Greetings and welcome to today’s Earnings Conference Call being hosted by REPAY. With us today are John Morris, Co-Founder and Chief Executive Officer and Tim Murphy, Chief Financial Officer. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today’s results and in our most recent Form 10-K filed with the SEC. Actual results might differ materially from any forward-looking statements that we may make today. The forward-looking statements speak only as of today, and we do not assume any obligation or intent to update them, except as required by law. In an effort to provide additional information to investors, today’s discussion will also include references to certain non-GAAP financial measures. An explanation of these non-GAAP financial measures as well as a reconciliation of these non-GAAP measures to the nearest GAAP financial measures can be found in our earnings release available on the company’s IR site. I would now like to turn the call over to Mr. Morris. Please go ahead.

Thank you, operator, and good afternoon, everyone. We hope everyone is doing well and staying healthy. On today's call, I wanted to first give an update on our business in the third quarter followed by a review of how we're executing on our growth strategy with some exciting business announcements. I'll then turn it over to Tim to discuss our third quarter financials and guidance for the remainder of the year. As you can see from our results the value proposition for our business has continued to prove more evidence since the COVID-19 pandemic began almost eight months ago. For the third quarter, we reported 44% and 45% growth in card payment volume and gross profit respectively. Similar to Q2 and in Q3 we experienced increased demand for our offerings in several of our businesses across existing and new clients as our customers have accelerated the implementation of electronic payment capabilities. The pandemic has proven that loan repayments are resilient. Borrowers place a very high priority on staying current on their loan payments. The use of stimulus funds to pay down debt supports disbelief. We've also continued to see significant shifts to electronic payments over the past few months which has been and will continue to be a tailwind for our organic growth. Specifically auto loan repayments have been very strong which has been driven by an increase in auto lending and positive macro trends in the used car space. There is a lot of demand for used cars from people who are moving out of the cities or are more reluctant to use public transportation. Lower interest rates are contributing to the demand as well. Other lenders are accepting more payments on cards and are seeing increased clients which benefits us. Our customers are wanting to use more of…

Thank you, John. Now let's move on to our Q3 financial results before I review our financial guidance for the remainder of 2020. In the third quarter, REPAY delivered strong results across all of our key metrics. The third quarter card payment volume was 3.8 billion an increase of 44% over the prior year's third quarter. Total revenue was $37.6 million an increase of 43% over the prior year third quarter. TriSource, APS Ventanex and CPA Plus contributed approximately $10.2 million of incremental revenue during the third quarter. Moving on to expenses in the quarter. Other cost of services were $10.5 million compared to $6.8 million in the third quarter of 2019. The increase was primarily due to the additions of TriSource, APS, Ventanex and CPA Plus. However when excluding those editions the amount was down in Q3. Gross profit was $27.1 million, an increase of 40% over the prior year's third quarter. On an organic basis we saw gross profit growth in the high single digits compared to the third quarter of 2019. Please note that organic growth now includes TriSource. Organic growth was solid in July and September but August was flat due to the lapping of a very strong August 2019 for personal loan repayments. Also the increased mix shift to auto and the TriSource recovery resulted in slightly the lower gross margin for the quarter. However, our September organic cross profit growth was in the low teens and volume trends in October were strong which provides us continued confidence in our mid to high team's organic growth outlook. SG&A was $48.6 million compared to $55.1 million in the third quarter 2019. As a reminder in the third quarter of 2019, we incurred transaction costs related to the business combination with Thunderbridge. Excluding the impact of those…

At this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Craig Maurer with Autonomous Research. Please proceed with your question.

Yes. Hi, John and Tim thanks. So, first what was the composition of your business in terms of revenue or EBITDA, however you want to present between the different segments within your business and as we head into 2021, I wanted to get some additional color on how you're thinking about the personal loan vertical. Obviously, stimulus is not a guarantee and the volatility there, should we expect that margins should continue to be under pressure if that vertical does not improve? Yes. I will leave there. Thanks.

