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.
Investors are valuing Stripe at a $115 billion valuation in “secondary market” transactions, where shares of a private company’s stock are sold after they were first issued. That valuation is up more than threefold from the $36 billion Stripe fetched when it raised money in April 2020 from venture firms including Andreessen Horowitz, General Catalyst and Sequoia. Stripe is also planning a new primary funding round at a valuation north of $100 billion, according to a person familiar with the matter. A spokesperson from Stripe declined to comment.
While many payments companies have had their hands full contending with the many impacts of the Covid-19 pandemic, payments firms with e-commerce platforms have thrived as consumers flocked to online buying. Shopify Inc. demonstrated Wednesday just how much it’s investing in shopping and payments apps to capitalize on the growth it saw last year. In what the 16-year-old, Ottawa-based company called a “future that arrived early,” Shopify made significant changes to services within its payments platform, Shopify Pay. It launched a mobile-shopping assistant called Shop, introduced a new version of its point-of-sale technology called Shop POS, and last month extended its fast-checkout service, Shop Pay, to Facebook and Instagram.
Debit cards appear ordinary, lacking the reward programs and prestige of credit cards, the cash flow flexibility of buy now/pay later programs, the anonymity of bitcoin and the coolness of cash. But debit's one of the few payment methods that has shaken the financial services industry to its core, pitting bank issuers and merchants against each other as they argue over “swipe fees.” Debit is a powerful tool for consumers, an important revenue source for financial institutions and a critical payment method for merchants, and it's importance has grown during COVID-19.
Bitcoin hit yet another record high on Friday, and moved within sight of a market capitalization of $1 trillion, blithely shrugging off analyst warnings that it is an “economic side show” and a poor hedge against a fall in stock prices. The world’s most popular cryptocurrency jumped 2.6% to an all-time high of $52,932, setting it on course for a weekly jump of over 8%. It has surged around 60% so far this month. Bitcoin’s gains have been fueled by signs it is winning acceptance among mainstream investors and companies, from Tesla and Mastercard to BNY Mellon.
Marqeta is expanding into the consumer credit card space to help other brands launch credit card programs. The move comes just days after the payment card issuing company reportedly filed confidentially for an initial public offering, making it the latest fintech to make a move to the public markets. The value of the IPO is expected to be around $10 billion, according to Reuters. Marqeta — which is working with Goldman Sachs and JPMorgan Chase on the offering — is reportedly hoping to complete the IPO by April.
Cryptocurrency exchange Coinbase, which is preparing to trade publicly in the next few months, is being valued at $77 billion, based on trading of the company’s privately held shares on a secondary market. Those shares in the largest crypto exchange in the U.S. are changing hands on the Nasdaq Private Market at $303 a piece, according to two people with knowledge of the auction. That implies a total company value of about $77 billion – greater than Intercontinental Exchange Inc., the owner of the New York Stock Exchange.
May require account to read. Several financial technology firms are eager to grow in the expanding realm of “buy now, pay later” lending. There likely is room enough in this town for everyone, at least for now. Last week, one company that just went public in January, Affirm Holdings, and another established digital giant, PayPal Holdings , discussed how they plan to win in this emerging lending category of short-term credit for shopping purchases. Both have plenty to be excited about: PayPal launched its Pay in 4 product last year, and already generated $750 million in volume in the fourth quarter. Affirm grew volume 41% quarter over quarter in the last three months of 2020 and said it has logged promising results in beta tests of its major new partnership with rapidly growing Shopify.
Terry Angelos doesn't like to talk about Plaid too much these days. As Visa's first-ever global head of fintech, he was at the center of the corporate giant's recent failed bid to buy Plaid. "I'm not gonna comment much further on Plaid that we haven't already said," referring to Visa's decision to walk away from the $5.3 billion deal to avoid a potentially protracted antitrust legal battle with the Justice Department. But Visa's fintech ambitions go beyond Plaid, he noted. And Angelos has many other things to say about the space, which he said Visa initially was previously unsure how to approach, but now views as a fast-growing sector where the payments company hopes to play a critically important role.
Amazon has bought Selz, a company that makes tools to help businesses launch their own online stores. Amazon quietly acquired the e-commerce platform on Jan. 15, but it didn’t publicize the acquisition. Selz announced the deal in a company blog post. “We have signed an agreement to be acquired by Amazon and are looking forward to working with them as we continue to build easy-to-use tools for entrepreneurs,” Martin Rushe, CEO and founder of Selz, said in the blog post.
