In round numbers, the March 2018 equity values of Square, Stripe and Adyen were $20B, $10B and $5B, respectively. Over the last three months these companies have climbed to even higher valuations of $25B, $15B and $12B, respectively.

That’s remarkable value creation by companies that have been around for just ten years. In that time, each has individually transformed an industry.

Square enabled instant merchant accounts and demystified pricing for small businesses.

Stripe crushed it in ecomm with programming interfaces that delighted developers.

Adyen became the go-to partner for big, global brands who want nothing to do with country-by-country payments spaghetti.

More than anything else, what all of these companies did was make life easy for their customers.

They were able to do so, in large part, because they exercise complete control over the value chain.

Their customer experiences are always delivered via in-house staff and proprietary technology. There are no middlemen who can introduce wildcard costs, delays and dependencies. No way.

It’s the success of this approach that now drives behavior elsewhere.

First Data, TSYS, Worldpay, Chase and Global Payments have all rationalized distribution channels and made acquisitions to better align themselves with the new world order where scale matters, technology trumps relationship, and everything is expected to be Amazon-easy.

There’s no going back.

This shift toward technology and total control by these large, root providers is particularly felt in the U.S. market.

In no other region are there so many middlemen.

Now, the pressures of new age expectations as set by the likes of Square, Stripe and Adyen are changing the lives of these processing intermediaries.

The roll-up of the U.S. ISO channel continues and, soon, third parties in the technology stack will be faced with the same business continuity decisions.

It’s all pretty cut-and-dried, really:

To simply survive, tech providers must facilitate big processing volumes in a way that aligns with processor earnings growth.

To thrive, tech providers must produce unique, compelling value for merchants and share the windfall profits with processors.

If neither is attainable, a tech provider’s work can probably be replicated by a processor at a lower cost and with more control. That means it is probably time to pivot or sell.

The path forward is clear as day.


About RevChip

RevChip is the most comprehensive and affordable EMV-NFC software built for the U.S. market. It connects to major processors without a transaction fee and runs equally on Verifone and Ingenico devices. Using RevChip, merchants eliminate card data from their systems and shrink the burdens of PCI. The RevChip SDK provides POS developers with a quick and thorough EMV integration without the hassles of middleware.

To learn more about how RevChip solves for EMV, Quick Chip and Apple Pay, download our Semi-Integrated EMV Guide or reach us at (800)560-0415.