Thanks Craig. This is Tim. So the mix of the business was about 65% loan repayment, 20% B2B and 15% other. However, now with the CPS acquisition that mix is shifting more toward B2B, so we expect that to be more like 65% loan repayment, excuse me, 60% loan repayment, 30% B2B and 10% other going forward heading into next year. And then personal loans what happened this quarter is really a result of reduced originations in Q2 and we just saw less volume coming out of that origination dynamic. We have seen really positive trends in October where we've seen some of our larger personal lenders with more volume. And so we feel good about that and we're just monitoring it closely and that's part of the commentary around where we expect to see margins in Q4, just given some of that lack of visibility with personal loans. But the trend in October has been positive and it's something we're keeping a close eye on going into next year.

All right. Thank you.

And our next question is from Ramsey El-Assal with Barclays. Please proceed with your question.

Hi. Thanks for taking my question this evening. You mentioned some cross-sell opportunities with CPS. So maybe specific to CPS, but also just in terms of all the recent acquisitions you've done. Can you sort of rank order for us or give us more color on the cross-sell opportunities and kind of maybe help us dimensionalize the degree which that could have a noticeable impact next year?

Sure. So, the first one is both CPP and CPS. We can take their AP solution and sell it to our customers within APS on the AR side. So there's been a lot of demand for that over time and APS has not been able to deliver an AP solution to their customers where they're facilitating acceptance of card payments. And now those conversations are happening where they're offering both acceptance and AP. And similarly for example with some of CPS's customers, maybe a large hospital system for example we could offer acceptance services on acquiring services. So I think it definitely goes both way and we're actually starting to have some of those discussions on both fronts and getting more organized internally around how we want to roll that initiative out in a cohesive way going into next year. So it's still fairly early with both of those, but we're starting to see dialogue happening within the sales force.

Okay. And I also wanted to ask you about, if you kind of there is a bit of a higher elevation question. If you fast forward a few years, say five years how do you think REPAY's business mix looks like? I guess it's another way of asking, all the M&A you're doing, are you solving for a particular end state? Are you looking to drive diversification in a certain direction or do you have just sort of a target areas that you can basically acquire in and you're chasing kind of more opportunistic deals if that make sense? A - Tim Murphy Yes. I mean, I don't think we have a specific percentage we're solving for. We certainly have diversified quite a bit in the last 12 to 15 months where loan repayments have come down as a percentage of the mix and B2B has increased for example. And then, even within loan repayments we've seen auto become a much part of that, bigger part of that mix and now we see credit unions and mortgage increasing as well. And so that like I mentioned previously, prior to CPS and CPP it was probably 65, 20, 15 in terms of loan repayments, B2B and other today. Pro forma with what we know now it's probably 65, 25 and 10, and then into next year that becomes that looks more like 60, 30 and 10, the 30 being B2B. So we see it shifting to B2B. It's just a very large addressable market with a lot of room to grow, but we're not necessarily solving for a specific percentage.

Yes Ramsey, this is John. Good afternoon. I'll add to that the opportunity as you've heard me say before, we have been watching, I have been watching B2B for probably 10 years and the opportunity was there. If you remember we inorganically bought APS last year way before there was pandemic and obviously the pandemic proved some of our theories correct on the acceleration of the shift of payments to digital and we are seeing more and more of that. So we've been fortunate blessed that it was a good area for us to go to and it has all the attributes that we talk about. So the opportunities are there and we're chasing markets to try to achieve our organic growth rate, we think is a significant opportunity out there. But our current loan repayment vertical as well as the B2B vertical, the organic opportunity is significant. We think it's got many years of runway left on that. We don't necessarily have to go to another vertical if we find the opportunity to be there we will. We look big picture very long term. We think there's a significant opportunity to continue to drove both of those. Without inorganic acquisition growth kind of, will probably be hard to change the mix if both are really growing well, but obviously with acquisitions it can change that mix. From there it's just a matter of opportunities we see in the marketplace that really match who we are and what we you think we can do if you're listening to some of the attributes we look for from the software integration and the growth projections that we look for in those opportunities.

Great. Thanks for the answer.

And our next question is from Sanjay Sakhrani with KBW. Please proceed with your question.

Thanks. First question I guess Tim, you talked about the air pocket as far as like stimulus and its implications of the fourth quarter. I guess as we look ahead to 2021 how are you planning for the year on that front? What does it mean for growth and investments if there is stimulus or if there isn't?