Google Maps is adding a couple of new useful features: the ability to pay for parking or buy a train ticket right from the app. Google Maps is integrating two mobile parking payment services into its app, Passport and ParkMobile. Both offer the ability to find, pay for, and replenish parking meters or parking lot fees through a smartphone app. The ability to pay for parking in Google Maps will be available in 400-plus cities in the US, including Boston, Cincinnati, Houston, Los Angeles, New York, Washington, DC, and more, Google said.
Revolut Business is launching QR codes to facilitate socially distanced payments, the company said on Thursday (Feb. 18). Business owners from all walks of life — cafes, retailers, the trades — can access QR codes on their phones using the Revolut Business app. No external devices are needed. “The popularity of QR codes has increased as this payment method is quick, easy and allows people to make socially distanced payments, which are increasingly important during the global pandemic,” Paulo Guichard, product owner for acquiring at Revolut, said.
Newer, chip-based payment cards are more costly and difficult for thieves to clone, but virtually all cards still store card data on a magnetic stripe on the back of the cards — mainly for reasons of backwards compatibility. This overlay skimmer included a physical component designed to block the payment terminal from reading the chip, forcing the customer to swipe the stripe instead of dip the chip.
A federal judge denied Citigroup Inc.’s request to claw back roughly $500 million it mistakenly paid out of its own pocket to investment firms that made loans to cosmetics giant Revlon Inc. Brigade Capital Management LP and other Revlon lenders can keep the money they collected from Citi when the bank wired them the full amount they were owed instead of the small interest payment that was due, according to a written ruling Tuesday by Judge Jesse Furman of U.S. District Court in New York.
Three North Koreans have been indicted for allegedly taking part in a criminal conspiracy that attempted to steal or extort $1.3 billion in cryptocurrency and cash from banks and other organizations around the world, the U.S. Justice Department announced Wednesday. In a 33-page federal indictment unsealed Wednesday, prosecutors allege that the hackers are part of an elite cyber unit - known as the Lazarus Group, APT38 or Hidden Cobra - within North Korea's military intelligence operation, the Reconnaissance General Bureau.
Retail sales surged 5.3 percent in January, far higher than analysts and economists expected, providing a needed jolt to an economy that showed signs of weakening at the end of last year. The large jump in sales, reflected in data released Wednesday by the Commerce Department, was most likely fueled by the latest round of stimulus checks, which were mailed out at the end of last year. The $600 checks, some easing in virus outbreaks and the increased distribution of vaccines helped send customers back into stores and restaurants last month.
Corporate leaders are more upbeat about the U.S. economy than at any time in the past 17 years, according to a survey released Thursday. The Conference Board measure of CEO confidence, in collaboration with the Business Council, jumped to 73 in the first quarter. That’s up from 34 a year ago during the height of the pandemic and business closures. A reading above 50 reflects more positive than negative responses. “CEOs across industries are planning for life after Covid-19,” Roger Ferguson, vice chairman of the Business Council and trustee of the Conference Board, said in a statement.
The number of Americans applying for unemployment aid rose last week to 861,000, evidence that layoffs remain painfully high despite a steady drop in the number of confirmed viral infections. Applications from laid-off workers rose 13,000 from the previous week, which was revised sharply higher, the Labor Department said Thursday. Before the virus erupted in the United States last March, weekly applications for unemployment benefits had never topped 700,000, even during the Great Recession of 2008-2009.
Discover, a digital banking and payments services company, and Sezzle, Inc., an installment payment platform, have announced an agreement that will allow Sezzle to work with selected merchants on the Discover Global Network in offering consumers additional payment options. This relationship is Discover Global Network’s latest partnership in the buy now, pay later space and Sezzle’s latest partnership with one of the four major card networks in the US market. Select US merchants will be able to offer their customers an interest-free buy now, pay later option through Sezzle’s platform, with little to no upgrades to their existing payments systems.
Bank of America inventors filed 722 patent applications with the United States Patent Office last year, the most in the company’s history. This record came while 85% of the company’s workforce was working from home due to the coronavirus. Separately, the bank was granted 444 patents in 2020, also a company record, during a period when U.S. patents granted overall were down 1%. These milestones reinforce the culture of innovation at Bank of America, which ranked #108 on the recently released Intellectual Property Owners Association’s annual list of organizations.
Payments company Planet has partnered with Cybersource, Visa’s global payment management platform, to launch a new digital payments platform for European merchants. The new service will deliver solutions to merchants across Hospitality, Food and Beverage and Retail sectors to simplify complex digital payments. The digital payments platform will offer access to more global integrations with leading eCommerce platforms and online payment systems, all through Planet. With a wide choice of payment options, consumers can pay in their preferred method and currency wherever they are in the world.
