years in the form of multiples of annual net revenue. The report also shows a high level view of different aspects that affect the multiples paid for these offerings.

Need a Bin Sponsorship Agreement - Know what to expect

TSG conducted a BIN Sponsorship pricing survey and requested participation from fifteen (15) major BIN sponsoring institutions. The questions focused on BIN sponsorship pricing for bankcard, PIN-debit, and ATM sponsorship. If you are looking for a BIN Sponsorship relationship than this study will give you the necessary averages to help assist you in your decision making process.

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Payments Industry News, Technology »

Isis Mobile Wallet Will Be Accepted at Hundreds of Merchant Locations across Austin and Salt Lake City

May 15, 2012 – 11:39 am | No Comment

MarketWatch – 5/15/12: Isis(TM), the mobile commerce joint venture created by AT&T Mobility, T-Mobile USA and Verizon Wireless, today announced the first of its local merchant partners across Austin, Texas and Salt Lake City, Utah. …

Is Global’s Breach Growing?

May 15, 2012 – 11:33 am | No Comment

Bank Info Security – 5/15/12: Some sources now say the data breach at Global Payments Inc., revealed in March, may have exposed 7 million accounts – a significant increase from the 1.5 million the payments …

Paymetric, Velocitor launch data intercept for mobile

May 15, 2012 – 11:31 am | No Comment

GreenSheet 5/15/12: Paymetric Inc., the leading provider of integrated and secure enterprise payment acceptance solutions, announced today it has partnered with Velocitor Solutions, a software solutions firm specializing in mobile and wireless applications, to offer …

AmEx mobile app tracks user transaction data and location to offer relevant merchant discounts

May 15, 2012 – 11:25 am | No Comment

Finextra – 5/15/12: American Express has launched a ‘mobile offer engine’ that recommends and ranks relevant merchant offers in real time for US cardmembers based on their spending history and location.
The service is being piloted …

Goliath PayPal’s Big Ambitions in the Real World

April 24, 2012 – 2:51 pm | No Comment

MarketWatch – 4/24/12: A David and Goliath face-off may be brewing in one sector of the nascent mobile payment arena.
The Goliath is PayPal, eBay Inc.’s successful online payments business, where PayPal is the preferred payment …

Government E-Payments Adoption Improves Globally According to Visa-sponsored Economist Intelligence Unit Study

April 24, 2012 – 2:48 pm | No Comment

BusinssWire – 4/24/12: The Economist Intelligence Unit (EIU) today released the results of the 2011 Government E-Payments Adoption Ranking (GEAR) study, commissioned by Visa Inc. (NYSE:V). The GEAR study measures the extent to which governments …

Visa’s PlaySpan Combines Subscriptions and Microtransactions into UltimatePay

April 24, 2012 – 2:47 pm | No Comment

Digital Media Wire – 4/24/12: Monetization solutions firm PlaySpan, a Visa company, today announced that its UltimatePay combination subscription and micropayments billing product is available to all content and application providers.
During the past eight months …

CrossCheck Named Preferred Vendor for CFMA

April 24, 2012 – 2:30 pm | No Comment

4/24/12: PETALUMA, Calif. – CrossCheck, Inc., a leading provider of check guarantee and electronic check processing services, has been named a Preferred Vendor by the California Furniture Manufacturers Association. Special group pricing on payment services …

TSG’s ETA 2012 Recap

April 20, 2012 – 10:48 am | No Comment

Compiled by the TSG Team
The ETA Annual Meeting Event in Las Vegas was the most attended conference in history and broke all previous records. There was a very discernible “buzz” of activity at this show …

TSG’s NewsFilter, The Payments Industry’s Leading Source of News and Information, Publishes 300th Edition

April 20, 2012 – 10:27 am | No Comment

NewsFilter, launched in 2006, continues to create awareness of the essential news in the payments industry
Omaha, NE, April 20, 2012: TSG, a management consulting company focused on the electronic payments industry, announces the release …