Yes. So we are trying to focus on what we do best, which is provide high quality technology to these underserved verticals and really, really strong direct sales force and customer service and we've been investing from a sales and product perspective in auto. We think it's a very attractive opportunity. It's a very large market and that's been investing in. We've also been investing in B2B not only through acquisitions, but now new hires with each of those acquisitions. And so, we think that sets us up nicely and we can't necessarily predict the stimulus or if there is stimulus or timing of it, but what we can do is just monitor our top customers very closely and look for trends like we saw in October related to personal lenders for example and try to get a sense by looking at some market research and also having discussions with those customers about what's underlying those trends and if that's something we should be projecting. So just trying to get our arms around as much data as possible to inform what scenarios could look like with and without stimulus and timing of that but also just investing with the key investments are focused on auto and B2B.

Okay and you guys think, you can hit your historical growth rates whether I mean I assume there will be some sort of stimulus. It's just a matter of how large or how small. I guess as we think about whether it's small or large you guys think you can probably hit your long-term growth targets?

Yes. We felt confident like we talked about in the mid to high teens organic growth longer term outlook. We have a lot of avenues for growth in addition to auto and B2B. We talked about mortgage. We've had a lot of really positive momentum and mortgage related to the Ellie Mae partnership and then the STX announcement and so that's another area and then we've had a really-really good success this year in credit unions. We signed seven in the most recent quarter and we have a lot of targets out there just through our partnerships we've announced in that space. We now have three partnerships. So I think what we're trying to do is either organically or through acquisition set ourselves up with a lot of different avenues for growth and if one part of the business is down then other parts of the business will be up and that gives us the confidence that combined organic growth outlook I just mentioned.

Okay. Perfect. Just one follow-up for John maybe just could you talk to the pipeline of M&A like size and sort of where you're looking? It sounds like B2B area but maybe you could just characterize a little bit more.

Sure. Let me also kind of follow on Tim's last comment as well. Listen we're trying our best to be transparent with everything we can see versus just not giving any type of numbers and drawing guidance and things like that. We're trying our best here but also what we're also looking at is to have a complete absolute shutdown again that's something that could be significant to everybody; all public companies. So we're not seeing that and we're hoping praying that doesn't exist again but that could have an impact on how we see things happening in 2021 obviously but now on the M&A pipeline it is very actionable from what we see. We have been blessed to be very acquisitive in the last since we were public. We've done five acquisitions we see some good opportunities out there still and we obviously will have to do homework on those from a numbers perspective. We don't really want to forecast those. We never like to forecast that we have to do an acquisition. We are very particular and very specific about that as you can see where what we've done in the past and we're also very measured on how we want to make sure we incorporate those into our organization. So we look for these attributes. We see some and several in the marketplace with those attributes that they're coming to market. We are also going to be patient and be diligent with our shareholders money. So we're excited though. There can be some opportunities out there.

Thank you. Appreciate it.

And our next question is from Andrew Jeffrey with SunTrust. Please proceed with your question.

Good afternoon, guys. Appreciate you taking the question. I think the mix conversation is an interesting one especially as we start to think about mortgage and this Ellie integration. John can you give us a sense as to when you think you might be able to talk about some pretty significant mortgage payment volume? I assume maybe some of that STX revenues in the 10% that you talked about but I'm wondering when you think that's a vertical for, you're going to be discussing in more detail from a payment perspective?

Yes. Sure. So we are very excited about that if you think about we haven't seen anything like the exchange that we're kind of putting together there. We think that's a long term very value creation opportunity for us in the entire industry. It just really solves a lot of pain points and eliminates a lot of friction there but it also allows us the opportunity to gain additional foothold into solving other payment solutions and needs for those specific lenders and I would not say to us that's a longer term investment meaning over the next couple years. So we will ask you to be patient with us there because we see a significant opportunity and they'll create significant shareholder value long-term and integrations as we move into creating and developing that asset over time. So not an immediate term this bump but we do see activity happening and we see conversations happening and we're looking as we kind of move through the first part of 2021 we see additional wins out there but also moving into 2022 we think there's even more opportunity as we build that out. On mortgage especially when it involves large banks will take time those are longer sales cycles and decisions which is why you kind of hear me say let's be measured in that but we do think it's a really wise use of dollars.

