Repay Holdings Corporation operates as a payments technology company. The company provides integrated payment processing solutions to industry-oriented vertical markets in which businesses or other organizations have specific transaction processing needs. The company refers to these markets as vertical markets or verticals.
The company provides payment processing solutions to clients primarily operating in the personal loans, automotive loans, receivables management, and business-to-business ve...
Repay Holdings Corporation operates as a payments technology company. The company provides integrated payment processing solutions to industry-oriented vertical markets in which businesses or other organizations have specific transaction processing needs. The company refers to these markets as vertical markets or verticals.
The company provides payment processing solutions to clients primarily operating in the personal loans, automotive loans, receivables management, and business-to-business verticals. The company’s payment processing solutions enable consumers and businesses in these verticals to make payments using electronic payment methods, rather than cash or check, which have historically been the primary methods of payment in these verticals. The personal loans vertical is predominately characterized by installment loans, which are typically utilized by consumers to finance everyday expenses. The automotive loans vertical includes a diversified client base across the entire credit spectrum. The company’s receivables management vertical relates to consumer loan collections, which typically enter the receivables management process due to delinquency on credit card bills or as a result of major life events, such as job loss or major medical issues. The business-to-business vertical relates to transactions occurring between a wide variety of enterprise clients, many of which operate in the automotive, field services, healthcare, homeowner association (HOA) management, hospitality and media industries, as well as educational institutions and governments and municipalities.
The company’s go-to-market strategy combines direct sales with integrations with key software providers in its target verticals. The integration of the company’s technology with key software providers in the verticals that it serves, including loan management systems, dealer management systems (DMS), collection management systems, and enterprise resource planning software systems, allows it to embed its omni-channel payment processing technology into its clients’ critical workflow software and ensure seamless operation of its solutions within its clients’ enterprise management systems. An integration allows the company’s sales force to readily access new client opportunities or respond to inbound leads because, in many cases, a business will prefer, or in some cases only consider, a payments provider that has already integrated or is able to integrate its solutions with the business’ primary enterprise management system. The company has successfully integrated its technology solutions with numerous, widely-used enterprise management systems in the verticals that it serves, which makes its platform a more compelling choice for the businesses that use them. Moreover, the company’s relationships with its software integration partners help it to develop deep industry knowledge regarding trends in client needs. As of December 31, 2024, the company maintained approximately 280 integrations with various software providers.
Segments
The company operates through two segments, Consumer Payments and Business Payments.
Consumer Payments
Consumer Payments segment provides payment processing solutions (including debit and credit card processing, Automated Clearing House (ACH) processing and other electronic payment acceptance solutions, as well as the company’s loan disbursement product) that enable its clients to collect payments and disburse funds to consumers and includes its clearing and settlement solutions (RCS) offering. RCS is the company’s proprietary clearing and settlement platform through which it markets customizable payment processing programs to other independent sales organization (ISOs) and payment facilitators. The strategic vertical markets served by the company’s Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
Business Payments
Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable the company’s clients to collect or send payments to other businesses. The strategic vertical markets served within its Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, HOA management and hospitality.
Growth Strategies
The key elements of the company’s strategy are to increase penetration in existing verticals; new vertical expansion; strengthen and extend is solution portfolio through continued innovation; and selectively pursue strategic acquisitions as opportunities arise that meet its internal requirements
Solutions
The company provides its clients with comprehensive solutions, which can generally be categorized as follows:
Payment Acceptance
Debit and Credit Card Processing — Allows the company’s clients to accept card payments. These payments can be made using any of its payment channels, as further described below.
ACH Processing — The company’s ACH processing capabilities allow its clients to send and accept traditional and same-day ACH transactions.
ECash — Through third party relationships, the company can facilitate customers who want to make payments with cash by converting it into digital payments that are deposited with its clients.
Digital Wallet Services — Enables consumers to quickly and easily pay using payment data securely stored in the digital wallets of their mobile devices.
Accounts Payable Automation
Virtual Credit Card Processing — The company’s virtual credit card product offering enables its clients to automate their payables transactions by sending single-use virtual credit cards to their suppliers.
Enhanced ACH Processing — Provides the same functionality as our standard ACH processing capability, but with the added benefit of incremental transaction and reconciliation data.
Clearing and Settlement – The company’s RCS platform offers ISOs and payment facilitators clearing and settlement solutions for all major card brands.
