An Acquiring Merchant Portfolio, like the surface of the sea, may seem calm and steady at times, but there are many forces and undercurrents at play beneath the surface. For example, revenue rates may increase, decrease or maintain year-over-year, just like the ebbs and flows of open water, but what is driving these changes?
Even when revenue rates are flat year-over-year (YOY), there are still churning undercurrents that, without a deeper dive, are not superficially apparent. The AIM team at TSG has developed the Merchant Portfolio Flywheel concept to illustrate the mechanics and movement influencing changes in portfolio profitability.
Continue reading to learn about the three phases of the merchant lifecycle (New, Retained, and Attrited) as well as unique strategies that should be considered for each phase.
NMI, a leading global payments enablement technology company, announced it has acquired USAePay, a payment solutions company. Bringing together the NMI and USAePay solution sets allows the combined entity to better serve its joint partners and the market by expanding NMI’s technical capabilities, offering more choice and further establishing its leadership in global omnichannel payments.
“This is an exciting move by NMI and USAePay. If there’s anything 2020 taught us, it’s the importance of omnichannel,” said Mike Strawhecker, President of The Strawhecker Group (TSG), an analytics and consulting firm focused on the payments acceptance industry. “The restaurant and retail industries are prominent examples of this, but it’s true across the board. With nearly a half-century between the two companies of transacting payments, they should be able to reliably innovate at a rapid pace.”
The combined company accounts for $100+ billion in payment volume and 1.5+ billion in payment transactions in 2020.
Private equity firm Advent International is merging portfolio companies Transaction Services Group and Clearent, paving the way to another payments giant. The new company will be renamed Xplor Technologies, according to a statement Thursday. The two businesses processed more than $27 billion in payments and catered to about 82,000 businesses operating across 158 countries in 2020, it said. The deal follows a flurry of combinations in the global payments sector.
Square Inc raised the bets on bitcoin by investing $170 million more and Chief Executive Jack Dorsey promised on Tuesday to “double down” on the payment firm’s commitment to the world’s biggest cryptocurrency. “The Internet needs a native currency, and we believe bitcoin is it,” the longtime bitcoin enthusiast and chief executive of social media firm Twitter Inc said. Square bought 3,318 bitcoins in the fourth quarter, adding to the mainstream acceptance of the digital currency that has been winning support from several big investors. “By us owning bitcoin, our incentives are aligned with skin in the game,” Dorsey said on a post-earnings conference call with analysts.
In 2020, eCommerce spending grew at the fastest rate in five years, while usage of cash for in-store payments fell sharply, as global consumers made increasing use of mobile wallets and other alternative payment methods in 2020 during the pandemic, according to new report released today from financial technology leader FIS®. The annual Global Payments Report by Worldpay from FIS examines current and future payment trends across 41 countries. Findings from the 2021 report show that lockdowns, shelter-in-place orders and personal safety measures during the global health crisis accelerated the shift toward digital payment methods in every area of consumer spending.
Klarna is close to finalizing a $1 billion funding round that would give the Swedish fintech company a valuation of $31 billion, two people familiar with the matter told CNBC. The Stockholm-based firm is one of the world’s largest providers of “buy now, pay later” (BNPL) services, which allow shoppers to spread out the cost of their purchases over a period of interest-free installments. The company is raising a bumper round ahead of a potential blockbuster stock market listing that would be a boon to some of its earliest venture capital investors, like Atomico and Sequoia.
May require account to read. Visa Inc. and Mastercard Inc. are planning to raise swipe fees for some types of credit-card purchases in April, adding to the squeeze felt by restaurants, retailers and other merchants already struggling through the Covid-19 pandemic. What’s more, customers’ switch to online shopping during the pandemic—a trend heralded for keeping businesses afloat when people are reluctant to venture inside stores—is also creating extra costs for merchants. Swipe fees, which merchants pay when a customer pays by card, are often higher on online purchases.
Payment transactions within the financial-services sector had the dubious distinction of having the highest rate of fraud attacks in the second half of 2020, according to latest Cybercrime Report from LexisNexis Risk Solutions. Alpharetta, Ga.-based LexisNexis Risk Solutions says payment transactions in financial services had an attack rate of 3.6% in the latter part of 2020, compared with 2.3% in e-commerce and 1.8% among media. Attack rates measure the number of transactions that ultimately are deemed fraudulent. The analyzed data included 28.4 billion transactions from July through December.
Coinbase has publicly filed paperwork to list its stock on the NASDAQ exchange, a huge step forward in the first major public offering for a cryptocurrency company. Coinbase’s S-1 was published on Thursday morning, after being confidentially submitted to the SEC in December. In an attached letter to investors, founder Brian Armstrong presented cryptocurrency as an equalizing force in financial markets — and Coinbase as the company at the forefront of that change.
Australian buy now, pay later giant AfterPay has entered a transformational partnership that will give merchants using Stripe code the opportunity to offer customers the option of installment-based purchases. Ten years since launching, Stripe’s infrastructure powers hundreds of billions of euros of payments for businesses in over 140 countries and territories around the world. The collaboration with AfterPay will enable Stripe merchants tp introduce a four month installment payment plan for consumer purchases at the checkout.
