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The Strawhecker Group Finds Niche Monitoring Payments Industry

Reprinted with permission from the publisher of MBJ Inc. from the February 14, 2020 issue of the Midlands Business Journal. Article by Richard D. Brown

From fintech startups to Fortune 500 companies on five continents, clients of Omaha-based The Strawhecker Group are being offered the consulting expertise and vital decision-making data to successfully operate in the volatile global payments industry. The father-son duo of Kurt Strawhecker — managing partner and board chairman—and Mike Strawhecker — president and partner — is enjoying an annual 20% increase in revenues in an industry where the average is half that.

The Strawhecker Group has grown from 15 to 40 employees over the past decade and recently moved its offices from a 6,500-square-foot suite into 10,000 square feet on the third floor at 11605 Miracle Hills Drive. Satellite offices are located in Sacramento, Denver and London.

Fortune 500 companies served by the 14-year-old firm include JP Morgan Chase, Mastercard and Visa Worldwide. Kurt Strawhecker, an award-winning University of Nebraska at Omaha advertising and photojournalism graduate, started the family-owned firm after employment with First Data (now Fiserv) where he was introduced to entrepreneurship opportunities within the then-nascent credit card/payments industry.

“I tested a concept,” he said simply. The Strawhecker Group is now one of the largest global analytics and consulting firms focused on the payments industry.

Kurt Strawhecker, Managing Partner & Board Chairman

“In one year, we want to be the preeminent firm in our space globally,” said Mike Strawhecker, a three-time championship wrestler at Skutt Catholic and 2006 marketing and management graduate from Bellevue University.

The younger Strawhecker, who ran kid camps for the Chicago Bears and interned for former U.S. representative Lee Terry, said perhaps the biggest asset he brings to the family business is, “I’m the most competitive person you’ll ever meet.”

Kurt Strawhecker and key members of his team were keenly monitoring breaking business news the morning of the Midlands Business Journal interview: swiping a Visa card is about to be more expensive as early as April due to a planned hike in the interchange rate — the amount a business is charged whenever a customer their card.

“It’s one of the biggest changes in about a decade,” he said, noting that while the charge will vary by merchant, the impact can include a major change in how much a consumer is charged at some of their favorite firms — and the type of card they will choose to swipe at the counter.

Kurt Strawhecker, an Omaha native who began his career at First National Bank of Omaha and who later worked for the Ellis & Guy ad agency where back-end work was done for Godfather’s Pizza, an Omaha firm that grew from 40 to 700 locations during his tenure, began an 18-year stint in 1985 with First Data, a credit card electronic processor. He spent three years in England in the early ‘90s when First Data was establishing FDR Limited, a UK division in Brighton, England.

The Strawhecker Group, which closed its first significant transaction in 2009, began a global expansion in 2014 to reach companies on multiple continents. By mid-2015 the firm was providing services to nine out of 10 top merchant acquirers in the U.S.

In 2011, The Strawhecker Group launched Acquiring Industry Metrics, an innovative industry-wide performance platform.

“We had launched an industry first,” he said. An assessment done in April 2018 found that payment companies realize more than $500 in additional revenue per merchant by utilizing AIM.

Kurt Strawhecker said the introduction by his firm of Gateway Enterprise Metrics, an industry first and five-year-old platform offering gateways to benchmark uptime, transaction time and decline rates, was an important element in The Strawhecker Group’s growth.

Mike Strawhecker, President & Partner

Mike Strawhecker has taken the lead in overseeing the development, design and creation of the platforms and other technological tools led by a 20-person development and sales team operating out of Omaha.

“I learned from GEM that nobody else can do this because of its difficulty,” he said. “The first two years we worked on it were touch and go.”

Projects require investments from as little as $10,000 to hundreds of thousands of dollars, from 50 to 2,000 hours and from as little as two weeks to three months.

Just as the payment industry has designed software for fast food establishments to take credit cards, the younger Strawhecker is confident that software will be developed to enable renters in large apartment complexes to use cards for their monthly rent payments.

“If money can be made off that payment, the apartment complex managers are going to be for it,” he said. “Our technology could help them monitor it and turn it into a new revenue source.”

Kurt Strawhecker said that while the technology can excel in the rent payment function, it could also be used to track leases, pay utility bills, among other functions.

“It could be used in 350 industries in the U.S. from restaurants to optometrists and the merchant could pick the level of depth,” he said.

Software used to collect rent via debit card at multiple building sites, for example, could have a 2.7% transaction charge.

In the future, Strawhecker sees electronic transactions being used for the payment of parking tickets, license taxes, and expanded business-to-business payments.

For example, they said they can work with independent hardware store owners about “frictions” that need to be overcome to get different constituencies on the same platform.

“We can incentivize them and show them how we can make things easier for them,” Mike Strawhecker said.

About a third of The Strawhecker Group’s revenues are generated by market intelligence work. Clients are looking for competitive intelligence on their rivals. The Omaha firm employs seven analysts full-time to keep pulse on relevant news. That division is headed by Jared Drieling, senior director of market intelligence and consulting.

The Strawhecker Group publishes a monthly newsletter, NewsFilter, which goes to more than 45,000 subscribers in the payment industry.

“The Strawhecker Groups’ success has been helped by its uniqueness and focus,” the senior Strawhecker said. “We specialize in one part of the payments industry and we’ve striven to become experts in that part.”

Attracting the needed talent to Omaha and facilitating partnerships with international companies where necessary are other important elements of the firm’s success.

The Strawhecker Group has also used “bootstrap financing” to build its human capital. Those coming on board are told they will get experience and if it works out, they will be given more responsibilities.

For many, Kurt Strawhecker’s offer launched their career’ with the firm.

He even admits using the “I’ll hire you if you can pay for yourself” promise on his son when he was hired 15 years ago.

Recently, The Strawhecker Group rolled out Transaction Watch, a weekly newsletter aimed at cutting-edge payment executives, corporate strategists and private equity groups seeking to learn of the most important and relevant merchant news impacting the industry.

Reprinted with permission from the publisher of MBJ Inc. from the February 14, 2020 issue of the Midlands Business Journal.