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TSG Press
Apr 2016

TSG In Huffington Post - Slow EMV Credit Card Payments Could Get Faster

Most of the new EMV card readers are also designed to accept mobile wallets, such as Apple Pay, Samsung Pay and, my personal preference, Android Pay. These payment methods are speedier than card-based EMV payments and just as secure.

They are slowly becoming mainstream: About 28% of smartphone owners surveyed said they had used mobile payments in the 12 months prior to the survey, according to a 2015 study from the Federal Reserve. Digital marketing firm eMarketer projected the value of mobile payment transactions to increase by 210% in 2016.

“There’s somewhat of a perfect storm brewing,” says Jared Drieling, a manager at The Strawhecker Group. “I think with the EMV process of having a consumer insert or dip that card, and the whole process taking a little longer, it essentially lowers the bar now for mobile wallets to take off.”

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TSG Analysis
Apr 2016

TSG Commentary on Transact 16

This week, the Electronic Transactions Association (ETA) held Transact 16 in Las Vegas. The event was host to over 4,000 attendees, 200 exhibitors, and countless announcements.

The Strawhecker Group (TSG), a Gold Sponsor, was present at the show. Afterwards, the team put together commentary to summarize key topics heard at Transact 16:

  • EMV Chargebacks
    • While talking to major acquirers at Transact, the conversation has shifted over the past six months from EMV compliance to EMV related chargebacks. As TSG reported, overall chargebacks increased 15.3% in bank card $ volume YOY and 30.9% of bank card transactions. This topic certainly dominated conversations with some large acquirers as they are attempting to determine the root cause of this increase which is not only increasing expense, but also merchant complaints. More to come on this issue as additional data is analyzed.
  • Big Transactions
    • TransFirst is TSYS – was apparent at Transact with the two companies sharing booth space as well as a new management team, after the transaction closed on April 1. Several TSYS clients commented that it will be an interesting transition for the company.
    • Global Payments’ acquisition of Heartland closed on Thursday, April 21. With both Bob Carr and Bob Baldwin set to retire, the industry is losing two very influential participants that have made an impact.

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TSG Press
Apr 2016

TRANSACT 16 Special Report: U.S. Economic Indicators

The Electronic Transactions Association, in partnership with The Strawhecker Group, is pleased to release this special report on the U.S. economy, focused within the context of the electronic payments ecosystem. This report is a member benefit provided to the ETA's 500+ worldwide member companies.

ETA Member Login
Please login and navigate to 'Member-Only Content' to download Economic Indicators. Forgot your password? Click here.

Report Highlights:

  • The electronic payments industry is strong:
    • U.S. consumer spending via electronic payments methods continues to be very strong at a 9% CAGR, driven by organic growth of the economy as well as consumer usage and merchant acceptance of credit and debit cards
    • Payments companies continually outperform ‘the market’ with a 22% CAGR versus 8.7% for the S&P 500  
  • The electronic payments industry is attractive:
    • Nearly $100 billion was invested into the payments ecosystem globally in 2015; certain payments sub-categories are receiving more attention from investors than others including mobile payments, eCommerce, and security & data analytics
    • The payments industry is a highly active M&A marketplace, especially for merchant acquiring companies, with the average net revenue multiple being 3.9 times annual net revenue. However, the data also shows that multiples drastically vary based on company characteristics.

TSG Press
Apr 2016

The Strawhecker Group Celebrates Ten Year Milestone

“I wanted to own my own business, and I saw a need in the market,” said Kurt Strawhecker, Founder and Partner at The Strawhecker Group (TSG). This was in 2006, when he and Jamie Savant launched TSG, a consulting firm focused on the global payments industry. Ten years later, their business has grown and the industry has evolved, however their core principles have remained the same.

“Being a boutique consulting firm with such a specific offering provides us, and in turn our clients, an advantage,” said Jamie Savant, Co-Founder and Partner. “Our team is made up of payments experts averaging over 20 years of experience, so we are more efficient and higher value than a big five consulting firm, because we have seen so much of it before.”

