Diverse Range of Payment Methods, M&As Help Vault Paya Increase Volume by 28% – Digital Transactions


The hyper growth of e-commerce has boosted many processors over the past 18 months, but some are also benefiting from a wide range of payment methods and customers. That group includes Paya Holdings Inc., which on Friday morning reported a nearly 28% year-over-year increase in payments volume for its third quarter ended Sept. 30.

The full integration of Atlanta-based independent sales organization Paragon Payment Systems contributed to the company’s $11.1 billion in volume. Paid acquired in April. But Paya chief executive Jeff Hack was quick to point out that the diversity of payment methods and client industries also play a huge role in the growth of his business. Paya deals in five main markets: business-to-business, healthcare, nonprofit, government, and education.

Another key benefit of this diversity, he told stock analysts on an earnings call on Friday, is that it can reduce competitive pressure on pricing. “The competitive environment exists, but we are very focused on business-to-business and municipal [payments]Hack told stock analysts during an earnings call on Friday. These markets, he added, are “not as competitive” as other general retail payments.

Hack: “We see mergers and acquisitions as a central part of our growth strategy.”

Hack said more acquisitions are likely on the way. “We see mergers and acquisitions as a central part of our growth strategy,” he said. In the meantime, Paragon brings additional strength in healthcare and nonprofit organizations. A previous agreement, that for The payment groupincreased the capacity of utility companies and government entities.

Paya’s strategy is to provide capabilities for both card payments and automated clearinghouses, as well as support for integrating payment capabilities into customer operating software. The company pursues the latter approach through independent software vendors, or ISVs. The ISV strategy can take time to develop, Hack warned. “Signing new partners takes longer, but if it takes longer, that’s okay because once they’re on board, they’re with you for a long time,” he said.

ACH, meanwhile, is proving to be a fast-growing transaction category for Paya. The payment method, which customers typically deploy for higher tickets, accounted for $4.5 billion in volume for Paya in the quarter, up 55% year-over-year. That was enough to account for 41% of Paya’s total volume in the third quarter, up from a third of volume a year ago. But Hack was quick to point out that ACH activity does not move card volume. “It’s not about them displacing each other,” he said. “They work side by side.”

Due to Paya’s core markets, ACH capability has indeed become a strategic factor for Paya to win and retain business, Hack said. “ACH continues to be a key differentiator for Paya,” he told analysts on the call.

For the quarter, and after the Paragon integration is complete, Paya reported revenue of $63.1 million, up 22% year-over-year. Organic revenue growth — the increase in revenue excluding acquisitions — was 12%, underscoring the importance of Paya’s mergers and acquisitions strategy, company officials said.


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