Q3 2020 Usio Inc Earnings Call
Good morning, and.
Welcome USIO earnings conference call for the third quarter ended September Thirtyth 2020.
All participants will be in listen only mode.
After todays presentation, there will be an opportunity to ask questions.
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A replay will be available shortly after the end of the call through November 27, 20 Twond.
I would like to turn the conference over to Mr. Joel houses.
That's true relations. Please go ahead.
Thanks, Nick and thank you everyone for participating today welcome USIO third quarter 2020 financial results Conference call.
The earnings release, which USIO issued yesterday after market closed is available and the company's Investor Relations website, and you see a doctor from slash and Investor under news.
On the call today, let's hope President and CEO, Greg Carter Senior Vice President and Bill payment simultaneously, Tom Joule, Senior Vice President and Chief Financial Officer, and using force senior Vice President of prepaid services.
Right and that will provide prepared remarks, and then we'll open the call to your questions.
Before we begin please remember the comments on today's call May include forward looking statements forward looking statements can be identified by the use of such words as estimate anticipate expect believe and 10 may will should seek approximate or playing for the negative of these words and other similar words and phrases.
Forward looking statements by their nature involve estimates projections goals forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward looking statements include.
Including risks related to the cobot, Nike pandemic and its effect on the economy. The realization the opportunities from the single acquisition management and the company's gross loss of key resellers and relationships with the automated clearing house network and sponsors third party card processor and providers and merchants the ball.
All told your stock price for the loss of key personnel growing competition and electric commerce market. The security of the company's software hardware and information and appliance with complex federal state and local laws and regulations and other risks detailed in the Companys filings with the FTC.
These forward looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events USIO expressly disclaims any obligations or undertaking to update or revise any forward looking statements made today to really well and any change and USIO those expectations with regard there.
Two for any other changes and the events conditions or circumstances, which and he's such statement is based except as required by law.
Please refer to the company's FCC filings on its Investor Relations website for additional information.
With that I'd now like to turn the call over to Lewis Lewis.
Thank you, Joe and welcome everyone and.
I'm pleased to report all time record quarterly revenues for the third quarter up 2020.
With these results we resume the growth trajectory for the company before it was temporarily impacted by the Corona virus and the second quarter. They.
The results also clearly demonstrate the strength of our diverse payments.
Channel strategy offering AC age prepaid card processing services to the growing electronic payments market.
Both card and prepaid business lines experienced all time record volumes and associated revenues.
After define the economic downturn and growing nicely and the second quarter and he said was continued their momentum with well above industry growth rates and the third quarter. Once again illustrating the success, we are achieving penetrating these markets with innovative technology that makes payments.
Simple and secure.
We also saw a six foot sequential recovery and our AC age business. Despite the ongoing had the headwinds of a weak consumer lending market.
And while we continue to invest and our growth initiatives like staffing up to handle the increased and call center volume associated with the growth of prepaid we're doing so while keeping overall overhead expenses and check and.
S.G. and aid this quarter was essentially unchanged from a year ago and only marginally on a sequential basis.
The net result is that the third quarter profitability, both adjusted EBITDA and net losses improved from both the year ago quarter as well as the second quarter of this year.
And that's.
Fiscal 2020 profitability continues to run ahead of last year as we work not only to grow the business, but to leverage that growth for the bottom line.
And the first quarter, we began providing segment reporting.
And the effort to improve transparency and our revenue disclosure. So let me offer some high level comments by segment.
Credit card processing, the credit card transactions processed and the third quarter were up 81%.
And the dollars processed were up 15% from a year ago setting a new quarterly records for both pay back and legacy card processing and were strong pace that continues to layer on new accounts and the legacy business has rebounded with the opening the reopening of dental and veterinary losses.
And as the segment scales the bottom line is improving.
In particular, most of the growth is coming from or pay back business, where we were seeing a dramatic increase and the number of new accounts, the and boarded and beginning the process on our platform.
Shortly Greg is going to talk more about the exciting progress in card processing, especially payfac, where new employment, where the new implementation team is enjoying tremendous success.
