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Sep 2016

TSG in Digital Transactions - After Striking VeriFone, the U.S. EMV Revenue Bug Hits Ingenico

Jared Drieling, business intelligence manager at Omaha, Neb.-based merchant-acquiring consultancy The Strawhecker Group, says the stocks of both Ingenico and VeriFone started rising in anticipation of the card networks’ October 2015 U.S. point-of-sale EMV liability shift. But beyond EMV hardware sales, neither company has yet realized its full revenue potential in related services, he says, in part because of the certification delays, he says.

But beyond EMV, both companies, despite acquisitions and new services in the pipeline, still trail other acquiring-industry firms that are bringing software-based payment systems to merchants, systems that often use tablet computers coupled with specialized apps, he says. Examples include processor First Data Corp.s’ Clover line and new systems from Poynt Co., according to Drieling.

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Sep 2016

TSG in Digital Transactions: Why Payments M&A Won't Cool Off

The Strawhecker Group, an Omaha, Neb.-based payments-advisory firm, says it has performed “hundreds” of valuations in the past five years. Payments companies remain attractive to investors for multiple reasons. “Payments is [a] growth industry,” says Mike Strawhecker, principal at the firm.

“Payments feed off of organic economic growth and increased consumer usage,” Strawhecker says. He adds that the industry provides services beyond payments to merchants, and has a plethora of salespeople.

Another factor is the fragmentation of the industry, which could favor an investor with a rollup strategy, Strawhecker says.

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Sep 2016

Now Available: Tablet POS (Smart Terminal) Competitive Snapshot

This new eReport serves as a guide to understanding the evolution of the tablet POS market along with the pros and cons associated with a proprietary versus an open system. More importantly, the report provides an analysis on the competitive landscape with a focus on tablet POS offerings by the top acquirers, tablet POS strength by industry and tablet POS strength by feature.

The competitive section identifies 14 top tablet POS players and provides an overview of their customer focus, pricing, associated card processors, cloud-based features along with their associated strengths and weaknesses.

The report can act as a strategic tool at higher levels within your organization to understand the dynamics of each player to assist in partnership planning or for M&A workouts. The report can also be leveraged to educate front-line personnel such as sales teams to enable them to position their tablet solutions more effectively in the market versus the competition.

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Aug 2016

TSG in CNBC: Gas Stations Fight Hackers - But They're Going to Have to Pay for It

Gas stations and convenience stores are some of the last U.S. retailers to make the upgrade to the EMV card platform (some ATMs also have until Oct. 1, 2017, to make the technology switch). Because many hackers have been disrupted by retailers, they have increasingly targeted convenience stores and ATMs lacking the security measures, experts said.

"From a criminal perspective, that window of opportunity is shrinking," said Jared Drieling, business intelligence manager at payment data analysis firm The Strawhecker Group. "There's going to be a rush to get those updated."

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Aug 2016

Now Available: U.S. Merchant Acquiring: Pricing & Attrition Focus

This highly valuable report answers the most pressing questions that surface in the merchant acquiring community.

The report offers expert insight and exclusive data (nearly 25 charts/figures) on several key areas of the acquiring space including:

  • Industry attrition with a focus on the SMB segment
  • Expected future margins for ISOs and acquirers
  • Competition and customer acquisition costs
  • The identification of what merchants are seeking in a payments processor
  • A look at the ISO competitive landscape
  • Analysis on the future interchange fees

All segments have been further sliced and diced by merchant tier size, industry vertical and sales model to provide an unparalleled look into these pressing questions. Data provided is derived from TSG's proprietary data warehouse, which holds over 7 years of data on over 3.5M card-accepting merchants.

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Aug 2016

TSG in NYT: Confused by Chip Credit Cards? Get in Line

There is reason to hope.

About 75 percent of credit cards are chip-enabled. If all businesses upgraded their terminals — which they are not required to do by law — at least the confusion over whether to swipe or insert would be settled.

So far, about one-quarter of the nation’s merchants have made the transition, said Jason Oxman, chief executive of Electronic Transactions Association, a trade group for companies that deal with payment products and services.

But while many of them have the terminals, they are waiting to get them certified for use, said Jared Drieling, the business intelligence manager for the Strawhecker Group, a consulting company for the industry.

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Aug 2016

TSG in the News - Muddy Waters for Chip and PIN Technology, Banks Won't Sign Off

The Strawhecker Group, an electronic payments advisory firm, estimates that the payment processors are on track to have more than 90% of their merchants EMV-ready by 2017 or later. That represents almost 4 million retailers.

Information from some of the nation's top retailers confirms the data. The Walgreen Company began transitioning drug stores to the new EMV technology more than three years ago when it installed new point-of-sale terminals. The upgrade involved about 60,000 POS terminals in 8,200 Walgreens stores.

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Jul 2016

TSG in the News - What PayPal and Visa's Partnership Means

The deal gives PayPal more fuel to expand its footprint into physical stores through the VDEP platform, helping PayPal extend its online payments dominance to physical stores. PayPal has made several efforts to get into the physical payments space over the past several years, says Jared Drieling, business intelligence manager with electronics payments consultancy The Strawhecker Group. “This partnership may help PayPal get into the physical store in a more meaningful way through the mobile device,” Drieling says.

For Visa, the deal is designed to help it reach more consumers. Before PayPal struck a deal with Visa, the payments processing company would encourage its users to deduct payment transactions from their bank accounts (as opposed to credit cards) through the Automated Clearing House system (ACH), which connects financial institutions outside of payment card networks. Fees on ACH transactions are only a few pennies, making them a less expensive transaction for PayPal to process than a credit card transaction, for example. Now, PayPal place equal weight to ACH and checking account options for its users.

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Jul 2016

TSG in the News - Nearly Half of the Largest U.S. Retailers Aren't EMV-ready: Why?

About 45 percent of the largest U.S. retailers aren’t fully compliant with EMV standards, according to a CreditCardForum survey.

In June 2016, we looked at the Top 20 retailers (by volume of sales according to the National Retail Federation) and found that eight still hadn’t completely upgraded their equipment to accept the more secure EMV chip cards.

You can see our full results and methodology here. But the bigger question is: why haven’t these commercial giants upgraded – especially given that the deadline (set by the card networks – Visa, MasterCard, American Express, Discover) was last October? We asked Jared Drieling, business intelligence manager with the Strawhecker Group – which recently did a survey that found 37 percent of U.S. merchants overall had upgraded to EMV.

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Jul 2016

Now Available: EMV Merchant Planning & Strategy Guide

This report (76 pages of detailed information) can act as a strategic tool at higher levels within your organization or can be leveraged to educate and arm front-line personnel such as sales teams when visiting clients who may be encountering EMV issues or be planning to migrate to EMV. 
 
This eReport will:
  • Explain what EMV is
  • Explore the current state of migration in the U.S.
  • Provide a comparison of the U.S. migration to other global experiences
  • Review chargeback trends post-EMV liability shift
  • Provide steps merchants can take to efficiently implement EMV
  • Discuss merchant best practices 
  • Explore merchant obstacles and startegies to overcome those obstacles

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