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TSG Press
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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TSG Press
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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TSG Press
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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TSG Press
Jul 2016

TSG in ISO & Agent: Merchant Cash Advance - Competition Heats Up

Even though it is more expensive than other types of funding, merchant cash advance has seen steady growth as a small and mid-sized business financing option, particularly after financial institutions tightened their lending purse strings in response to the financial crisis. The Strawhecker Group estimates that merchant cash advance is now a $6 billion annual industry, up from about $4 billion just a few years ago, notes Jared Drieling, Business Intelligence Manager, with the Strawhecker Group.

“Merchant cash advance is growing at a strong clip,” says Driel- ing. “Small businesses that were either turned down by tradi- tional banks or found that the loan process was too lengthy are turning to cash advance.”

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TSG Press
Jun 2016

TSG in WSJ - ‘Brexit’ Leaves Europe’s Fintech Firms in the Lurch

Europe’s financial-technology upstarts are scrambling to figure out what the United Kingdom’s departure from the European Union and its digital payments rules means for their businesses.

“The U.K. will no longer be required to implement or follow any EU payments legislation, which could clearly impact the payments environment,” wrote analysts at The Strawhecker Group, a payments research firm.

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TSG Analysis
Jun 2016

Quick Take: What Does Brexit Mean for Payments?

Commentary by Mike Strawhecker & Jared Drieling

Now that the British public has voted to exit the European Union (EU), the UK will no longer be required to implement or follow any EU payments legislation which could clearly impact the payments environment. What will happen to the Single European Payments Area (SEPA)? Will the UK still follow the EU payment initiatives such as the Payment Service Directive (PSD2), interchange fee regulations (and the common interchange fee (MIF), money laundering rules or the Directive on Transparency and Comparability of Payment Account fees?

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Related: Brexit Vote Bashes U.S. Payments Companies; Long-Term Effects Unclear

TSG Press
Jun 2016

TSG in Transaction Trends

  • Managing EMV Expectations
    • October 1 wasn't a deadline; it was a starting point. We asked ISOs, acquirers, and other payments professionals for their views on the chip card implementation process to date. Read More

 

  • EMV: Where the Merchants Are
    • From the merchants' perspective, the EMV transition has been less than perfect. While the big and very small are handling the shift to chip cards, it's slow going for mid-sized merchants, according to retail groups. Here's why. Read More

TSG Press
Jun 2016

Now Available: Subscription/Recurring Market Analysis & Directory

TSG's new market analysis of independent software providers (ISVs) contains a detailed look on the subscription/recurring revenue industry. This includes a high-level analysis on the market, merchant acquiring performance metrics, and a directory of 34 ISVs.

Did you know that you should be penetrating this market?

  • There were more than twice as many card-accepting merchants within the Continuity/Subscription market (MCC 5968) in 2015 compared to 2014
  • Based on the Forbes Top 2000, an estimated 35% of the companies generate revenue via a subscription model

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TSG Press
Jun 2016

TSG in Digital Transactions: Harbortouch Swaps Private-Equity Partners in Deal Valued at $500 Million-Plus

Analyst Jared Drieling, business-intelligence manager at The Strawhecker Group, an Omaha, Neb.-based payments consultancy, suggests Harbortouch could one day offer an expanded line of so-called smart POS terminals, which run on apps that include payments but also a wide range of other business-management functions.

“Smart terminals are a hot item for ISOs to go out and sell,” Drieling tells Digital Transactions News. “This [new investment] is an opportunity to grow and take market share away from the smart-terminal players in the market. It’s a window of opportunity for Harbortouch, which is why it’s seeing increased interest from investment companies. [For acquirers], it’s all about adding value-added relationships to create that sticky relationship. If you can provide a smart terminal with value-added services, that becomes pretty sticky [and attractive to investors].”

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TSG Press
May 2016

TSG in WSJ: More Chip-Card Headaches, This Time for Merchants

A few weeks ago, a woman used a counterfeit card to buy $400 worth of gift cards at a Harps grocery store—and then hit nine more stores in quick succession after the first attempt worked, sticking the regional grocer with a tab for $4,000 that previously would have been absorbed by the card-issuing bank.

“We’ve seen a significant uptick,” says Mike Thurow, vice president of store systems for Harps Food Stores, referring to counterfeit-card costs. The chain, which operates 80 stores in Arkansas, Oklahoma, Missouri and Kansas, aims to start processing chip transactions within the next couple of months.

Chargebacks among small and medium-size merchants rose 15% in the fourth quarter from a year earlier, according to a recent survey by The Strawhecker Group, a payments consulting firm. The industry believes the volume of chargebacks has likely risen since then, because the fourth quarter included only a few weeks under the new rules and it often takes a while for the costs to flow through to merchants.

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