Shift4’s Isaacman Decries Rivals’ Fees As the Company Finally Closes in on Adding Finaro

The top brass at fast-growing payments processor Shift4 Payments Inc. indicated early Thursday the company is banking on sophisticated platforms like its SkyTab point-of-sale system in the face of rivals’ efforts to hit hotels and restaurants with additional fees.

The Allentown, Pa.-based company is also looking to expansion in Europe as it nears a closing on its agreement to acquire Finaro, an Israel-based processor whose acquisition it initially expected to have completed in March.

Jared Isaacman, Shift4’s chief executive, took a shot at competitors’ efforts to levy additional fees on restaurants, a key market for his company. Following protests, Toast Inc. this month withdrew a controversial 99-cent fee charged to customers placing online orders with Toast merchants. “There’s nothing cosmic about ringing up a cheeseburger,” Isaacman said during a conference call to present his company’s second-quarter results.

Isaacman seized the opportunity to tout SkyTab, which is aimed at hotels and restaurants. The latest win for the system is Fountainbleau Resorts LLC, a chain of luxury hotels based in Enterprise, Nev. Fees tacked on by rival providers, he said, help “create opportunities” for SkyTab, as Shfit4 installed 6,500 SkyTab systems in the second quarter, according to data released Thursday.

Isaacman indicated Shift4 is finally nearing completion of its $525-million acquisition of Finaro, a move that has been held up by regulatory requirements since the deal’s announcement early last year. The company will give Shift4, which now expects the deal to close by the end of September, an important beachhead in European processing. “We are excited to move on to the next chapter in the Finaro story,” he told the analysts. Indeed, he added, Shift4 is now “pursuing several [acquisitions], mostly in Europe” as the company places an emphasis on international expansion, a move Isaacman characterized as the company’s “key to the next 20 years.”

At the same time, Shift4 is clamping down on costs at home, using artificial-intelligence technology to supplement productivity. The move is expected to help keep the company’s headcount constant after it shed 150 employees during the quarter. Shift4’s workforce owns 36% of the company, “We’re using AI for efficiency and productivity,” Isaacman said. “We’re going to fight like hell to have the same headcount as we had” at the start of the year.

For the quarter, Shift4 recorded $26.8 billion in end-to-end payment volume, up 59% year-over-year. This is volume Shift4 processes directly, as distinct from payments the company processes after receiving it from gateways. Gross revenue less network fees came to $228.1 million, up 25%, while gross profit totaled $158.7 million, a 61% increase. Net income more than doubled to $36.8 million.