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Priority Technologies Holdings Inc. says that just like other merchant acquirers its payment volumes are taking a hit as consumers and businesses hunker down in reaction to the corona virus. But its chief executive insists Priority’s diversified business model provides insulation from the pandemic’s worst effects.
Overall processing volumes for the last two weeks of March are off 18% from year-earlier levels, executive chairman and CEO Thomas C. Priore said Tuesday, and he cautioned the drop-off “will be larger in April.” On-premises volumes at hospitality merchants are down close to 50%. “Our other segments are off substantially less,” Priore said on a conference call to review the company’s fourth-quarter 2019 results.
The mid-March brick wall Priority hit followed payment volumes in January and February that Priore called “the strongest in our history,” with each month surpassing $4 billion for a 14.7% year-over-year increase. Even as the virus, or Covid-19, began to affect spending in the first part of March, Priority still expected a month with $3.7 billion in volume, which Priore called “a manageable 7% decline from March 2019 and the run rate from January and February 2020.”
But Priore pointed out some of his company’s merchant segments are holding up well and are poised for future growth, particularly rental payments, integrated payments, and software-based services such as order-ahead and curbside pickup, along with automated payables processing.
Alpharetta, Ga.-based Priority entered the rental-payments business through acquisitions, including its 2019 acquisition of assets from YapStone Inc., a major player in electronic payment services for property managers. Sixteen new property managers representing over 30,000 units are now using Priority services, and more than 35 existing property-management clients representing 150,000 units “have been extending digital rent payments further into their rental networks,” Priore said.
Priore also said his company has signed 4,720 new merchants this month, in line with its historical average of 4,500 to 5,000 new merchants per month. He didn’t state Priority’s attrition rate.
Back in the halcyon days of 2019, Priority processed merchant bank card volume of $11 billion in the fourth-quarter and $43 billion for the full year, up 16.2% and 12.7%, respectively. Ninety-eight percent of full-year volume came from consumer payments, the rest came from the company’s fast-growing commercial and integrated-partners segments.
Priority reported fourth-quarter revenues of $98.2 million, up 10.7% year-over-year from a restated $88.7 million, and net loss of $7.17 million versus a $5.65 million loss in 2018’s last quarter. For all of 2019, the company posted revenues of $371.9 million, down 1.1% from 2018’s restated total, and a net loss of $33.6 million compared with 2018’s loss of $17.9 million.
