A collection of our most popular payments insights
As the year begins to wind down, we thought you might enjoy a round-up of some of the hottest payments content TSG has released in 2021. Visit the collection →
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As the global economy continues to emerge from the pandemic, the online shopping trends that accelerated as a result are here to stay and the role of payment gateways has become increasingly crucial. High functioning and efficient payment gateways are the backbone of the eCommerce payments ecosystem, and as they always have been, gateways will be tested this holiday season as they enable transactions for what will likely be the largest online shopping season thus far.
As part of our continuous research, TSG is pleased to share a few interesting notes and key trends uncovered from this year’s Payment Gateway Directory, sponsored by MCAG, which contains over 110 payment gateways of varying sizes.
Payments processor Shift4 Payments Inc. announced early Wednesday a service outage at a major processor in August cost the company more than $22 million in payments to affected merchants. But it added the Allentown, Pa.-based company is plunging into a range of new markets with major clients including Allegiant Airlines, St. Jude Children’s Research Hospital, and SpaceX Corp. The company also took steps to calm concerns about a report in October linking point-of-sale devices from PAX Technology Inc. with alleged security issues.
Paysafe, a leading specialized payments platform, announced its financial results for the third quarter of 2021. Philip McHugh, CEO of Paysafe, stated, “In the third quarter we reported Adjusted EBITDA in line with our expectations, despite softer than expected revenue, reflecting both market and performance challenges within the digital wallet business. While the recent trend will drive an adjusted financial outlook, we continue to see strong momentum across the business. Our position to win in high growth and disruptive markets including online sports betting and crypto continues to accelerate, coupled with strong delivery against our cost and technology platform targets.”
Shares of Affirm, the digital “buy now, pay later” company, soared as high as 30% in after-hours trading Wednesday, after the company said it would expand its partnership with Amazon. The company also beat analyst estimates on revenue in the fiscal first quarter.
As part of the new agreement with Amazon, Affirm will serve as the sole third-party buy now, pay later option for the e-commerce giant in the U.S. However, credit card companies will still be able to offer buy now, pay later options on Amazon in the future. Amazon will also integrate the platform into its digital wallet in the U.S. Affirm can be used for eligible purchases on Amazon of $50 or more.
Marqeta, Inc., the global modern card issuing platform, reported financial results for the third quarter ended September 30, 2021. Marqeta reported total processing volume of $27.6 billion, with net revenue of $132 million. This represented an increase of 60% and 56%, respectively, from the same quarter of 2020. The company saw gross profit of $59 million during the quarter, up 67% year-over-year. The company reported a gross margin of 45% for the quarter ended September 30, 2021, up from 42% in the same quarter of 2020.
Nuvei Corporation, the global payment technology partner of thriving brands, today reported its financial results for the third quarter ended September 30, 2021. “We achieved a number of significant milestones in the third quarter including financial results that exceeded the outlook previously provided, releasing new innovative product solutions, growing our portfolio of alternative payment methods (“APMs”), announcing several exciting new customer wins, and completing three acquisitions that enhance and expand our addressable market, product capabilities, and geographic footprint,” said Philip Fayer, Nuvei’s Chair and CEO.
TSG is pleased to recognize a selection of payments companies for their exceptional start-up, small and medium-sized (SMB) eCommerce merchant experience.
Utilizing its Gateway Enterprise Metrics (GEM) platform, TSG assesses the experience a merchant faces when seeking the ability to accept cards online. Powered by the firm’s Market Intelligence product, TruShop, the industry’s top providers are measured and benchmarked from the merchant’s point of view across several categories.
British start-up Zilch is riding the “buy now, pay later” wave to America. The London-based company said Wednesday it has raised $110 million in a fresh round of funding which values it at $2 billion — four times the $500 million Zilch was worth in its last private investment round eight months ago. The investment was led by Ventura Capital, a pre-IPO investor that has previously backed Alibaba and Spotify, and Gauss Ventures, an investor in London fintech firm Curve.
To set its offerings apart from the many competitors on the market, Toast is working towards becoming restaurants’ go-to — not just for consumer payments, but also for business-to-business (B2B) transactions. In its first earnings report after going public in September, the point of sale (POS) and restaurant management platform announced Tuesday (Nov. 9) that it is prioritizing restaurants’ back-of-house needs. “We're investing pretty heavily in backing innovation in and around what I would call accounts payable automation, as well as food-cost optimization,” Chris Comparato, CEO of Toast, told analysts on a call.