Instant Funding — The company's instant funding capabilities allow its clients to transfer funds directly to a consumer’s debit or prepaid card. The company has created a proprietary process that decreases processing delays typically associated with traditional fund disbursements.
Communication Solutions — As an ancillary offering to its payment processing solutions, the company provides clients document processing and mailing services, including document printing, billing statements, image printing, and check printing.
The above payment acceptance and funding methods are processed through the company’s proprietary payment channels:
Web-based
Virtual Terminal — A terminal that provides virtual payment access for processing of ACH or card transactions.
Hosted Payment Page — A client-branded terminal that enables ACH and card transaction processing.
Online Client Portal — A consumer-facing, client-specific website that gives a client’s customer the ability to pay online and view account information anywhere, anytime. A Repay hosted website may be stand-alone or integrated with any other software application.
Mobile Application — The company provides clients the ability to accept payments via a mobile application on a customized, white-label basis.
Text-to-Pay — Allows a business’ customer to pay with a simple text message after receiving an SMS alert that reminds such customer when payments are due.
Interactive Voice Response (IVR) — A secure and flexible option to pay over the phone, 24 hours a day, 7 days a week, via a 1-800 number with bilingual capabilities.
Point of Sale (POS) — The company provides payment acceptance at brick-and-mortar locations through POS equipment that requires a client’s customer to provide a card.
Sales and Distribution
The company’s sales effort primarily consists of two strategies: first, its direct sales representatives, who focus on each of its core verticals, and second, its software integration partners, which enable the direct sales force to more effectively access new client opportunities and respond to inbound leads.
Direct Sales Representatives
The company’s sales representatives are generally organized by vertical market and account size. Direct sales representatives work with the company’s clients and software integration partners to understand its clients’ desired payment solutions and then communicate those desires to its product and technology teams, who build a customized suite of products and payment channels tailored to its clients’ specific needs. The company also maintains a sales support team that supports the onboarding process.
Software Integration Partners
As of December 31, 2024, the company was integrated with approximately 280 software partners that are providers of its clients’ primary enterprise management systems. The company’s integrations are intended to ensure seamless delivery of its full suite of payment processing capabilities to its clients. These integrations are also a critical part of the company’s marketing strategy, as many clients would prefer to award their payments business to payment processors who have worked to integrate their solutions into the client’s enterprise management systems.
Operations
The company has developed an effective operations system, including its proprietary onboarding, compliance, and client oversight processes, which are structured to enhance the performance of its platform and support its clients.
Client and Transaction Risk Management
The company targets clients that it identifies as low-risk through the development of underwriting policies and transaction management procedures to manage approval of new accounts and to establish ongoing monitoring of client accounts. Effective risk management aids it in minimizing client losses, such as those relating to chargebacks or similar rejected transactions, and avoiding fraud for the mutual benefit of its clients, its sponsor banks, and itself.
Proprietary Compliance Management System: The company has developed proprietary onboarding, compliance, and client oversight processes, of which its Compliance Management System (CMS) is a part. The CMS, developed in conjunction with the Third Party Payment Processors Association, focuses on four main components — board and management oversight, a compliance program with written policies and procedures and employee training and monitoring, responsiveness to consumer complaints, and annual compliance audits from an independent third party — and is inclusive of the Electronic Transaction Association guidelines on underwriting and risk.
Client Onboarding: The company believes it maintains rigorous underwriting standards. Prospective clients submit applications to the company’s credit underwriting department, which performs verification and credit-related checks on all applicants. Each client is assigned a risk profile based on sponsor bank requirements, as well as additional criteria specified by the company. The company’s sponsor banks periodically review and approve its underwriting policies to ensure compliance with applicable law, regulations, and payment network rules. Upon approval, the ongoing risk level of a client is monitored and adjusted on a monthly basis based on additional data relating to such client.
Client Monitoring: Each client’s file is assigned one of three risk levels (low, medium, or high) corresponding to several client behaviors. The company reviews and adjusts these risk levels on a monthly basis and additionally subjects them to more in-depth quarterly reviews. The company also engages third parties and relies on internal reporting to identify and monitor credit/fraud risk. It generates client-specific reports that compile daily and historical transactions, which may include average ticket, transaction volume, refund and chargeback levels, and authorization history, which it utilizes in order to identify suspicious processing activity. The company reviews these reports on a daily basis and suspends any irregular processing activity, which is subject to review, remediation, and, as appropriate, suspension of either an individual or batch of transactions or a particular client, as applicable.
