Daring Greatly: Growth and Transformation in a Landscape of Change
2018 was a year of growth and change for Priority’s flagship enterprise, Priority Payment Systems. On the growth front, 2018 saw PPS become the 6th largest non-bank merchant acquirer in the United States; this was driven by strong performance in overall volume (10%+ growth in the dollar value of processing volume compared to the prior year) as well as increased transaction volume within the portfolio (5%+ growth year over year). New merchant boarding held steady at approximately 4,000 per month and portfolio attrition continued at one of the lowest rates in the industry. Key acquisitions of several high-performing branded offices and the strategic purchase of several other assets allowed us to enter new verticals, leverage technologies and deploy resources against inside sales and other direct selling efforts.
Along with this growth, there were also a number of significant changes. Citizens Bank was named as our new sponsor bank partner and confidence in the relationship is extremely high after a remarkably smooth and professionally handled transition period. Deliberate moves have been made to place PPS in better position to capitalize on what we see as increasing demand for differentiated products and services: consumer lending, collections, rent payments, healthcare payments, cash discount programs, etc.… Additionally, we have weathered the losses in our recurring ecommerce business, which caused headwinds with overall acquiring performance, and have begun the task of rebuilding that segment with new guidance established by our partners at MasterCard.
Technology has the potential to cut these costs by up to 75%, meaning there is a potential $1.5 trillion opportunity for those that can bring solutions to bear against this challenge: enter Priority Commercial Payments and our proprietary CPX platform.
There has also been a renewed focus on investing (and re-investing) in our most important assets: employees. In addition to adding talent throughout the organization, we have implemented more advanced employee training and education programs, as well as new systems to promote employee engagement and participation. Additionally, we are confident the creation of a new Strategic Business Development division lead by industry-veteran Anthony Bonventre will allow us to maximize our human capital and resources through a disciplined approach to vetting and analysis of new market opportunities.
2019 will also see the long-anticipated deployment and adoption of MX Connect, allowing up to consolidate our network of resellers, ISOs and agents on a single platform designed from the ground up to help us differentiate our business and operate/cooperate more efficiently. The importance of the MX Connect initiative cannot be overstated; we believe it is a mission-critical asset for our evolution as a truly integrated enterprise. We will also be introducing a host of enhancements to our MX Merchant platform, ensuring technology will play a prominent role in this year’s business narrative.
There will be, without question, continued challenges as we seek to expand and grow our business in core acquiring, especially as the marketplace continues to witness massive technology-driven transformation and consolidation. Witness the recent $22 billion-dollar acquisition of FirstData by Fiserv – what we believe to be a clear indicator of the magnitude of change unfolding in the industry. We will, however, persevere: moving relentlessly towards a vision of our future that sees us as a dominant force in the evolving landscape of payments.