The Green Sheet Online Edition
May 27, 2013 • Issue 13:05:02
TSGPX outperforms S&P 500
At the 2013 Electronic Transactions Association's Annual Meeting & Expo held in New Orleans, the ETA issued its quarterly analysis of the U.S. economy, which showed that payments industry companies continue to outperform the economy as a whole. The ETA US Economic Indicators Report for the first quarter of 2013, published in collaboration with payments consultancy The Strawhecker Group, said the industry experienced almost 14 times more growth over a six-year span than the overall economy. Jason Oxman, ETA Chief Executive Officer, stated the report shows payments industry trends are looking up as the U.S. economy recovers from the so-called Great Recession.
Report finds payments growth
The report is based on the tracking of a hypothetical $100 investment made in 2007 in a selection of payments industry companies known collectively as the TSG Payments Index. The performance of that "investment" was then compared with Standard & Poor's 500 stock market index, a leading indicator of the nation's economic performance.
The result was that the TSGPX grew 14.2 percent between the first quarter of 2007 and the first quarter of 2013. During the same period, the S&P 500 index grew just 1.6 percent, according to the report.
"This report gives ETA members a deeper understanding of where things stand, both in the industry and the overall economy, so they can better assess business opportunities in the marketplace," Oxman said.
New metric added to report
TSG created a new metric in the report called the Gross Value Profit Index (GVPI). The GVPI shows the value of merchant portfolio revenue streams based on data from 1.6 million merchants in the TSG database, representing about 20 percent of U.S. brick-and-mortar retailers.
The GVPI revealed a merchant portfolio revenue stream growth rate of 21 percent between the fourth quarter of 2010 and the first quarter of 2013. The growth rate during the same period for the TSGPX was 26 percent, while growth in the S&P 500 stood at 6 percent, the report said. "The value of the collective representative portfolio has increased 49 percent since the fourth quarter of 2010," the ETA said in its May 2, 2013, statement. "Of that increase, 19 percent is due to the addition of high performing merchants to the portfolio in the last 12 months."
The report also reviews 80 industry enterprise and merchant portfolio transactions conducted from 2000 to 2012. The ETA said the data demonstrated that "net revenue multiple averages rebounded in 2012, after dropping following the recession." This edition of the ETA US Economic Indicators Report is available in full to ETA member organizations.
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