Ten years after launch, British payments group TransferWise is changing its name. Meet ‘Wise’. It’s not ‘just’ a money transfer company anymore — and the name change is designed to highlight the company’s expanded portfolio of services. “Our name catches up with who we’re already building for — a community of people and businesses with multi-currency lives,” said Kristo Käärmann, CEO and cofounder. “We’ve evolved to fix more than just money transfer, but the core experience of using Wise will remain.” Wise now offers three products: an international currency account, a business account and a platform which allows fintech customers (like Monzo, GoCardless and Xero) to use the Wise infrastructure for their own cross border payments.
The executive who built the financial services boutique for Paytm, India’s most valuable startup, from the ground is ready to do something similar all over again. Pravin Jadhav, the former chief executive of Paytm Money, revealed on Thursday his own startup, Raise Financial Services. This time, Jadhav — under whose leadership, Paytm had amassed over 6 million Money customers — is focusing on serving a different set of the population.
Walmart will enable eligible BigCommerce users to sell products on the Walmart Marketplace. The retailer also has launched an expediated review process through BigCommerce, letting merchants who use the platform become approved Walmart sellers more quickly than applying on their own. Walmart has been riding the wave of ecommerce, with channel sales up 69% in Q4 2020 alone and an estimated 120 million unique shoppers visiting Walmart.com each month. The retailer has been building out its online capabilities in multiple ways, including launching the Walmart+ service, expanding autonomous delivery pilots and creating new tech to make grocery delivery more convenient.
The Federal Reserve's online money transfer system, including Fedwire Funds and FedCash, suffered an outage for more than three hours Wednesday afternoon, with the Fed citing technical issues as the cause and not a cyber incident. The bank began restoring services by late afternoon, but at its height, the outage affected the Federal Reserve's Account Services, Central Bank, Check 21, Check Adjustments, FedACH, FedCash, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web, Fedwire Funds, Fedwire Securities and National Settlement Services.
Easily the most sophisticated skimming devices made for hacking terminals at retail self-checkout lanes are a new breed of PIN pad overlay combined with a flexible, paper-thin device that fits inside the terminal’s chip reader slot. What enables these skimmers to be so slim? They draw their power from the low-voltage current that gets triggered when a chip-based card is inserted. As a result, they do not require external batteries, and can remain in operation indefinitely.
MoneyGram has suspended trading on Ripple's platform over concerns about the latter's litigation with the Securities and Exchange Commission. In 2019 Ripple agreed to invest up to $50 million in MoneyGram as part of a two-year partnership that has seen the old-school money transfer player tap the blockchain startup's XRP digital currency for cross-border payment and foreign exchange settlement.
Seventy-eight percent of senior IT and security leaders believe their organizations lack sufficient protection against cyberattacks, according to research conducted by IDG Research Services on behalf of Insight. The high level of concern expressed by these leaders resulted in 91% of organizations increasing their cybersecurity budgets in 2021 — a figure that nearly matches the 96% that boosted IT security spending in 2020. Insight’s report was based on responses from more than 200 C-level IT and IT security executives in organizations with an average of 21,300 employees across a wide range of industries.
Treasury Secretary Janet Yellen on Thursday said vaccinations are the strongest stimulus that countries can provide to the world economy, in a letter to Group of 20 countries. "A rapid and truly global vaccination program is the strongest stimulus we can provide to the global economy," Yellen told her colleagues in the organization, which includes China and India. The Treasury secretary urged G-20 nations to increase their support of programs designed to deliver vaccines to all parts of the world, and also called on them to keep up "significant fiscal and financial policy actions" to support economic recovery.
New claims for unemployment fell last week, the government reported on Thursday, the latest sign that the labor market’s recovery, however slow and unsteady, is continuing. A total of 710,000 workers filed first-time claims for state benefits during the week that ended Feb. 20, a decrease of 132,000, the Labor Department said. In addition, 451,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a decline of 61,000.
Mastercard and Deutsche Bank are linking up to develop “innovative digital payment solutions for companies.” According to a press release, the collaboration will target businesses, helping them reach new customers, “develop digital business models and expand sales channels in Germany and beyond.” The target market includes digital platforms that allow businesses to “offer their products directly to consumers,” the release said, For this, companies need “an efficient payment management system for mobile and digital payments” that allows for an integration of their financial and accounting systems.
Nuvei Corporation, the global payment technology partner of thriving brands, announces its accelerated expansion into the U.S. iGaming market. Onboarding online operators from fantasy sports, sports betting, casino, iLottery and several other industry sectors, Nuvei merchants can succeed due to the Company’s vast experience in customizing payment solutions specifically for online gaming and gambling operators. Recognizing huge opportunity in the growing U.S. iGaming market, Nuvei has already obtained approvals to provide payment services to iGaming operators in multiple states, with more expected.
San Francisco-based Affirm Holdings Inc said on Thursday that it is planning to launch its first payment card allowing users to pay for some purchases in installments, as the buy now, pay later (BNPL) sector booms. Founded in 2012, Affirm has become one of the most well known buy now, pay later firms in the United States, giving consumers the option to easily spread payments for online purchases.