And they see H., we continue to feel the weakness and consumer lending.
Some of the Forbearances lenders had provided have expired. So we have seen the increase and the number of debits for loan repayments and that is accounted for the relative strength and the third quarter compared to the second quarter returned checks were up 21% and transactions were up 7%.
7%, respectively from the second quarter, which was clearly at a bottom.
We expect to see sequential improvement the continuing for the fourth quarter.
He also had record reserve results for Pinless debit and RCC remote check creation.
Where we're having a great success in selling these alternative products into our existing base.
Again, all of the decrease in 88 volume is strictly attributable to less usage as we continue not only to retain existing clients, but to add new ones as well our expectation is that as consumer lending recovers, we will get back to or above.
The strong levels, we achieved in the first quarter this year.
Prepaid had another impressive quarter revenue and a third quarter basically doubled sequentially from the second quarter compared to a year ago third quarter load volume more than tripled while transaction volume nearly double.
We've had great success with pre pay programs that support government and charitable organizations and their effort to provide assistance and relief.
Five of the 10 largest cities in the United States are now clients.
As our prestigious national organizations, such as United way and many others. These organizations use our program to provide monetary assistance to those who are experiencing financial hardship and that money is being dispersed using <unk> and USIO prepaid card the USIO.
Prepaid program is winning in this market because our prepaid cards streamlined the disbursement of funds for these organizations and ease record keeping it and provide the recipients with a simple and convenient meat and to access their fun funds. In addition, we offer several key feature.
Is useful for any community organization looking to provide financial relief for and so for instance, the cards provide.
Provide cash access the cards can be reloaded the cards can be program to prohibit their use for.
For purchases, a prohibitive items, such as alcohol and.
And the cards can be sent virtually by tax free email.
But most importantly, we're winning because of our ability to build strong relationships with these organizations.
The pandemic was one of the catalysts for Prepaids recent growth. However, many of these client organizations have and need for money disbursement solutions for a number of other programs not related to the pandemic. So we expect pre paid to continue its outstanding performance and the fourth quarter and and the 2021.
Before wrapping up my comments and turn the call over to Houston.
On behalf of the entire USIO team I would.
We would like to express our condolences to the chocolate family.
For the past into my guess.
And with who serve so Adler really when the board for many years to me. He was invaluable source of wisdom knowledge and inspiration.
And he will be greatly missed at the same time and want to welcome Ernesto Bayer to the board of directors Ernesto will serve as a member of the company's audit compensation nominations and corporate governance committees Ernesto has over 25 years of international trade.
Variants and holds and M.B.A. and international business from University of Texas, and San Antonio on behalf of the board, we welcome him and look forward to working with Ernesto.
Finally, I want to note.
That's the end of September we closed and equity offering.
Raised and $8 million from a group of 16 very strong institutional investors along with the 3 million that we raised earlier. This year. We now have a very strong balance sheet and the outstanding group of institutional investors supporting the company.
Our strategy is always encompass non organic growth and with these offerings. We now have the resources not only support our working capital and general corporate needs, but to invest and our growth businesses and to undertake accretive acquisitions let.
Let me conclude with a few remarks about the Corona virus tandem and after.
After acting quickly to ensure the health and safety of our employees and customers. We have managed to avoid any material impacts from the true around the virus and any any of our operations. Many of the industries, we serve for that suspended operations and the second quarter were back up and.
And operational and third quarter.
And while covered as having a peripheral impact on card and prepay such as slowing some of paybacks implementation.
Consumer lending remains as the only area that is not completely bounced back.
Nevertheless, Nevertheless, we remain optimistic that the record growth we have seen.
Since building and the middle 2019 as reserves.
Again, thanks to our channel diversification strategy with we had tremendous growth from.
Fiscal 2020 is shaping up to be a very strong year for for USIO.
With outstanding growth and extremely solid financial position, we feel that we are building a strong foundation for the for future growth.
With that I'd like to conclude my opening remarks, and turn the car call over to Houston for Us, our senior Vice President and a prepaid services.
