On Monday (8/01) Global Payments announced that it would acquire EVO Payments in a deal valued at $4B. In light of this announcement, TSG experts have prepared a brief analysis focusing on several key topics: ISV and B2B inroads, new geographic markets, technology considerations, and cash availability/growth goals. download →
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PayPal shares rose as much as 13% in extended trading on Tuesday after the financial services firm issued stronger-than-expected second-quarter results. During its earnings presentation, PayPal said it had entered into an information-sharing agreement on value creation with Elliott Management. “As one of PayPal’s largest investors, with an approximately $2 billion investment, Elliott strongly believes in the value proposition at PayPal,” Elliott managing partner Jesse Cohn was quoted as saying in the presentation.
“I’m very pleased with the strong financial results we delivered this quarter,” said Gary Norcross, FIS Chairman and Chief Executive Officer. “These results are a testament to the value we bring to our clients by executing our business strategy, investing for growth and bringing innovative and end-to-end offerings to market. In an uncertain macro environment, the durability of our financial model is also a significant advantage for FIS. We reduced our leverage to 2.9 times, and our robust free cash flow allowed us to return approximately $600 million in capital to shareholders during the second quarter through share repurchase and dividends.”
Shift4 Payments Inc. has long made no secret of its plans to expand the size of merchants it serves, but early on Thursday its chief executive made the company’s overarching strategy crystal clear following recent signings of such international clients as Time Inc. and SpaceX’s Starlink satellite business, along with major-league sports stadiums. “For 18 years, we served incredibly small customers, and it was a service burden on the company,” said Jared Isaacman, who also founded the Allentown, Pa.-based processor.
Goldman Sachs said that its credit-card business is being investigated by the Consumer Financial Protection Bureau over a range of billing and payments practices. The bank disclosed the probe in a quarterly filing on Thursday, saying that regulators were examining its “account management practices, including with respect to the application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.”
Rêv Worldwide, Inc., an international fintech company, and Global Payments, a leading worldwide provider of payment technology and software solutions, announced that Rêv, in partnership with funds advised by Searchlight Capital Partners, L.P. (“Searchlight”), has entered into a definitive agreement to acquire the Netspend consumer business from Global Payments in an all cash transaction valued at $1 billion. The acquisition brings back Netspend’s founders, Roy and Bertrand Sosa, who also founded Rêv.
Eight national trade groups—including the American Bankers Association, Consumer Bankers Association, Credit Union National Association, Housing Policy Council, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, National Bankers Association, and The Clearing House Association—petitioned the Consumer Financial Protection Bureau to initiate a rulemaking that will strengthen the privacy and security of consumer financial data held by fintechs, Big Tech and data aggregators.
I arrived at the RetailNOW 2022 venue in Orlando two days before the show’s official July 24 kickoff and was immediately greeted by a leading retail IT VAR congratulating me on a successful event. As you can imagine, I was perplexed – we were still 48 hours from welcoming approximately 1,500 attendees to the Gaylord Palms. The VAR explained the event was already a win because he identified at least three dozen new vendors on the show floor map who could help his company add new products and services, increase recurring revenue, appeal to new prospects, and become stickier with current merchants.
Robinhood CEO Vlad Tenev said the "deterioration of the macro environment" — notably decades-high inflation coupled with a cryptocurrency crash — has reduced the company's customer trading activity and assets under custody. In its second-quarter earnings report, also released Tuesday, the company showed a 44% drop in revenue from a year ago. Robinhood's monthly active users in June decreased by more than 7 million, or 34%, and that assets under custody have dropped by more than $37 billion, or 37%, from the second quarter of last year.
BlackRock Inc. is partnering with Coinbase Global Inc. to make it easier for institutional investors to manage and trade Bitcoin, taking the world’s largest asset manager into a cryptocurrency market hammered by plunging prices and government investigations. Coinbase surged 15% to $92.61 at 1:20 p.m. in New York. The partnership with BlackRock provides some relief for the biggest US crypto-trading platform, whose stock had lost more than two-thirds of its value this year through Wednesday.
The tumbling valuations of consumer-facing “buy now, pay later” companies in public and private markets suggest investors are losing confidence in the sector. Who can blame them, in a tottering economy? But some investors are still bullish on pay-later — if the customers are other businesses. Business-to-business “buy now, pay later” startups are on the rise, and it’s clear why.
