TSG eReport: Payments Industry 201 eReport...Merchant Payment Facilitator/ISV ISO/Acquirer/Processor...
Transcript of TSG eReport: Payments Industry 201 eReport...Merchant Payment Facilitator/ISV ISO/Acquirer/Processor...
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TSG eReport: Payments Industry 201
PREVIEW
The Payments Industry 201 report provides a detailed look into industry nuances, overlapping roles, and trends reshaping the current and future landscape of payments.
TSG’s 201 report covers the following topics: • Transaction flow – card present and card not present• Payments ecosystem and the blurred lines of participants• Emerging trends and technology themes• A detailed look at independent software vendors (ISVs) and payment facilitators• Payments glossary
Combined, TSG’s Payments Industry 101 and 201 reports provide a comprehensive understanding of the current state of the industry, participants, roles, and key trends. TSG’s Payments Industry 301 will cover the future of payments. For more in-depth research, please contact: [email protected].
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Payments 201 - PREVIEW
Overview – Payments Industry 201
Table of Contents - PREVIEW
Overview of Key Payments Trends 4
Life of a Transaction –Card Present and Card Not Present
6
Blurred Lines Within the Payments Ecosystem 10
Emerging Trends and Technology Themes 12
Independent Software Vendors and Payment Facilitators
21
Payments 201 Summary 34
Payments Industry Glossary 36
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Life of a Transaction – Card Present - PREVIEW
With card present transactions, the cardholder swipes or inserts a card when making a purchase and the transaction typically takes place at a store’s physical location.
Payment network remit funds to the acquiring bank.
If authorization occurs, the issuer withdraws and
remits funds through the payment network.
Acquiring bank credits merchant’s account, net of fees paid to the issuer, payment network and acquirer.
Merchant submits transaction information to acquirer, either directly or through an ISV or payment facilitator.
Acquirer transmits transaction, via processor, to
the appropriate payment network.
Payment network direct transaction to the respective
issuer for authorization. Authorization is sent to merchant via acquirer.
Authorization
Settlement
$
$
Consumer
Merchant
Merchant Payment network IssuerISO/Acquirer/ProcessorPayment Facilitator/ISV
For illustrative purposes only. Please reference the payments industry glossary for definitions, page 36.
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Payment Facilitators - PREVIEW
How does the payment facilitator model work?
Merchant agreement: The merchant agreement is between the acquirer and payment facilitator. The payment facilitator holds a merchant identification number (MID) with the acquirer and boards sub-merchants under this MID.
Settlement: When transactions are settled, the acquirer transfers funds to the payment facilitator.
Sub-Merchant
Acquirer
Payment FacilitatorSub-Merchant agreement: The sub-merchant agreement is between the payment facilitator and sub-merchant. The payment facilitator can board sub-merchants much quicker utilizing their already established merchant identification number, as they take on the sub-merchant risk.
Settlement: When transactions are settled, the payment facilitator transfers funds to the sub-merchant.
For illustrative purposes only
3.7+ MillionU.S. MERCHANTS IN
TSG’S ANALYTICS PLATFORM
40+OF THE TOP 50
ACQUIRERS SERVED
1,000+CLIENTS ADVISED
23+ YearsAVERAGE ASSOCIATE
EXPERIENCE
29ACQUISITIONS/
INVESTMENT TRANS
Management Consulting | Analytics & Research | Buy/Sell Advisory | eReports
The Strawhecker Group (TSG) is a fast-growing analytics and consulting firm focused on the electronic
payments industry. The company serves the entire payments ecosystem, from fintech startups to Fortune
500 companies. The firm provides its clients with advisory services, research and analytics to help them plan
and execute their strategic initiatives. Based in Omaha, a recognized payments industry hub, TSG is an
established leader in this high-growth, ever-evolving space.