Thank you for us.
Last quarter's call, we stated that we expected substantially larger loan and transaction volumes.
This quarter and I'm happy to announce that we did not disappoint with prepaid card load volumes up 167% and Q3 over Q2, this year, which follows a 94% increase and carload volume.
With sorry, and 94% increase and card loan volume in Q2 as compared to Q1.
2020.
We expect to exceed 100 million and total car load volume and 2020, which would be over 150% growth and annual load volumes as compared to 2019.
The rapid growth during Q3 was largely related to pandemic relief efforts and while total card loads next quarter will be down somewhat from this Q3 peak, we expect that we expect that load volumes and the fourth quarter and beyond well continue at levels that exceed what we saw and Q2 of that share.
Our non profit of municipal partners are continuing to disperse funds and we signed on several new programs for initiatives that are not pandemic related.
These include a variety of municipal programs as well as non profit supporting new guaranteed income programs.
We reported 55, new clients at the end of last quarter and are now up to 78 total clients and.
New clients for the year.
Our third quarter revenue was up 68% sequentially from the second quarter and 225% as compared to the same period last year.
Please remember that card loan volumes are a leading indicator and revenue is generated from a guest.
Yes card load activity over a 12 to 24 month period with cash.
As much as 50% of the revenue generated.
And periods after the period the card orders and the loads occurred as.
As such we expect the depth and card load volumes and Q4 as compared to Q3 will not result, and not proportional drop in quarterly revenue and a d. and we expect that new car programs implemented. This year will contribute I will continue to contribute to our to both our top and bottom lines over the next several quarters.
With that I'd like to conclude my opening remarks, and turn the call over to Tom Jewel, Our senior Vice President and Chief Financial Officer to discuss financial results in greater detail.
Thanks, Houston and welcome everyone and thanks for joining our call today, and your interest and USIO I'm going to provide a brief review of our financial results before turning the call over to Greg.
Looking at our third quarter results revenues for the quarter ended September Thirtyth, 2020 increased 15% to $18.1 million compared to the same period and last year.
As shown in our revenue details the growth came from our prepaid and credit card businesses offset by offset by softness in our consumer lending AC age business revenues were up 225 per cent versus the previous quarter previous year, and our prepaid category and 14% and our credit card category.
Including 108% year over year growth and our Payfac business, though down from a year ago, a CH revenues rebounded in the quarter from the previous quarter, and we generated additional growth and our pinless debit product line.
Gross profit increased by 11% from $1.7 million versus the same period last year gross margins in the third quarter were marginally lower by 70 basis points from the prior year period, primarily driven by a shift in product mix I would note that margins expanded 630 basis points from the.
Quarter on a sequential basis compared to the second quarter of this year as we recovered from the and economic impact caused by the Coke and 19 band in it.
Other selling general and administrative expenses expenses were flat and $2 million for the quarter compared to the same per year.
Comparable to the same period last year costs were higher than the second quarter due to the incremental resources needed to accommodate the incremental growth of our free free prepaid programs and third quarter, we are adding resources to support our current and anticipated growth at a measured pace such as and our call.
Centre square.
Paul volumes have dramatically increased for the third quarter of 2020 operating loss was approximately $900000 versus a loss of 1.2 million in the prior year.
Looking at adjusted EBITDA the losses, the loss was approximately 254000 and quarter compared to a loss of approximately $421000 in third quarter of 2019.
The adjusted EBITDA results were much improved sequentially from the second quarter as we narrowed the EBITDA loss for over $350000.
We had a net loss of approximately $900000 or six cents per share for the quarter purchase and net loss of one point to me and or nine cents per share for the same period and the prior year there.
Third quarter share count used and the EPS calculations and was 15 million and 474171 shares going to the nine months.
Financial comparison.
Revenues were up two were 22.9 million up 10% of and same period last year with all of the increase organic growth and our prepaid and credit card segments gross profit in the first nine months were up 11% of the comparable period of 2019, while we were able to access.