Okay. Yes. it's an exciting opportunity. On the personal loan front which and please correct me if I'm mischaracterizing this but to the extent that there's current organic revenue growth deceleration it seems like it's coming from that line of business which is still 60% pro former or so. Is it demand or supply, is this an underwriting issue or is it a consumer demand?

Well to clarify within the 60% to 65% loan repayment personal loans is just a part of that. So it's probably about 30%. The rest the balance of that is auto and then there's a small portion still that's credit unions, mortgage and then our Canadian business. So personal loans is just a part probably about half maybe a little less than half of that a total loan repayment business and I think that when there was a lot of stimulus dollars out there when the CARES act really started flowing money out and the enhanced unemployment benefits were happening throughout April and May and maybe even into June. There was a lot of excess cash and so consumers were paying their loans, but there wasn't a lot of demand and so originations were down and they were down because consumers were flush with cash and also lenders were tightening credit trading underwriting standards. However, what we see and we think now is becoming a trend in our data is when the stimulus benefits ran out at the end of July or early August demand picked back because there wasn't as much cash in the system and consumers needed personal loans and so those originations that have started to occur in August and September are now resulting in repayments. And we think that's what we started to see at the end of September into October and that's kind of a trend that we have probably need a little bit more time to understand if that truly is a trend and will last. So I think that's how we've seen it play out certainly the CARES act direct payments to individuals helped with repayment volume but potentially hurt originations and that's what we felt this quarter and it's just a it's a little bit higher margin so even though our volume held strong that was really driven by auto and a TriSource recovery but auto is a slightly lower margin of personal loans and then TriSource at lower margin as well.

Okay. So just I am 100% clear to the extent that demand for these for personal loans has come back you don't have a strong sense that it's being blunted in any way by tighter underwriting standards.

No, I think it's there may have been a short period where that happened but I think that they started origin. our lender started originating loans more aggressively like I said in August and September and we're starting to see the repayment volume on that now.

Okay. Thanks. It's helpful.

For what we can understand and again remember we're not a lender in that particular piece of our book it's a demand issue. That's a good thing overall for consumers. It means they have more cash, they were spending less cash but we also think that that doesn't take long to turn.

Right, makes sense. Okay.

And our next question is from Peter Heckmann with D.A. Davidson. Please proceed with your question.

Good afternoon. Thanks for taking the question. Just to clarify trying to back into some numbers here but I think, TriSource and then within the quarter you'll -- at CPS and so in terms of thinking about just an amount of acquired revenue in the fourth quarter something in the $5 million, $6 million, $7 million or $4 million, $5 million, $6 million, $7 million is that about the right range?

Yes. in terms of the incremental revenue that sounds about right but we've included TriSource and organic growth numbers for Q3 and basically pro forma them for Q3, 19 and then yes we'll do the same thing with APS in Q4. So they'll both be in the Q4 numbers.

Got it. Okay. That makes sense. And then just in terms of that opportunity with the captives can you remind us when Mercedes-Benz was contributing a full quarter and how would you kind of size or think about the rest of the captives and are there some current prospects you think they're relatively higher probability for the next let's say a couple of quarters?

That was, we started processing with them in May and so they have been just continuing to ramp up and add volume each month and so that's been going really well. We're seeing that continue each month and we are trying to have discussions with other captives just through our network of relationships in the auto space and our relationship the card brands and others. As you well know, those are really long sales cycles and we have to sort of make sure that we're in the renewal discussions and they might put on our fees or we're trying to get ahead of that and make sure we're in those discussions and so that's where we are in terms of additional captives but Mercedes relationships now we've been now been processing with them for about I guess four or five months and it's going really well.

Okay. Good to go. I appreciate it. Thank you.

And our next question is from Joseph Vafi with Canaccord. Please proceed with your questions.

Hi guys good afternoon. I was wondering if we could maybe just kind of switch over to the integration side of the business. Clearly a lot of M&A activity. Maybe get some thoughts here on I guess to a certain degree cost synergies from here on acquisition activity and I know you're putting stakes in the ground in some different payment volume areas of the economy so also just wondering to the extent that provides or does not provide capability for more kind of tightly integrated technology integration on the back end and then I have a quick follow-up.