Investigation and Loss Prevention: If a client exceeds the parameters established by the company’s underwriting and/or risk management team or the company determines that a client has violated the payment network rules or the terms of its service agreement with it, one of its team members will identify and document the incident. The company then reviews the incident to determine the actions taken or that it can take to reduce its exposure to loss and the exposure of its client to liability. As a part of this process, the company may request additional transaction information, withhold or divert funds, verify delivery of merchandise, or, in some circumstances, deactivate the client account, include the client on the Network Match List to notify the industry of the client’s behavior, or take legal action against the client.
Collateral: The company requires some of its clients to establish cash or non-cash collateral reserves, which may include certificates of deposit, letters of credit, rolling merchant reserves, or upfront cash. This collateral is utilized in order to offset potential credit or fraud risk liability that the company may incur. The company attempts to hold such collateral reserves for as long as it is exposed to a loss resulting from a client’s payment processing activity.
Chargebacks: The payment networks permit the reversal of a money transfer, a chargeback, up to six months (or in rare cases, a longer time frame) after the later of the date the transaction is processed or the delivery of the product or service to the cardholder. If the client incurring the chargeback is unable to fund the refund to the card-issuing bank, the company is required to do so by the rules of the payment networks and its contractual arrangements with its sponsor banks. During the year ended December 31, 2024, the company’s chargeback rate was under 1% of its payment volume.
Security, Disaster Recovery, and Back-up Systems
The company adheres to industry security standards to protect the payment information that it processes. It regularly scans and updates its network, systems, and application code and malware defenses. The company uses a third-party vendor solution for security education materials. Every employee and contractor is required to successfully complete annual security awareness training. The company routinely retains external parties to audit its systems’ compliance with current security standards as established by the Payment Card Industry Data Security Standards (“PCI DSS”), Service Organization Control ("SOC1 Type II,” “SOC2 Type II”), Health Insurance Portability and Accountability Act (“HIPAA”), and International Organization for Standardization (“ISO 27001”) and to test its systems against vulnerability to unauthorized access. The company utilizes third-party vendors for internal and external penetration testing. Further, it uses one of the most advanced commercially available technologies to encrypt the cardholder numbers and client data that it stores in its databases. Additionally, the company has a dedicated team responsible for continuous monitoring and security incident response. This team also develops, maintains, tests, and verifies its incident response plan. Disaster recovery is built into its primary payment gateway through redundant hardware and software applications hosted in two distinct cloud regions. The company’s primary cloud region for the payment gateway infrastructure is set up to be replicated, substantially on a real-time basis, by its secondary cloud region such that if its primary cloud region becomes impaired or unavailable, operations are redirected to the secondary cloud region. The company’s incident response team tests these systems each quarter to assess the effectiveness of its disaster recovery plan, including staff readiness and operational capability.
Third Party Processors and Sponsor Banks
The company partners with institutions in the payment chain to provide authorization, settlement, and funding services in connection with its clients’ transactions. These institutions include third-party processors and sponsor banks, which sit between the company, acting as the merchant acquirer or payment processor, and the payment networks, such as Visa and MasterCard. These processors and vendors, in turn, have agreements with the payment networks, which permit them to route transaction information through their networks in exchange for fees.
When the company facilitates a transaction as a merchant acquirer, it utilizes third-party processors primarily for authorization, such as Global Payments, Inc. Under such processing arrangements, the third-party processors and vendors receive processing fees, which are typically based on the number of transactions processed.
In order for the company to process and settle transactions for its clients, it has entered into sponsorship agreements with banks that are members of the payment networks. The company is required to register with the payment networks through these bank partners because it, as a payment processor, is not a “member bank” as defined by the major payment networks. Its member bank partners sponsor its adherence to the rules and standards of the payment networks and enable the company to route transactions under the sponsor banks’ control and identification numbers (for example, known as BIN for Visa and ICA for MasterCard) across the card and ACH networks to authorize and clear transactions. The company’s relationships with multiple sponsor banks give it the flexibility to shift payment volumes between them, which is designed to help it secure more competitive pricing for its clients and to maintain redundancy.
When the company facilitates a client’s payment to its suppliers or vendors, it typically utilizes the services of third-party program managers, such as Wex Inc., which have arrangements with banks to operate card issuance programs. Under such arrangements, the program manager and issuing bank retain a portion of the interchange generated by each transaction. Under the applicable contractual arrangements, the company’s clients are generally required to prefund these payments. Because the company is not a licensed money transmitter, it has entered into custodial agreements with banks or other financial institutions that will hold its clients’ funds in trust.