TSG Turns Ten: 10 Quick Facts

1. TSG has completed thousands of projects for over 550 companies, from fintech startups to Fortune 500 companies

2. The average TSG Associate has 23 years of payments industry experience

3. TSG has advised on 27 successful acquisitions and investment transactions

4. TSG has completed over 170 financial valuations of payments companies

5. Clients of TSG have often experienced ROIs on their TSG consulting investment of over 50:1

6. TSG was honored as Business Partner of the Year by the Electronic Transactions Association in 2010

7. TSG’s unique analytics data warehouse contains over 3.5 million merchants representing more than 40% of all merchants in the US processing nearly $1 Trillion in annualized credit and debit card volume

8. TSG often speaks on industry trends and has been quoted recently in national media, such as: The New York Times, The Wall Street Journal, USA Today, Yahoo! Finance, CNBC, and Forbes

9. TSG has produced over 150 payments industry specific eReports (whitepapers) and analyses

10. NewsFilter, TSG’s weekly payments industry digest, celebrated its 500th edition this month and was distributed to over 40,000 Fintech professionals

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TSG Analysis
Apr 2016

Chargeback Uptick in the SMB Market

Some payments companies have been mentioning increases in chargebacks since October 1st. This appears to be true, according to The Strawhecker Group's merchant level database of more than 3.5 million card accepting merchants. The charts illustrate that there were increases in chargeback rates in the SMB market for both transactions and dollar volume throughout much of 2015 with the greatest acceleration occurring in Q4 2015.

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TSG Press
Apr 2016

Press Round-Up: EMV Merchant Adoption Slower Than Expected [Updated]

TSG recently released survey results that estimate 37 percent of U.S. merchant locations are EMV-ready four months after the October 1st, 2015 liability shift. See below for a round-up of media coverage from digital and print publications:

TSG Press
Apr 2016

Using Chip Versus Swiping With Credit Cards - WTSP TV

Months after a credit card industry deadline for retailers to help keep your financial data safer, research is showing many stores haven't updated their credit card readers.

“Our survey is showing only around a third of retailers have made the transition,” said Jared Drieling
Business Intelligence Manager for consulting firm The Strawhecker Group.

A credit card industry deadline of Oct. 1 to begin using the new EMV chip-enabled credit cards shifted liability for credit card fraud from the banks to the retailers.  Still many large and small retailers are still swiping their credit card transactions.  The result, is confusion for shoppers whether to swipe or “dip” their card and millions of transactions at a higher risk for fraud.

Watch the video

TSG Press
Apr 2016

The Strawhecker Group's 500th Edition of NewsFilter

It is hard to believe TSG has been publishing NewsFilter for over 9 years. Over those 500 weeks we have shared over 15,000 articles related to the ever-changing Payments Industry. From interchange to consolidation, data breaches to EMV, and mobile payments to bitcoin, the industry continues to evolve...as does TSG's NewsFilter. To celebrate our 500th edition, we have revamped NewsFilter to deliver a more modern, crisp, reading experience. In addition, NewsFilter is now more mobile-friendly than ever. Enjoy!

Subscribers: You are the reason we have reached this milestone! Thank you for your continued support, feedback, accolades, and readership. We will continue to evolve with the industry and provide you with the most relevant content to help you succeed in the Payments Industry.

Check out this week's edition.

TSG Analysis
Apr 2016

TSG Mini Report: Average Life of Merchants Processed by 3rd Party Processors

Q: How long do merchants live that are processed on 3rd party processing platforms?  And of these, which merchant types live the longest?

A: TSG completed an analysis utilizing its merchant database of 3.3 million merchants to answer this question. Check it out here.

Assumptions & Definitions:

  • The analyzed dataset included
    • Merchants sold by ISOs that utilize 3rd party processors (as opposed to having “in-house” platforms)
    • Merchants that had between $500 - $500,000 annual volume (the ISO “sweet spot”)
    • Time period: 2012 – 2015
    • Average life = First month of revenue ISO to last month of revenue to ISO

TSG Analysis
Apr 2016

Now Available - Payments Industry Brief: Size Indicators of the Electronic Payments Industry

This report offers a high-level look at the revenues and volumes of the major sub-markets within the electronic payments industry.The report includes sections on the Payments Industry size by revenue, volume, and concentration.

TSG completed these estimates by using a variety of sources and methods including revenue metrics from TSG's AIM data warehouse, TSG industry records and research, annual reports, data aggregation sources, and TSG Associate knowledge and analysis.

Check it out.