BNPL apps give millions of users the chance to instantly purchase what they want, then pay off the item in installments. But as the services extend from small-ticket items to luxury goods, exercise equipment, and even rent and utilities, consumer protection advocates worry they may lead people into buying more than they can afford. While online shopping soared last year during the pandemic, credit card companies kept credit limits low and reduced new offers as lockdowns and layoffs prompted fears of widespread defaults.
Restaurant operators typically focus on good food and customer service, but when customers stopped coming in during the pandemic, many had to learn how to reach them in new ways. Childhood friends David Grandes and Andres Andrade, both originally from Ecuador, started Mimic in 2018 in Brazil as a dark kitchen-as-a-service, specializing in producing food at scale with online channel sales. As food operators themselves, they saw firsthand last year the toll it was taking on restaurants that needed to quickly reinvent themselves during the pandemic, but weren’t sure how to start integrating digitalization into their businesses.
Starting next year, you'll be able to use the money anybody Venmos you to buy products directly from Amazon — so long as you live in the US. PayPal has announced that it has struck a deal with the e-commerce giant to allow US customers to pay with Venmo at checkout. It doesn't have an exact date for the feature launch, but when it does become available, you'll be able to pay either with your Venmo balance or your linked bank account.
Coinbase Global Inc. plunged 13% from an all-time high Tuesday afternoon, after revealing a summer slowdown in cryptocurrency trading caused a sales slump. Coinbase revenue fell in the third quarter by more than 40% from the previous three months, as cryptocurrency trading volumes. Coinbase, which offers a signature platform for trading crypto, felt the pain of users not trading to the same levels of previous months. “The story of our third quarter really centers around lower volatility that we saw in the quarter,” Chief Financial Officer Alesia Haas said in a conference call Tuesday
No matter what the haters on its platform may say, Twitter clearly thinks cryptocurrency is more than just a passing fad. That much Twitter made clear Wednesday with the announcement of both a new distributed technology-focused hire and the creation of a new crypto team. Tess Rinearson, a software engineer with a long history of developing blockchain tech, confirmed her new role as team lead in a thread explaining what she views as the natural fit between Twitter and distributed technology like the blockchain and Bitcoin.
As part of its Meta rebrand, Facebook has renamed its financial services and payments group from F2 to Novi. All fintech products - from WhatsApp P2P payments to Instagram shopping - will now come under Novi, the name of Facebook's digital wallet. Says Novi head David Marcus: "Our mission remains to empower everyone, everywhere to access the world’s financial system to accelerate financial inclusion and economic empowerment.
Apple chief executive officer Tim Cook said he owns some crypto as "part of a diversified portfolio," but is not planning for the tech company to follow Tesla’s example by investing in Bitcoin or other tokens. Speaking at the New York Times’ DealBook Online Summit on Tuesday, Cook said he would not use the company’s roughly $200 billion in cash on hand to invest in cryptocurrencies. He also did not intend to accept crypto as a means of payment for Apple products “in the immediate future.” “It’s not something we have immediate plans to do,” said Cook.
Just as 2020 took retailers by storm and taught brands a lesson or two in resilience, 2021 held its own surprises. The vaccine rollout and the return of many Americans to work proved positive for overall sales. However, retailers continue to face a number of other challenges, including supply chain issues that are still hampering the shipping and delivery of goods. Moving into 2022, everyone is looking forward to hopefully getting back to normal and moving past the pandemic.
The payment services company is available at Nordstrom and Nordstrom Rack, J.Crew, Madewell, American Eagle, Aerie, Tilly's, Morphe, Alo Yoga, Parachute Home, and Le Creuset Signature Boutiques and Outlet Stores. The company’s in-store payment service enable retailers to provide customers with an option to pay for their purchases over time with four interest-free payments. Instead of layaway, customers can take home their purchases right away.
Panera Bread has always said that between 1997 and 2017, it was the best restaurant stock out there, delivering a return to shareholders that was 44 times better than the S&P 500. But in 2017, Panera suddenly went private through a $7.5 billion deal with JAB Holding Company, the breakfast-obsessed investment arm of Germany’s reclusive billionaire Reimann family. Now today, JAB and the artisan-bakery chain are saying it’s coming back—going public for a second time, albeit through another peculiar arrangement.