Competition
The company competes with a variety of payment processing companies that have different business models, go-to-market strategies, and technical capabilities. In its Consumer Payments segment, the company’s primary competitors include ACI Worldwide, Paymentus, PayNearMe, PayScout, and TabaPay. The company also competes in its Consumer Payments segment against many traditional merchant acquirers, such as financial institutions, affiliates of financial institutions, and payment processing companies, including Bank of America Merchant Services, Elavon (a subsidiary of U.S. Bancorp), Wells Fargo Merchant Services, Global Payments, WorldPay, and Fiserv. In its Business Payments segment, the company’s primary competitors include AvidXchange, Edenred Pay (a division of Edenred), Corpay, Paya (a division of Nuvei Corporation), and Fortis.
Regulations
The company is also subject to certain economic and trade sanctions programs that are administered by the Office of Foreign Assets Control (“OFAC”) that prohibit or restrict transactions to or from (or transactions dealing with) narcotics traffickers, terrorists, terrorist organizations, certain individuals, specified countries, their governments, and, in certain circumstances, their nationals. Similar anti-money laundering, counter-terrorist financing, and proceeds of crime laws apply to movements of currency and payments through electronic transactions and to dealings with persons specified on lists maintained by organizations similar to OFAC in several other countries and which may impose specific data retention obligations or prohibitions on intermediaries in the payment process. The company has developed and continues to enhance compliance programs and policies to monitor and address related legal and regulatory requirements and developments.
The company and many of its clients are subject to Section 5 of the Federal Trade Commission Act prohibiting unfair or deceptive acts or practices and various state laws similar in scope and subject matter thereto. Various federal and state regulatory enforcement agencies, including the Federal Trade Commission (“FTC”) and the state attorneys general, have authority to take action against payment processors who violate such laws, rules, and regulations.
In addition, the Dodd-Frank Act gave the CFPB broad authority to prohibit “unfair, deceptive, or abusive acts or practices” (“UDAAP”) in connection with the provision of consumer financial products and services. The CFPB has previously extended certain UDAAP-related provisions of the Dodd-Frank Act to directly apply to payment processors.
Certain of the company’s clients and its sponsor banks are financial institutions that are directly subject to various regulations and compliance obligations issued by the CFPB, the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and other agencies responsible for regulating financial institutions, which includes state financial institution regulators.
The company’s clients, particularly those in the personal loans, automotive loans, and receivables management verticals, are subject to various federal, state, and local laws and regulations that impose restrictions and requirements on their businesses. For receivables management companies, these laws and regulations could include laws and regulations (including the federal Fair Debt Collection Practices Act (“FDCPA”) and comparable state laws) regarding the time, place, and manner of communications with consumers regarding debt collection and prohibitions or limitations on certain debt collection practices.
The company is also subject to network operating rules and guidelines promulgated by the National Automated Clearing House Association (“NACHA”) relating to payment transactions it processes using the Automated Clearing House Network. Like the payment networks, NACHA may update its operating rules and guidelines at any time, which can require the company to take more costly compliance measures or to develop more complex monitoring systems. Similarly, its ACH sponsor banks have the right to audit its compliance with NACHA’s rules and guidelines, and are given wide discretion to approve certain aspects of its business practices and terms of its agreements with ACH clients.
The company is subject to U.S. federal and state unclaimed or abandoned property (escheat) laws, which require it to turn over to certain government authorities the property of others it holds that has been unclaimed for a specified period of time, such as account balances that are due to a software integration partner or client following the discontinuation of its relationship with the company. The Housing Assistance Tax Act of 2008 requires certain merchant acquiring entities and third-party settlement organizations to provide information returns for each calendar year with respect to payments made in settlement of electronic payment transactions and third-party payment network transactions occurring in that calendar year. Reportable transactions are also subject to backup withholding requirements. The company is also subject to the Telephone Consumer Protection Act (“TCPA”) and various state laws to the extent it places telephone calls and text messages to or on behalf of its customers. The TCPA imposes restrictions on, among other things, the use of automated telephone dialing systems, prerecorded voice messages, and unsolicited faxes.
Intellectual Property
The company owns a number of registered service marks, including REPAY and REPAY REALTIME ELECTRONIC PAYMENTS®, and it has other pending applications. The company also owns a number of domain names, including www.repay.com.
History
Repay Holdings Corporation was founded in 2006.
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