And margins 20 basis points. During this period, despite the headwinds of the COVID-19 band and make the slowing economy, and overall weakness and our consumer lending market well.
While revenues for the first three quarters were up 10%, our SG and eight costs increased 6%, while continuing our investments and our payfac and prepaid growth initiatives adjusted EBITDA for the year to date period improved 12% to a 1 million dollar loss compared to a 1.15.
Billion dollar loss and the same period in 2019.
There is an equally good story and our liquidity and overall financial position cash.
Cash and cash equivalents at September Thirtyth totaled 11 point for me and as we close the two equity offerings and the quarter that Louis referred to $8 million race and the public for public offering in September and $3 million raised from a single institutional investor in July.
The company's only debt is a PPP loan the proceeds of which were used for payroll costs and other permitted expenses, which under the terms of the PPP loan program are qualifying expenses for loan forgiveness for loan forgiveness documentation was filed on August 12 for with the FDA and although we believe we qualify.
And your current rules, we are awaiting official Sta notification.
We believe we have the liquidity and financial strength to support continued investing in our growth initiatives to fund operations and to undertake so elective accretive acquisitions consistent with our growth strategy.
After a second quarter interruption, our third quarter results demonstrate we're back on a strong growth for trajectory our improved gross profit to allow improved cash flows which for fuels continuing investments and our prepaid and payfac growth initiatives, which we believe together will generate improved profit.
Ability.
Balance sheet and financial position are the strongest in years, providing us with the resources needed to support our overall growth strategy and a solid foundation for continued growth.
At this time I'd like to turn the call over to Greg.
Thank you, Tom and welcome everyone and as I stated last quarter. The card segment is making great progress and third quarter results bear that out.
It was a record quarter across the board with the highest quarterly credit card transactions and dollars processed and the company's history.
For process were up 15% from a year ago, while transactions were up 81%.
As Louis mentioned this continues the trend we've seen for several consecutive quarters, even through the pandemic and that's clearly indicative of the success, we are achieving and both payfac and legacy singular portfolio attrition.
Attrition across both portfolio has consistently been low so as we add new accounts and as our existing accounts growth we grow with them.
Last quarter, I articulated our strategy to leverage our strength and accelerate growth and this revolve primarily around bringing more discipline to our operations and to the organization.
Our implementation process needed to be more formalize documented and managed so we created a dedicated implementation team equipped them with a high powered program management software tool and acquired and certain criteria for you met before we could advance the implementation for this next phase.
Sequentially I'm pleased with the third quarter performance and as I attributed to our unwavering March towards those goals and the strong results. It is producing.
As expected conversion rates for rapidly rising and particular September it was one of our best month of the implementation team boarded a monthly record of new merchants and had many of them up and processing on our platform and short order that is the goal more and more merchants and getting them up and generating volume on our system for increased focused and.
Greater attention on our eyes to be customers has led to their greater adoption of our payfac platform and the subsequent increase and new merchant for them.
It is clear we have a wealth of opportunity and the ice these with whom we already have agreements and the aggregate we're processing billions of dollars and electronic payments. This is our low hanging fruit. The last few months have been a learning curve and the things we can do to get them off the sidelines and ended the game for.
And since we have one of our customers is a highly disciplined organization that instituted a very detailed process to on board their merchants to the USIO platform and has been our most successful implementation, thus far and now we're sharing that model with other isvs to replicate that success more broadly across our entire portfolio.
And it's not just the highest views that are activating and processing transactions were still aggressive and the market opening up new relationships. That's the motivation behind our most recent strategy.
From a firm believer and the power of subject matter expert resumes and organization developing software that service law firms is more likely to do business with the payfac that understands the nuances of the legal profession.
To that end, we reorganized our sales organization along industry verticals, where we can best leverage our proprietary technology and considerable expertise. These.
These industries include legal healthcare education property management non profit and several others. This is a relatively recent change and to support those efforts, we are developing industry and vertical specific marketing actions and just as our focus on a more disciplined implementation process has paid dividends and.
We're excited about the potential for this industry focused sales organization.