We’ve learned more about how to sell anywhere under any conditions in the past two years than in the prior 20, and more of that learning is appearing in the field as merchants turn to forms of conversational and embedded commerce to capture sales in the moment, in any channel. The latest news in this area is the launch of a text-to-buy solution built with Shopify’s Shop Pay accelerated checkout technology, launched in 2017 and rolled out to other platforms in 2021.
Kontempo, a startup offering buy now, pay later (BNPL) and interest-free installment plans to business-to-business (B2B) customers, announced that it raised a $30 million seed round in a mix of equity ($6.5 million) and debt ($25 million). CEO and co-founder Matthew Meehan tells TechCrunch that the new cash will be used to hire staff, grow Kontempo’s merchant network and further develop the technology underlying its platform.
Despite two consecutive quarters of decline, the U.S. economy still does not appear to be in a recession and remains unlikely to enter one this year, National Retail Federation Chief Economist Jack Kleinhenz said. “Back-to-back contractions have heightened fear of a recession, but while the economy has lost momentum heading into the second half of the year, economic data is not yet consistent with a typical recession,” Kleinhenz said.
As inflation takes a toll on Americans' wallets, coffee lovers don't seem to be pulling back on their Venti iced cold brew with extra cold foam and two pumps of brown sugar syrup. It's quite the "opposite," according to Starbucks CFO Rachel Ruggeri. "What we saw this quarter is the highest number of customer counts that we've ever seen, and the highest average weekly sales that we've ever seen," Ruggeri said. Starbucks' fiscal third-quarter report surpassed expectations, with consolidated net revenues spiking 9% to a quarterly record of $8.2 billion.
The retail industry dominated global headlines again in July, with supply-chain problems in California, layoffs at Shopify, and dire profit warnings from Walmart. But amid the chaos are some exciting moves by the industry’s top dogs. Amazon’s SVP of Global Corporate Affairs Jay Carney, who formerly served as White House Press Secretary under President Barack Obama, is heading to Airbnb, where he’ll be the global head of policy and communications. Gap CEO Sonia Syngal is stepping down, and the executive chairman of the company’s board, Bob Martin, will serve as interim president and CEO.
Live shopping events on Facebook are going to do a disappearing act. The social media network said it is shutting down its live shopping feature and shifting its focus to Reels. The company announced the news in a blog post in which it said that, starting on October 1, “you will no longer be able to host any new or scheduled Live Shopping events on Facebook.”
The Federal Trade Commission took action against payment processing company First American Payment Systems and two of its sales affiliates for trapping small businesses with hidden terms, surprise exit fees, and zombie charges. The FTC alleges that the defendants made false claims about fees and cost savings to lure merchants, many of whom had limited English proficiency. Once merchants were enrolled, the defendants withdrew funds from their accounts without their consent, and made it difficult and expensive for them to cancel the service.
A pair of crypto hacks totaling nearly $200 million in losses and probably affecting more than 10,000 users has prompted worry in an industry already unsettled by falling prices. On Wednesday, Solana, a popular blockchain and token, said that some wallets that held its assets had been breached. At least 7,700 such wallets are believed to be affected, the company said, while London-based blockchain-analysis firm Elliptic put the amount stolen at $5.2 million in crypto, which includes Solana tokens and the stablecoin known as USD Coin.
An area in payments that has been heating up over the past year and a half is the handling of credit card payment disputes, AKA chargebacks. Four chargeback mitigation solutions have been acquired in the last 18 months: Chargehound by PayPal, Chargebacks.com by Sift, ChargebackOps by ClearSale and last week Midigator by Equifax. The timing of the Midigator deal, rumored to be in the low nine figures, could not have been better.
The era of the kinder, gentler CEO is fading. Corporate chiefs who spent much of the pandemic patiently answering questions in town halls, sending reassuring notes to staff members and projecting a softer image are shifting their tone as signs emerge that the economy is worsening. The CEO of Google’s parent company told staff last month to work with “greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days.”
According to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, U.S. retail spending excluding automotive increased +11.2% year-over-year in July, while retail sales excluding automotive and gas rose +9.0%. Notably, e-commerce sales were up 11.7% YOY, a sharp increase after months of softer growth. Rising prices—particularly for necessities such as food and fuel—were a contributing factor, as Mastercard SpendingPulse reflects nominal spending and is not adjusted for inflation.