Our environment isn’t “increasingly digital,” it simply is. More consumers are shopping online than ever before, and often making multiple purchases from the same merchants. Whether it’s the game you downloaded last week or the movie you rented on Friday night, when you only see the name of the online store on your statement, and not what you bought, keeping track of purchases can be a challenge. This can be equally challenging for merchants who spend time and resources managing disputes that come from the lack of purchase information available to the consumer, which could have been avoided in the first place.
AffiniPay, the industry leader in professional services payment solutions, acquired ClientPay, the award-winning digital payment solution, to accelerate the adoption of online payments within large law firms. ClientPay will join AffiniPay’s family of market-leading brands including LawPay, designed exclusively to serve attorneys. Together, LawPay and ClientPay will empower large legal and professional services firms to incorporate credit card, eCheck or digital wallet processing into their practices.
As COVID-19 continues to accelerate the shift to digital, more businesses and individuals are now operating in an on-demand world, driven by flexibility, convenience and speed. Digital payments play a critical role in this movement, particularly with regards to work, as employers look for optimized ways to conduct their business and employees look to get paid quickly, conveniently and securely. Visa, the world’s leader in digital payments, and ADP, a leading global provider of Human Capital Management (HCM) solutions, announced a partnership that will offer ADP’s clients, large and small, with a digitally-enabled, convenient and cost-effective solution for off-cycle payments to employees.
ESL Gaming, the world’s largest esports company, today announced that its long-standing relationship with paysafecard, part of the integrated payments platform Paysafe, will continue into 2021 with a partnership that will enhance engagement across flagship tournaments. As an official ESL partner, paysafecard has supported ESL’s Katowice tournament for many years. This year, paysafecard will extend its support to cover IEM Katowice 2021, the National Championships in both Germany and Poland, and ESL Mobile Europe & MENA for the first time in 2021.
BlueSnap, the all-in-one payment platform which helps B2B and B2C businesses around the world increase sales and reduce costs, has opened a new office in Dublin as the fintech firm expands its global operations. Dublin was chosen as the location of BlueSnap's new European headquarters thanks to its reputation as a global hub of fintech excellence, home to leading start-up accelerator programs and technological innovation. The new Irish office was set up to ensure there was no disruption to services as a result of Brexit and will play a leading role in supporting BlueSnap's EU customers.
ACI Worldwide, a global provider of real-time digital payment software and solutions, announced a partnership with Auriga, an omni-channel banking and payment systems provider. Together, the companies will launch a next-generation ATM and self-service banking platform aimed at improving the global omni-channel banking experience for consumers, according to a press release. Under the partnership, ACI's Enterprise payments platform will integrate with Auriga's omni-channel banking solution, WinWebServer.
IRIS CRM is proud to announce a new feature, Add Merchant Data From Residual Import for Non-Integrated Processors. ISO’s merchant data imported via Residual Import may now be analyzed alongside portfolio-wide data, even if the merchant is using a processor that is not integrated into IRIS CRM. ISOs now have the benefit of merchant volume and transaction data at their fingertips for both integrated and non-integrated processors.
Accuity and LexisNexis Risk Solutions announced they are merging operations. Both businesses are RELX companies and leaders in their respective focus areas in the global financial crime compliance sector with complementary solutions. Accuity is part of the LexisNexis Risk Solutions group of companies (LexisNexis Risk Solutions Group). The companies operate in more than 100 countries. LexisNexis Risk Solutions is the trusted data analytics provider for organizations seeking actionable insights to manage risks and improve results, delivering targeted solutions that empower well-informed decisions while upholding the highest standards for security and privacy.
Bluefin is now a Nacha Preferred Partner for ACH Data Security. In becoming a Preferred Partner, Bluefin joins a select group of innovators that Nacha recognizes for offering products and services that align with Nacha's core strategies to advance the ACH Network. "Keeping ACH data secure is a key component of an ACH risk management program, as well as compliance with the Nacha Rules," said Jane Larimer, Nacha President and CEO.
The OLB Group, Inc., a provider of cloud-based omnicommerce and payment acceptance solutions for small and mid-size merchants, announced today its SecurePay payment gateway is now supporting transactions conducted through major wallets that incorporate cryptocurrency as a funding source. Cryptocurrency wallets can be used directly at any point of sale (PoS) utilizing OLB’s OmniSoft cloud-based business services platform solutions.
Aurora Payments, a leading Full-Service Provider (FSP) in the payments industry, is pleased to announce the appointment of Doug Hardman as Chief Technology Officer. Doug oversees Aurora’s technology solutions and software development teams and will directly influence the custom software coming to Aurora in the future. Doug reports directly to CEO, Brian Goudie. “Aurora is committed to best-in-class technology to serve our partners and clients and to that end we are thrilled to have a guy like Doug Hardman leading our technology vision and execution.” said Aurora Payments CEO, Brian Goudie.