Innovation never sleeps and USIO, Let me give you. An example, we're now working with the from that it's taken robots and turn them into flower arrangement dispensing kiosks, they needed a payment partner that could provide them the flexibility for their electronic electronic payments, which is complicated by the mobility factor. This is just one example of the technology, we have developed to see.
For innovative retail and other emerging concepts.
There have been many other successes similar ones as well as those that are unique and their own regard.
For a customer list keeps growing this is resulting in net new adds every week, we are seeing more and more merchants boarded and more and more processing each week for their larger small their growth volume keeps layering on top of the recurring volume coming from our established customers and considering in many cases. These integrations have taken as along as long as a year and.
For to complete.
We are highly confident that they have made a long term commitment and the volume will continue to growth.
This is why you are starting to see record growth and volumes and the second for the reported during this quarter.
One final note on the legacy business, there, we're seeing a V shape recovery.
Our portfolio has fully recovered from the COVID-19, and is actually showing modest growth. Despite virtually no sales and marketing efforts. This is just a function of the loyalty of those merchants and the from relationships our employees have for its with these customers. So let me finish with this theme service and May not sound and sexy and some of the latest technology, but we know.
This is still a very relationship centric business, the loyalty and the singular merchants and the success of our implementation team illustrate how taking a sincere interest and customers can contribute to success USIO emphasizes service. We believe is the glue that holds all other parts of our business together.
Not unlike my comments last quarter and the allusions to the impact of COVID-19. Louis made earlier, we are seeing some residual effects of the pandemic instead.
Consider or is the customer that developed software for parking garages theres less demand right now, but we are well positioned to see immediate growth. Once the business returns. We reported every parking lot. They have so in our world comes back to some resemblance of pre cobot that volume and associated revenue will return, it's very exciting and think about that potential.
As well as many other customers facing similar headwinds once the pandemic subsides.
We are running at a record pace. Each day, we are seeing new merchants. Each day, we are seeing vast and opportunities. Each day, we are maintaining discipline and improving organise organizational efficiencies to provide our customers were world class service and to make sure. We are well prepared to handle the anticipated growth I.
I believe the results for the last two quarters are evidence that your patients waiting for the Payfac business to inflect is now being rewarded even more so I believe the best is yet to come that concludes our prepared remarks for today. So we would now like to open up the call for questions.
Well begin the question answer session and.
Ask the question you May Press Star then one on your Touchtone phone.
For using a speakerphone, please pick up your handset before pressing the keys.
For all your questions. Please press Star then too.
This time, we'll pause momentarily to assemble roster.
First question comes from Gary Prestopino of Barrington Research. Please go ahead.
Couple of questions here number one I think as I was writing down who decided 188% growth from the Payfac business I think from May have said that in his commentary.
Is that sequentially is that year over year, and how is that being measured by processing volume or revenue.
Hi, It is year over year period, and it is for that.
And I'll be your and revenue, Okay and then.
Could you Greg could you maybe help us here with number one the amount of bias easier now working with.
The amount of potential merchants desires, we have and.
What percentage of those have been boarded so far.
Oh.
Let me provide.
Provide a data point that may help asked that question, because it's a and so it does.
For a long question, but we boarded 1187 merchants and the third quarter and in September.
891 of those came in September so the trend is improving.
We're working with several of these to do just that so.
Yes that helps you from a quarterly standpoint, and get a feel for the numbers.
All right I mean.
And in terms of.
You know what have you been able to sign up some new ideas. We use this quarter I'm just trying to get an idea how many you're working with.
What the changes sequentially.
And I guess, we universe for pay for that.
Okay, well, we executed five new agreements with highest these during the third quarter, we have okay as many as.
15, and Q implementation queue right now at various stages okay.
Okay.
That helps that helps and then one last question I'll jump off for Usten.
A lot of these it appears to me that a lot of these prepaid programs.
May have somewhat of a short duration and terms so that their government programs am I incorrect and that assessment and when you. When you sign these things up what kind of duration are you looking at and and card retention usage.
