TSG PaymentsPulse

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TSG Research Studies

ETA/TSG Release New U.S. Economic Indicators Report in Conjunction with 2013 Annual Meeting & Expo

The Electronic Transactions Association (ETA) and The Strawhecker Group (TSG) have released the 17th Economic Indicators Report, illustrating performance of macroeconomic, microeconomic, and payments industry trends

TSG Swipe Fee Infographic

The Strawhecker Group has created an Infographic titled ‘What Benefits Me By Paying a Credit Card Swipe Fee.’ This new Infographic illustrates an explanation of what merchants pay to accept credit cards, why it’s paid, and the benefits provided to merchants and consumers. TSG has used considerable primary and secondary research from a plethora of resources to build-out this visualization providing our educated perception of the ongoing discussion around swipe fees.

TSG/ETA Release 16th US Economic Indicators Report

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 Analysis: Vantiv Acquisition of Litle & Co.

Preliminary estimates show a premium placed on Litle & Co. by Vantiv as their business fits a stated growth strategy of further penetrating the e-Commerce marketplace. Click here to read more of TSG's analysis on this acquisition.

TSG Analysis: Cielo Acquisition of Merchant e-Solutions

Key Finding: Value driven by Cielo’s desire for ecommerce platform

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 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).

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Payments Industry News »

Square Cash Will Let You Send Money To Your Friends By Email

May 21, 2013 – 1:57 pm | No Comment

TechCrunch – 5/20/13: Square’s not just for businesses apparently, as an invite-only page for a product called “Square Cash” has popped up. Not many details are known about it, but we’ve reached out to the …

Google Checkout to shut down in November

May 21, 2013 – 1:56 pm | No Comment

PCWorld – 5/20/13: Google will retire its Checkout payment processing tool on November. 20, and warned retailers they will need to move to a different payment processing platform. Checkout, which launched in 2006, was merged …

Swipely raises $12 million in funding

May 21, 2013 – 1:55 pm | No Comment

Finextra – 5/21/13: On June 1st, 2012, Swipely launched our platform to help local merchants accept payments, understand customers and grow sales. It’s been an exciting ride ever since, and we’re proud to have been …

Bitcoin Comes To SWIFT

May 21, 2013 – 1:53 pm | No Comment

Forbes – 5/20/13: Hosted at the palatial and temple-like SWIFT headquarters, this year’s TransConstellation Alumni conference featured a mix of panel representatives from both “new” payment approaches and “established” payment players. I was invited to represent …

Mobile Payment Startup Payvia Buys Mogreet To Add Messaging-Based Marketing To Its Payment Platform

May 20, 2013 – 4:28 pm | No Comment

TechCrunch – 5/20/13: Some more consolidation afoot in the worlds of mobile marketing and mobile payments: Payvia, one of the many startups working in the area of carrier-based mobile billing, is buying Mogreet, a mobile marketing company …

LevelUp adds NCR as a POS partner

May 20, 2013 – 3:52 pm | No Comment

Mobile Payments Today – 5/20/13: For mobile payment startups, consumer adoption — i.e., getting customers in stores to actually pay using your app or sticker or whatever — is only half the battle. The other …

ISOs’ Authorization Costs Decline, But Other Processing Expenses Are on Their Way Up

May 17, 2013 – 12:57 pm | No Comment

Digital Transactions – 5/17/13: Good news for independent sales organizations: authorization costs continued their long-term decline over the past two years, according to a recent industry survey. Not-so-good news: clearing and settlement costs have stopped …

Square And PayPal Push The iPad-ification Of America’s Small Businesses

May 17, 2013 – 12:57 pm | No Comment

ReadWrite – 5/14/13: Square, PayPal, and Groupon all made news this week with the common goal of getting small businesses to junk their cash registers for Internet-connected devices that promise to bring the simple act …

New Cash Registers Are Sexy, But What’s Beneath the Counter Matters More

May 17, 2013 – 12:40 pm | No Comment

Wired – 5/15/13: Anointed the next Steve Jobs by some admirers, Twitter inventor and Square CEO Jack Dorsey is one of the few people who can get the Silicon Valley press corps to roll out …

Finally! Integrated Sales And Management Software Made Exclusively For ISOs and Banks.

May 16, 2013 – 4:42 pm | No Comment

San Jose, California — May, 16 2013 — The Formula®, For the first time in history, banks and independent sales organizations (ISOs) worldwide now have access to the newest release of a proven Enterprise …