Merchant processor Priority Technology Holdings Inc. posted an 11% increase in payment volume in the third quarter despite the wind-down of its once-sizable processing business for online subscription billers.
Alpharetta, Ga.-based Priority said it processed $10.8 billion in merchant bank card volume versus $9.71 billion in 2018’s third quarter, on 132.1 million transactions, up 9.2% from 120.9 million. Consumer payments accounted for 98% of this year’s volume, or $10.6 billion.
The payments generated merchant fees of $101.7 million, up 7.2% from $94.9 million a year earlier. Revenues from online subscription billers totaled only $1.2 million compared with $11.7 million in 2018’s third quarter and their peak of $36.7 million in the final quarter of 2017. Priority greatly scaled back its subscription-billing business in the face of tighter disclosure and consumer opt-out regulations from Mastercard Inc. and Visa Inc. for so-called negative-option billers.
Much of the slack from the loss of subscription merchants is being taken up by integrated-payments partners. Payment volume in the segment jumped from $2.35 million a year ago to $119.7 million.
Revenue from integrated partners totaled $8.9 million in the third quarter compared with just $800,000 a year earlier. More than 90% of the integrated segment’s revenue comes from real estate and related rental and dues payments following Priority’s acquisition in March of assets from YapStone Inc. and in mid-2018 of RadPad Holdings Inc., two specialists in the niche. Meanwhile, revenue in the Commercial Payments segment amounted to $7 million, little changed year-over-year.
“Our third-quarter results continued to reflect the strong underlying growth we’ve realized over the past several quarters, particularly when excluding the change in the subscription-billing e-commerce business,” Tom Priore, Priority’s executive chairman and chief executive, said in a statement. “These strong results were driven by solid improvement in the Consumer Payments segment, exceptional growth in the Integrated Partners business, and steady performance in Commercial Payments.”
Priority reported a net loss of $5.84 million for the quarter compared with a $2.56 million loss a year earlier, on total revenues of $110 million, up 6.1% from $103.6 million.