Global eCommerce analytics company Profitero announced the results of its fifth annual U.S. Price Wars study. The study analyzed prices for 15,530 products across 15 categories from 12 leading online retailers, including Amazon, Best Buy, Target, The Home Depot, and Walmart. For the fifth consecutive year, Amazon took the crown as the cheapest online retailer in the U.S., with prices that were 14% cheaper on average than competitors. Amazon beat 11 of the 12 retailers examined in every category, with online pet retailer Chewy being the only company to match Amazon’s low prices in any category, however Walmart and The Home Depot are not far behind.
May require account to read. On a seven mile route between a distribution center and a Walmart store in Arkansas, the retail giant is now operating autonomous trucks without a safety driver behind the wheel. Two autonomous box trucks, provided by Gatik, an autonomous vehicle startup that focuses on logistics for the retail industry, haul customers orders from a Walmart distribution center that fulfills online orders to a retail store in Bentonville, Arkansas, where the retail company is headquartered.
Big tech companies expect to meet a December 15 deadline to respond to a Consumer Financial Protection Bureau (CFPB) investigation into their payment practices, according to a trade group that represents them, the Electronic Transactions Association (ETA). Satisfying the demands announced last month by the agency's new chairman, Rohit Chopra, may not be easy. “The payments space has a good story to tell,” Scott Talbott, ETA's senior vice president for government affairs, said in an interview. “We look forward to working with the bureau to share our approach and answers to the questions about helping consumers, protecting consumers, and protecting data."
Step up your crypto game John and Jane Doe regulator, says one high-ranking executive at cryptocurrency Ripple. "I think the U.S. regulators in particular need to get with the program and come up with more proactive regulation," said Asheesh Birla, RippleNet general manager, at the Yahoo Finance/Decrypt crypto investing conference on Tuesday. Birla pointed out that much of Ripple's cross boarder payment volume is concentrated overseas, reflecting a better regulator framework. "Countries like Singapore, Asia and Europe have come up with cryptocurrency regulation," Birla said, adding "I think we are falling behind in crypto regulation."
May require account to read. The Justice Department’s seizure of $6.1 million in funds tied to alleged ransom payments, announced alongside fresh sanctions against a cryptocurrency exchange and arrests of alleged hackers, marked an escalation in Washington’s attempt to weaken hacking groups that have disrupted U.S. businesses. The retrieval of funds shows how victim companies’ cooperation with law enforcement can sometimes pay off, U.S. officials said Monday, while sanctions will create additional questions for U.S. businesses faced with hackers’ ransom demands.
Trading platform Robinhood said Monday that personal information for more than 7 million customers was accessed during a data breach on November 3rd. The company said in a news release that it does not appear that Social Security numbers, bank account numbers, or debit card numbers were exposed, and no customers have had “financial loss” due to the incident. An unauthorized third party “socially engineered a customer support employee by phone,” Robinhood said, and was able to access its customer support systems.
Surging prices are steadily chipping away at Americans' buying power – as well as President Biden's approval rating. The Labor Department reported Wednesday that consumer prices were 6.2% higher in October than a year ago. That's the sharpest increase since November of 1990. Price increases were widespread, with energy, shelter, food and vehicles all costing more. Excluding volatile food and energy costs, prices were up 4.6%. Much of the upward pressure on prices is the result of a mismatch between booming demand and limited supply, as businesses struggle to find both parts and workers.
The number of Americans applying for unemployment benefits fell to a new pandemic low 267,000 last week as the job market recovers from last year’s sharp coronavirus downturn. Jobless claims fell by 4,000 last week, the Labor Department reported Wednesday. The four-week average of claims, which smooths out weekly ups and downs, dropped by nearly 7,300 to 278,000, also a pandemic low.
UK GDP growth slowed between July and September, leaving the economy still around 2% smaller than it was before the pandemic and trailing the recovery in other G7 nations. The UK economy, struggling with supply chain disruptions and high energy prices, expanded by 1.3% in the quarter, down from growth of 5.5% in the previous three-month period when many coronavirus restrictions were lifted. The Office for National Statistics (ONS) said Thursday that services drove growth in the quarter, led by spending on accommodation and food.
Chinese e-commerce giant JD.com has racked up 311.4 billion yuan ($48.6 billion) in sales across its platforms as of 14:09 p.m. Beijing time during the Singles Day shopping event, smashing through its record last year. The figure JD.com released is referred to as transaction volume. It is the amount of money that is transacted across its e-commerce platforms and does not directly translate into revenue for the company — and it does not take into account returned items.
Mastercard and ACI Worldwide, a leading global provider of real-time digital payment software, announced a new partnership that will offer Mastercard Direct Services to issuers, processors and other payment technology providers through a single API connection on ACI payment platforms. Mastercard Direct Services provides a single connection point to access a wide range of Mastercard value-added services, regardless of the network, and is part of the Mastercard Access suite of solutions.
