Growth in Payments Helps Boost Middle-Market Processors, Too

Payments processors haven’t had it easy in recent years, what with a pandemic-led shift to e-commerce on the part of brick-and-mortar merchants, a deluge of new and more complicated point-of-sale technologies, and growth by industry giants like Fiserv Inc. and Global Payments Inc.

But many of the midsize players grew, too, and some are now reporting stronger financials as consumers flood into stores and merchants wrestle with new point-of-sale technology. On Thursday, two of these players reported a steady rise in quarterly revenue as merchants sought technology to meet consumer demand.

Cantaloupe Inc., a Malvern, Pa.-based specialist in processing for vending and other unattended markets, said it closed out its March quarter with a 12.5% jump in revenue, to $67.9 million, including  $40 million in transaction fees, which represented a nearly 20% increase. It processed $767.4 million in transactions, up fully 17.4%. Its client count rose 11.1%, to 30.670.

These results don’t include Cantaloupe’s $4.75-million deal for Seattle-based Cheq Inc., which closed in the middle of the quarter. That combination gives Cantaloupe entrée into a completely new—and highly competitive—market: stadiums and arenas. That will take the ambitious company far beyond its base in vending machines and pop-up markets.

On the same day, Atlanta-based Repay Holdings Corp. announced an 8% year-over-year boost in revenue, to $80.7 million, and an 81% narrowing of its net loss, to $5.4 million. While the company processes both consumer and business payments, its focus is largely on consumer transactions, which accounted for $76.1 million in revenue.

Repay was one of the payments industry’s early adopters of the SPAC trend that took hold during the pandemic. It began trading on the Nasdaq in July 2019 through a merger with Thunder Bridge Acquisition Ltd. SPACs, or special purpose acquisition companies, are set up by investors as pubic companies for the sole purpose of acquiring privately held entities in a move that some see as a quicker and more efficient route to public ownership.