Priority CEO Says Businesses Expect a Unified Commerce Experience

B2B payments are increasingly finding themselves in the spotlight, and for good reason. 

The complex and massive space is increasingly benefitting from the trickledown consumerization of payments, and enjoying new transactional innovations that come with digitization and automation. 

Slowly, if surely, these 21st century advances and their compelling value propositions are melting the iceberg of institutional inertia and legacy workflows that have kept the B2B ecosystem tethered to 18th century innovations like the paper check. 

And B2B payments were in the spotlight again, as Priority Technology Holdings, a platform for unified commerce that delivers integrated payments and banking services at scale, on Thursday (Nov. 9)  announced its third quarter 2023 financial results. 

Priority has three reportable segments: SMB (small- to medium-sized business) Payments, B2B Payments and Enterprise Payments.

“Building on the momentum we saw in the first half of the year, during the third quarter we continued to execute in all three segments of our business, delivering strong results,” said Tom Priore, chairman and CEO of Priority. 

“We are delivering on the promise of unified commerce with clear and sustainable financial performance…We have invested thoughtfully in technology and built scalable operations and financial resources that will continue to outperform as market demands evolve,” Priore added. 

The Alpharetta, Georgia-based company reported a loss of 16 cents per share, while revenue increased 14% to $189 million for the quarter. 

See more: Priority Completes Acquisition of Plastiq and Combines B2B Offerings

SMBs Increasingly Vulnerable

Per its earnings report, Priority onboarded an average of 4,000 new SMBs for each month of the most recent quarter, in line with the 12,000 new SMB merchants the business added the quarter prior.

“We’re still early innings at pushing [our] capabilities into the SMB vertical…we have a lot of assets and partners on the platform” where there is room for growth, executives on the call told investors during the Q&A section. 

“Economic softening would further increase adoption,” Priority CEO Priore added. 

And indeed, PYMNTS Intelligence finds that SMBs are increasingly vulnerable to the blustery economic headwinds that have come to characterize the contemporary macro climate. 

As noted in “What’s Next in Credit: Why SMBs Prefer Corporate Credit Cards for Short-Term Financing,” a PYMNTS Intelligence and Cross River collaboration, only 47% of SMBs with annual revenues of $10 million or less had access to business or personal financing as of this July, leaving them vulnerable to financial uncertainties.

Separately, PYMNTS Intelligence in “What’s Next in Credit: How Lack of Credit Access Impacts SMBs” found that six out of 10 SMBs are denied access to the funding they need.

“Customers of all sizes, what we’ve been very successful at — what they’re recognizing at Priority — is that payments are about more than card acceptance, digital revenue acceptance, but it’s about repositioning that money to help the business grow. When we do that AR (accounts receivable) work, it goes into a routable bank account where that money can be used to pay vendors through a virtual card, or you can pay vendors using Plastiq to capture early-pay discounts and the funds can get resolved to your payee the way they want them,” Priore told investors on Thursday’s call. 

“We’re built to optimize the performance of software and payment assets,” he added, saying that “customers expect a unified commerce experience now, and you have to the ability to take that money and push it out to employees. It’s a FinTech model not a merchant acquiring model, and that’s a big part of the message we’re trying to get people to recognize. It’s a different machine.”

Read also: Digital Innovations Help Cash-Strapped Small Businesses Find Best-Fit Funding Solutions

Priore also emphasized that his company’s products have the benefit of “reflecting funds in 5 minutes or less” for businesses on their gateway platform. 

“If you’re trying to see your funds on the weekend in a traditional setting, you’re not seeing that money for 2 or 3 days. We’re able to give people access to their money and ways to use it, pay vendors and negotiate better terms, that are really meaningful particularly in this economic environment,” Priore said. 

Priority reported a 49% increase of new average monthly enterprise business enrollments, and noted to investors that an increase in deposit balances and interest rates continued to drive growth in revenue. 

The company’s stock is down about 5% for the day. 

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