Mid-Market Specialists in Small And Medium Merchants Report Quarterly Gains

Mid-size payments processors have contended with a pandemic, a sharply rising cost of funds, and pronounced inflation over the past few years, but that hasn’t stopped them from capturing volume, particularly from the small and medium-size merchants that have long been their specialty.

In results reported early Thursday, Alpharetta, Ga.-based Priority Technology Holdings Inc.—the 24^th largest U.S. payments processor, according to rankings by researcher TSG—reported first-quarter revenue from small-and-medium-size merchants grew 19% year-over-year, to $154.9 million, or 84% of its total revenue. The result was helped by the addition of more merchants, swelling the SMB count 7% to 260,000, the company reported.

Also reporting first-quarter results this week was Priority’s Atlanta neighbor, Repay Holdings Corp, which recorded $6.6 billion in card-payment volume, up from $6.4 billion a year ago. The company, a specialist in establishing integrations with independent software vendors (ISVs) that serve small businesses, ranks 34^th on TSG’s chart, up from 40^th in 2021.

Revenue for Repay grew 10% year-over-year, to $74.5 million, while net income swung to a loss of $27.9 million from a positive $12.9 million a year ago. The 17-year-old company, heavily concentrated in consumer payments, went public in 2019 as the result of a merger with a special purpose acquisition company.

Overall, Priority reported $185 million in revenue for the quarter, up 21% year-over-year, though it reported a negative $500,000 in consolidated net income, an increase from a negative $300,000 a year earlier.