So.
Really it is a pretty wide variety of programs that we've implemented this year.
Certainly and Q3, we had a substantial amount of programs related to a pandemic relief efforts, what I'll say is that several of the municipalities that we've worked with.
Have now moving on.
To leverage our product for a variety of other city initiatives and.
While those and I should have some may not be.
The same volume of dollars.
And and and a short amount of time. These are actually programs that that are ongoing that.
Should last could last for for for years.
And you know a few.
A couple examples but one one for example, and as a program on the West coast that.
Is.
For kind of the beautification of the city and engaging communities to help.
You know clean up the city and this is a program that.
Really it's just getting started but but doesn't even have an end date.
Another example are a couple of new non profits that we've engaged with that are using our product support from a guaranteed income programs. These programs last.
A 123 years and if they're successful you know.
What would never go away and so what I'm, telling you as Q3.
Yes, there was a spike and and load volumes related to the pandemic.
Q2, Q Q4, we will see that number come down.
<unk>.
Generally I expect we will maintain though levels like I said.
Card loads levels.
Higher than what we saw in Q2 of this year.
And and you know.
Probably around 60% to 70% of what we experienced in Q3, but what's the rate of sales and some of the new relationships that we're building I mean, we could be right back at Q3 levels.
You know sometime next year. So you know what we're going to have this drop.
It it might not be too long before we're really at a level that sustains what we solve this this quarter.
Okay and are these cards open loop.
Yes, all of our cards are opened <unk>, they're also all reloadable, but again you know it sort of depends on the program. If a it's more of a one time or you know two to three time load versus a recurring.
Monthly load for example.
Okay. Thank you.
And Gary before you drop off and he's a missed one important factor in and in this.
Uptick and prepaid and we've talked about it and or or comments, but it's very important for everybody understands.
All these low dollars that are going on the cards now part of the revenue gets recognized when it's been.
But a big part of that gets recognized when they leave money on the card and that will end up coming to us as revenue and spoilage 12, or 24 or even 36 months. Later, so we're building up a huge bucket of future revenue right now.
Okay. Thank you.
Thank you and next question is from Jon Hickman Landenburg. Please go ahead.
And.
Lewis I was wondering you know you talked several times in your prepared remarks about a possible.
Possible acquisitions.
Last acquisition made was was aimed at a product or a technology. What do you. After what do you think you and you know what's most attractive to you now more customers are more and more tech.
Technology.
Well.
Whenever we do an acquisition, where we want it to be accretive we don't want to take on a project. So we want it to be financially accretive. We will also wanted to have synergies with existing our existing business something that we can overlay pay payments into and that we can bring.
You know strong customer relationships to and you know we are we're looking at acquisitions.
Where and final stages with one.
And that will be greatly accretive to the company.
And and and hit all those categories of having a strong synergies.
And bringing in blue chip customer base.
[music].
For us the leverage.
A final stages does that mean like in the next couple of months.
We might hear from.
We're and final due diligence I mean that is still not happen but.
Yeah, and it's working well good.
Is that is it a pretty target rich environment, right now with coveted or.
Just pay.
Payment technologies and general.
And if.
And if we target rich, but you say target rich and meaning a lot.
No buybacks and movies.
For the cheap.
You know, we would make sure that we deployed for capital at multiples less than we're trading so so in that case, yes, but those opportunities exist.
Well right now that wouldn't be hard.
[laughter] anyway, [laughter], well I guess that would be kind of you're you're not treating and a very high multiple yourself.
Just one other question the.
The.
I was interested in.
To follow up on the previous question.
How long does it take nowadays to implement and I asked for me or is that pretty much up to them.
And if there's a wide range of answers to that and we have some that implement integrate very quickly and then onboard and there is others as I said have taken well over a year to get to that process and we have myos needs and all those different stages.
Well, there's really not for.
For Mansour.
Okay. Thank you that's it for me and nice quarter by the way.
Thanks, Doug.
Thank you.
Next question is from Brian Kinstlinger of Alliance Global Partners. Please go ahead.