Addressing the growing needs of restaurants for cost-effective delivery options, Fiserv, Inc., a leading global provider of payments and financial services technology solutions, introduces Clover® Online Ordering with Delivery, which provides flexible food delivery services with direct menu management, order and payment processing and reporting through the Clover platform. Clover Online Ordering with Delivery enables restaurants to increase order volume and revenue by extending online ordering to customers who want to have food delivered from their favorite restaurants in addition to supporting pick-up, curbside and dine-in options.
FinTech JUMO raised $120 million to help the startup further support emerging market entrepreneurs with next-generation financial services. Funding was led by Fidelity Management & Research Company with participation from Visa and Kingsway Capital. JUMO will use the new infusion of capital to build out the capacity and scope of its platform and offer new financial products and services to small- and medium-sized enterprises (SMEs), as well as provide long-term loan products to merchants and larger companies, according to reports.
Bottomline, a leading provider of financial technology that makes complex business payments simple, smart and secure, announced that it has completed the acquisition of Bora Payments Systems, enabling Paymode-X vendors to utilize straight through processing (STP) as a method of accepting virtual card payments. The combination adds new bank channel relationships to Paymode-X and capabilities that improve the network’s virtual card program, an important revenue driver for Paymode-X.
“Our global team executed really well this quarter as we continue to focus on delivering unique high-value services to our fast-growing and increasingly diverse customer base. We acquired a record number of new customers and drove adoption of services like B2B AP/AR, Bank Partnerships, our Commercial Card, Merchant Services, and Working Capital. We also accelerated growth in key regions like Latin America and Eastern Europe and forged new partnerships highlighted by our recently announced relationship with Coupang, a new eCommerce partner in South Korea, and Vimo, a mobile wallet provider in Vietnam, while also executing well on our rollout with eBay,“ said Scott Galit, Chief Executive Officer of Payoneer.
U.S. Bank has expanded its Request for Payment (RfP) services to help billers provide a better bill payment experience to customers. With RfP capabilities added to – a leading digital solution for accounts receivables teams – U.S. Bank commercial clients will now have access to a fully integrated bill delivery and payment platform with the RfP capabilities. With RfPs, consumers will be able to choose to have their bills delivered directly to them through their bank’s website or app.
Citi’s Treasury and Trade Solutions (TTS) launches domestic instant payments in Brazil bringing its global footprint to 28 markets in multiple geographic regions. Usage of Citi’s instant payments platform has grown at an unprecedented rate, of over 100% growth in the last 12 months. With Instant payments, also known as real-time or immediate payments, funds can be transmitted within seconds, 24/7 and are available to recipients immediately.
Even, a leading financial benefits platform designed to provide financial resiliency and control to employees, announced that millions of hourly workers across the U.S now have instant access to their earned wages. Real-time payments (RTP) from J.P. Morgan is the latest addition to Even's platform, providing members with even more options to access their pay in real time. RTP is a secure and frictionless payment method that instantly delivers funds to an Even member's bank account, giving them access to their earned wages in seconds rather than days, regardless of the time of day or day of the week.
A good thing about technology products is that they can make a particular type of service cheaper over time. We’re seeing the phenomenon play out in the corporate spend market. This morning Airbase, one of the North American startups competing in the corporate card and expense software space, announced that it will offer a free tier of its service, and that it will return most of its transaction revenues to customers via a new set of cash-back rates on its pre-funded and charge cards.
"For years, slow payments and cash-flow have been the construction industry's biggest problem, resulting in many SMB construction companies stagnating or outright failing. In fact, a large percentage of these companies fail within the first few years of operation, making it increasingly difficult for others, including newcomers, to secure credit from banks," says Zaid Rahman, Founder and CEO of Flexbase. "With our card offering, we are going to democratize access to capital for construction companies of all sizes, and bring equal opportunity to everyone."
Financial Transmission Network, Inc. (FTNI), a provider of industry-leading integrated receivables, payment processing and cash application automation solutions, announced the expanded support of single sign-on (SSO) across multiple modules on its integrated receivables platform, ETran. FTNI’s ETran platform is a highly-configurable, cloud-based, modular solution that enables organizations to streamline and automate the complete A/R lifecycle, from invoice/statement presentment, to payment acceptance, processing, and ultimately cash application operations, all on a single, cloud-based receivables processing platform.
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