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March 25, 2021TSG Press

The Payment Processing Landscape: 10 Key Insights Discovered After Analyzing 325+ Companies

The Strawhecker Group’s Directory of U.S. Merchant Acquirers, sponsored by FIS, is a report that details key business statistics on over 325 of the nation’s payment processing players, that collectively process an estimated 95% of all card payment volume in the country.

When looking at the data inside this report, a variety of insights on the country’s payment processing landscape stand out:

The top five players (JPMorgan Chase & Co, Worldpay from FIS, Fiserv, Wells Fargo Merchant Services, and Bank of America Merchant Services) processed an estimated $5.2+ trillion in card volume in 2020 for over 5 million total merchants.

Adyen and Stripe are fast-growing companies with Adyen cracking the top 10 in processing volume for the first time, with 12th-ranked Stripe closely behind. Both companies are growing at a much faster than rate than most entities surrounding them.

One major change in 2020 was the conclusion of Bank of America and Fiserv’s joint venture, leading to the creation of a new entity owned by Bank of America. The merchants previously under the joint venture were divided amongst Bank of America’s new entity and Fiserv.

Only four of the companies listed in TSG’s directory are estimated to serve more than one million merchants. Stripe appears poised to become the second entity to surpass two million U.S. merchants, soon to join Square which may even pass the three million U.S. merchant threshold in the near future.

Authorize.Net (a Visa solution), is the payment gateway with the most partnerships among the acquirers listed, partnering with 37% of these players.

Four of the top ten players by volume were determined to have 10% or more growth in year-over-year card volume, transactions, and/or merchant clients in 2020.

40% of entities listed sell Fiserv’s Clover point of sale products, pointing to the large presence Fiserv has in the ISO channel.

37% of the players have more than one sponsor bank relationship.

California is the most common headquarter state for the top 25 players, as well as the most common headquarter state for the entirety of the directory.

The top 10 acquirers listed were estimated to be responsible for facilitating over 80% of the total U.S. processing volume in 2020. FIS was one of only two entities that were top 5 in volume, transactions, and merchants.

General Acquiring Market Commentary:

Overall, the acquiring industry has had a difficult and uncertain year under the backdrop of the COVID-19 pandemic. Entities in the payments industry were disproportionately affected compared to others with substantial difficulty faced by acquirers and ISOs with heavy amounts of travel, retail, and restaurant merchants in their portfolio. Entities with diverse portfolios and accessible eCommerce solutions/partnerships benefitted by being ready for the abrupt shift from brick and mortar to virtual selling. The shift to eCommerce selling has been a gradual trend for years, but the pandemic has solidified eCommerce’s unquestioned importance and brought related trends such as contactless payment usage and BOPIS (Buy Online, Pay in Store) to the forefront, likely ahead of its original timeline.

If you have any questions, or if you would like to learn more about this report or related items, please feel free to reach out to The Strawhecker Group’s Market Intelligence team by visiting our contact page.

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