The number of available jobs in the US shrank considerably in June, according to new data released Tuesday by the Bureau of Labor Statistics. Job openings dropped to 10.7 million in June, down from a revised 11.3 million in May, according to the latest Job Openings and Labor Turnover Survey, or JOLTS. That's the lowest level since September 2021 but still above pre-pandemic levels of 7 million.
Paysafe, a leading specialized payments platform, today announced the appointment of Rob Gatto as Chief Revenue Officer (CRO). As the company’s first CRO, Gatto is charged with spearheading Paysafe’s international sales function across a range of high growth sectors including gaming, travel and entertainment, and the crypto and fintech industries. Effective immediately, Gatto reports into Paysafe’s CEO, Bruce Lowthers, who joined the company in May.
Repay Holdings Corporation, a leading provider of vertically-integrated payment solutions, announced the addition of Michael Cottrell as Senior Vice President, Clearing & Settlement. In his new role, Cottrell will focus on growing and scaling operations, integrating processing technologies via mergers and acquisitions, and enhancing the offering of REPAY’s Clearing & Settlement platform. Throughout Cottrell’s career, he has served in various roles that have equipped him with extensive knowledge of the fintech and payments industry.
American Express announced American Express Global Pay – a new digital solution that enables U.S. businesses to securely make domestic and international business-to-business (B2B) payments. Through this new digital solution, business customers can send payments funded from their business bank account to their suppliers in more than 40 countries, across a range of currencies, using a simple, mobile-friendly platform.
Nuvei Corporation, tomorrow’s payment platform, announces that it has partnered with Selina, the fast-growing experiential hospitality brand targeting the remote worker and digital nomad. Nuvei is Selina’s payments provider offering local card acquiring services in Europe and Israel, and soon also in multiple territories including the US, Latin America and Australia. The addition of alternative payment methods is also on the roadmap for delivery in 2022.
Mindbody, the leading technology platform for the wellness industry, announced the appointment of Fritz Lanman as its new Chief Executive Officer, effective September 3, 2022. Lanman, a seasoned wellness and technology executive who has a proven track record of growth and innovation will succeed Josh McCarter, who will transition to the Mindbody Board of Directors.
Kompliant, a startup delivering an “AI-driven” business onboarding and risk scoring platform, today announced that it raised $14 million in a seed round led by Level One Fund with contributions from former Visa president John Partridge and Current CEO Stuart Sopp. The funds will be put toward supporting Kompliant’s product development, CEO Edward Katzin told TechCrunch, as well as expanding the company’s customer base and hiring additional team members.
Payments provider Plastiq Inc. has agreed to go public via a merger with Joseph Sambuco’s blank-check firm. Plastiq’s tie-up with Colonnade Acquisition Corp. II will create a company with a value of about $480 million, including debt, according to a statement Thursday. Founded in 2012, Plastiq offers payments services to small and midsize businesses.
Microsoft has also selected Nexi as its primary digital payment provider for e-commerce acceptance in Italy, Denmark, Sweden, Norway and expand to other countries in future. Nexi will leverage Azure Cloud solutions to enhance its own platforms with increased innovation, agility, efficiency, cybersecurity and data protection, particularly with the Data Center Modernisation and Consolidation scenarios and particularly the Italy North data centre region cloud services when made available.
Amdocs, a leading provider of software and services to communications and media companies, announced its collaboration with ACI Worldwide, a leader in mission-critical, real-time payments software, to integrate Amdocs' Vindicia capabilities with ACI Speedpay. The agreement between Amdocs and ACI Worldwide will enable subscription merchants to integrate a turn-key solution to reduce time-to-market, improve retention, decrease costs and simplify subscription management.
Paystand, the leader in blockchain-enabled accounts receivable and B2B payments, announced the acquisition of Yaydoo, the leader in accounts payable, cash flow management, and liquidity solutions in Mexico and LATAM. The deal represents one of the biggest technology unions in Mexico and LATAM and makes commercial blockchain-based solutions more accessible across the Americas.
Splitit announced letus has selected Splitit to bring its Installments-as-a-Service to its cloud payment platform for the property rental market, allowing tenants to pay expenses in several interest-free installments on their credit card. The collaboration brings a first-of-its-kind payment option to letus's award-winning cloud payment platform for property managers and owners. Tenants can spread the costs of expenses such as rent or security deposits over several monthly installments on their preferred credit cards with no additional interest charges.
