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Familiar Names Grace the Upper Reaches of the Latest Strawhecker Merchant Acquirer Directory

Digital Transactions | TSG Market Intelligence Manager, Alex Ferguson

No surprise, the top merchant acquirer by payment volume remains JPMorgan Chase & Co., according to the 2023 edition of Directory of U.S. Merchant Acquirers from TSG, formerly known as The Strawhecker Group.

With volume of $2.15 trillion, Chase retained the top spot last year that it has held since 2005. It had 2021 volume of $1.89 trillion. Rounding out the top 10 acquirers in 2022 are Fiserv Inc., $1.588 trillion; FIS Inc., $1.587 trillion; Wells Fargo Merchant Services, $722 billion; Bank of America, $507 billion; Elavon, $404 billion; Global Payments (excluding TSYS, ProPay, and EVO Payments), $395.5 billion; Adyen, $392 billion; Stripe, $320 billion; and TSYS, $237.7 billion.

Stripe is the sole new entrant to the top 10; it had been ranked 12th in 2022 directory. It replaced Heartland Payment Systems, another Global Payments unit, that had been 10th in the 2022 edition and now ranks 11th.

“Vertical specialization could be an area of focus,” says TSG’s Alex Ferguson of how acquirers could compete.
The total processing volume among the top 10 acquirers in the 2023 Directory of U.S. Merchant Acquirers $8.8 trillion. The combined volume for the remaining 202 acquirers in the directory was less than double that figure, for a total of $3.3 trillion.

Though the behemoths dominate up top, that doesn’t mean there is not plenty of opportunity for other acquirers to carve out their share of processing volume, says Alex Ferguson, market intelligence manager at TSG, an Omaha, Neb.-based payments advisory firm.

Being an able competitor likely entails providing merchants something unique, such as catering to a vertical niche, deft customer service, or offering a unique product, he says.

Acquirers that offer “white glove” service or make salespeople available in person might have an edge over acquirers that interact with merchants mostly online, he says. Customer support, for example, took on more importance during the pandemic because many merchants were adapting to more digital transactions and needed new equipment and training. “That’s something a small or regional independent sales organization could [use to] prove their value to merchants,” Ferguson says.

Catering to niche verticals or merchant needs also can help acquirers, he says. TSG has noticed that some have had success with surcharging, which can help merchants recover some of their payment processing costs. “It’s been kind of a sweet spot they use to prove to the merchant they can come in cheaper,” Ferguson says.

Another strategy is vertical specialization, such as learning about chiropractor practices and their payment needs. “Vertical specialization could be an area of focus,” he says, citing specific verticals like business-to-business payments or subscription management. “It’s something not every ISO could serve equally.”