Great. Thank you are you able to actually quantify the revenue from both paid payback and prepaid separately during this quarter.
Yep, you can look at it well you the prepaid is broken out for you and the 10-Q, I mean and the 10-Q the revenues were.
900, and night basically million dollars 997000.
As compared to last year at same time 306000.
The Payfac is included and credit card revenue bucket.
And I'm not sure what that is it's like a million dollars.
Like a million dollars of the 5 million.
Right and then.
And.
As prepaid sounds like it could become a catalyst for your business can you share with us the rough.
The percentage for prepaid, meaning and million dollars and lower volume for process for payments what revenue do you get and.
Contributed to your revenue for USIO.
You know, we don't have that metric right off the top of our heads, but and tell you that prepaid is a larger gross margin. It's our second largest product line and the margins will fluctuate between 30 and 40%.
More towards the top number one and we're experiencing spoilage and more.
More towards the bottom number when and where the revenue is comprised of a selling cards. The actual physical plastic, which we usually don't marked up much at all so.
You know, we don't have that metrics of the low dollar you know two per cent of low dollars terminal and the revenue yet.
Would it be similar to traditional credit card processing.
No it will be much higher.
Okay. Okay.
And then finally, just a follow up on the M&A, we've heard about M&A.
For some time and the industry has always been consolidating so what has been the and the biggest impediments to you actually completing the acquisition and the last few years.
[laughter].
We'll have once a day.
Has it been valuation as it then capital has it been.
No not the right okay.
It's because of our market cap.
So you know we're limited what we can buy.
Okay alright, thank you.
All right. Thank you.
Next question is from Michael Diana Maxim Group. Please go ahead.
[noise] gross.
Nice bounce back up my questions were related to M&A and well most of them and answered I just wondered and in this environment or are you getting incoming calls from companies that want to talk to you are you are some of the companies maybe you talk to and the past and we are.
Aren't able to get something done where they're coming back to you or is it has it picked up in that regard and all.
Are you talking about USIO being a target or us or no no no no USIO, making acquisitions, yeah, okay and.
So.
We were selective and what we're looking at so we're not we're not just taken and the flood of leads us companies that want to be purchased we when we go out for something that usually because we want it and we see the synergies. So so we're just very selective.
There are properties out there.
Portfolios to buy there's a lot of properties out there and the payments world and and because.
Because of our size were very limited what we can do and when we do something we want to make sure we're buying it right and that its accretive and its not a project and we're going to be able to leverage it throughout our company.
And you will see us execute that way.
All right great. Thank you.
Thank you.
And for your question. Please press Star then one.
I have a follow up question from Gary Prestopino Barrington Research. Please go ahead.
But yes. Louis did you say that out of the revenues and credit card. This this quarter about a million dollars is payfac generated.
Yeah, a little more than a million.
Okay, that's fine and then.
Greg could you help me what.
What is causing the big Delta between transaction growth and dollar volume growth I mean, your transactions were up 81%. Your dollar volume process was only up 15% and I would tend to think that given that your desires fees are signing.
Merchants that may have bigger dollar ticket.
Bigger dollar per ticket why is that moving more towards where it looks like it's actually lower lower dollar per ticket.
Well you hit the nail and ahead, Gary and so we took a.
And micro.
Processor or micro merchant Oh, we implemented in Q3 were actually earlier than that but the real volume hit in Q3 and their services costs $1.99.
So tons and transactions little dollar and though.
And that was a micro merchant is that like a vending machine company.
No, it's actually and consumer lending and that that's their feet.
Good day, 20 dollar low $20 one of them they charge $1.99.
$30 per loaded towards though and I didn't know and they already have really they have really good volume.
Yeah, well it seems like it all right. Thank you.
You bet.
This concludes our question and answer session and I'll like to turn the conference back over to management for any closing remarks.
Well, thanks, everybody for joining our call and and this is going to conclude our our third quarter conference call.
Oh for instance, now concluded. Thank you for attending today's presentation you may now disconnect.
[noise].