EVO Payments, Inc. announced its fourth quarter and year-end 2020 financial results. For the fourth quarter ended December 31, 2020, reported revenue was $116.7 million compared to $129.4 million in the prior year. On a reported and currency neutral basis, revenue for the fourth quarter decreased 10%. On a GAAP basis for the quarter ended December 31, 2020, net income was $3.9 million compared to a net loss of $3.2 million in the prior year. Adjusted EBITDA decreased 7% to $44.7 million for the quarter, and on a currency neutral basis, adjusted EBITDA declined 6% compared to the prior year.
Early Warning Services, LLC and The Clearing House (TCH) announced Zelle® transactions can now be cleared and settled over the RTP® network. “Demand for faster payments has never been higher, and today’s integration milestone eliminates lengthy and costly legacy processes that have long been barriers to many real-time payment settlements between financial institutions,” said Lou Anne Alexander, chief product officer, Early Warning Services. “Our combined foundation will provide all financial institutions an easy solution for new and emerging business use cases, including bill pay.”
dLocal, the foremost payment platform connecting global merchants to emerging markets, and Lightspeed, a leading provider of cloud-based, omnichannel commerce platforms, today announced a new partnership. The collaboration will allow Lightspeed merchants to accept local payment options across Latin America as the small business market in that region undergoes a rapid digital transformation. The direct integration, now live in Mexico, enables Lightspeed eCommerce merchants to effortlessly start accepting local payment methods in Mexican pesos.
European payment services provider Nets now offers PayPal as a payment option for its merchants in the Nordics. Nets customers in Denmark, Finland, Norway and Sweden will find PayPal available on the Nets e-commerce platform, Easy, along with cards and local payment options for SMBs. Nordic merchants - particularly those with an international customer base - will benefit from a broader range of payment alternatives presented in a seamless customer interface.
ACI Worldwide, a leading global provider of real-time digital payment software and solutions, announced financial results for the quarter and full year ended December 31, 2020. “The continued execution of our three-pillar strategic plan is enabling ACI to be fit-for-growth, more agile and customer-centric,” said Odilon Almeida, president and CEO of ACI Worldwide. “With our strong fourth quarter performance and our continued momentum, I am confident that 2021 will be an important milestone year for ACI.
Paysafe, a leading integrated payments platform, announced that it won in the ‘Best Omni-Channel or Multi-Rail Payment Solution’ category at the Merchant Payments Ecosystem (MPE) Awards. Presented at a virtual ceremony yesterday, Paysafe’s award recognized its omni-channel payment offering that seamlessly combines in-person, online, and mobile payments for independent software vendors (ISVs) and merchant partners.
Bluefin, the leader in encryption and tokenization payment and data security, and IVR Technology Group, provider of omnichannel, integrated billing platform solutions for payment automation by voice and text, have partnered to provide IVR Technology Group’s automated, PCI Compliant phone payment platform through Bluefin’s PayConex™ gateway. IVR Technology Group’s Compass Automation Platform provides voice and text automation solutions that are gateway and processor agnostic, mitigate PCI DSS risk, and provide the option for 24/7/365 payments.
OLS Payments, an InComm Payments company, announced a new partnership with Intelligent Clearing Network (ICN), a software-as-a-service coupon clearing company, to provide retailers with a solution addressing multiple issues related to paper coupon fraud, processing, and clearing. The solution, which is built upon existing InComm Payments technology and software and supported by its Enhanced Payment Platform (EPP), provides retailers with a cloud-based solution to paper coupon fraud, paper coupon validation processing, electronic clearing of paper coupons, and mobile redemption of nationally distributed coupons.
IRIS CRM is proud to announce a new integration, Merchant Reporting Through SAM by Netevia for SignaPay ISOs. ISOs are now able to view SignaPay deposits, chargebacks, merchant account statuses, and statements alongside their portfolio-wide merchant reporting in IRIS CRM. With the ability to analyze SignaPay reporting through SAM by Netevia in conjunction with their full merchant portfolio, ISOs can make better business decisions and grow their business faster. SAM, also known as SignaPay Account Management, is SignaPay’s complimentary reporting tool.
BlueSnap, the All-in-One Payment platform for global B2B and B2C businesses, announced its efforts to remove confusion in the patient billing process and help healthcare providers and services get paid faster, more efficiently and securely. The company's Healthcare Payment Solutions for Platforms enable software vendors focused on the healthcare industry to offer a white-labeled, integrated payment solution to their clients. By allowing healthcare platforms to seamlessly incorporate a digital payment workflow into their platform, BlueSnap is catalyzing the healthcare industry's adoption of a more modern, patient-centric experience.
Atlantic-Pacific Processing Systems NV, Corp. (APPS), a leading fintech white label SaaS payment processing and acquiring infrastructure platform, and Global Oculus, a blockchain and digital currency solution provider, announced they have partnered to provide businesses with a real-time digital currency acceptance, clearing and settlement solution. The companies will pilot merchant acceptance of leading digital currencies for consumer purchases using fast trade execution speeds equivalent to traditional credit card transaction processing timeframes.