This is the question about just integration of acquisitions?

Yes. integration I mean the business side and if you look across your business and the potential for kind of integrating the various payment buckets into perhaps a single platform or do you think you've got to run a lot of different stacks to address some of these different payment areas that you're focused on at this point? A – John Morris: Yes. sure. This is John. I'll take that. So actually our integrations in the last 12 months are actually on track and on target. Starting with the APS, Ventanex and then CPS Plus. The first two have gone well and we've integrated most those through operationally and there's a few things we were changing on APS on the back end clearing the settlement piece over to our TriSource platform it's just been more of an acquiring asset that has been successfully done. So we're looking forward to going into 2021 with most of those pieces already integrated in. And I think it's a great point on the technology piece as we do feature parody we actually have, we go in and look from a work stream perspective. We lay out work streams for all of our acquisitions to determine how we integrate them and as I said they're all on back from that perspective but on the technology side we also do work streams around feature parody to understand how we get the stop sale and ultimately sunset. We are on track with all of those assets. Sometimes some of those are picking up some really good technology and we're also picking up some key integrations. So integrations will be, it's important as even with technology you have to work through your integrations those are critical to the whole CMOS piece of the payment piece that we do.…

Sure. That's helpful. Thanks John. And then just quickly kind of the outlook for, let's call it organic integrations if you're looking into next year. Some commentary around that and then I guess penetration, end user penetration in some of your existing integrations and the opportunity there? Thanks.

In terms of software integrations?

Yes.

We now have, you see that we've been able to accelerate those in recent quarters just because we have a lot more verticals to address and each of those verticals has their own unique software partners. And so that's something we placed a lot of focus on recently and putting resources toward that and so we think that's going to really benefit us longer term. And a lot of those now are coming from our acquisitions because we're helping them with resources. They are often times we find during diligence that there's partners that they want to have, but just have not been able to get them across the finish line or for various reasons not been able to actually sign them up and we're now helping them do that. And so we think that's just one other example of being able to accelerate growth with these businesses for acquiring. And so, in terms of the penetration question, a lot of them offer electronic payments like within their customer base, there's several providers, but maybe not as focused on the particular vertical or not providing all the different channels we have from a payment perspective for example mobile or web or IBR may just be a simple web-based or phone transaction without the other channels. That's how we see ourselves gaining share, increasing penetration and a lot of these different partnerships. So that's definitely a key distribution avenue for us and it's something that we're very focused on.

Yes. I want to add to that, all of you, most of you since we've known us we've almost, we've probably over doubled that software integration partner list and with GPS we're now 119 obviously some of those were through acquisitions. But we think that's substantial as we continue to build that out that represents lots of perspective customers inside of each one of those integrations. And I also want to emphasize, we continue to build out our supplier network now over 50,000 of those with our recent acquisitions, we think that would be a great opportunity over time as we look to continue to build those out that. They'll have some long-term benefits to it as that network builds over time. That'll create some, not sure it's really cross-sell opportunities as much as it creates some opportunity to continue to enhance existing customers or future customers as we bring them on, if we already have a supplier network that services many of those.

Great guys. Thanks very much. That's all I have.

Our next question is from Bob Napoli with William Blair. Please proceed with your questions.

Thank you. Good afternoon. The question on the mortgage business. Can you give a little more coverage on exactly what the servicing, the transfer of servicing and the revenue stream, the recurring nature of the revenue stream and the opportunity that you see with the likes of Ellie Mae. I mean are you competing with Black Knight in that business who are they, little bit color would be helpful?

Sure. So Black Knight is actually a software partner of ours, so they provide software to mortgage services. So they're software partner. Ellie Mae is more focused on originations. So those would all be partners of us not necessarily competitors. And right now there's a lot of ACH payments happening there. It's become electronic, but it's still pretty heavy ACH. One of our initiatives is to convert some of that to card and increase card penetration, which would be hard for us and so it's a per transaction based revenue model. We want to convert it to more of a volume based revenue model. And then we would pay a referral fee for example to a partner like Ellie Mae or Black Knight. So Ellie Mae has about 4,000 mortgage originators using their platform. We get involved in the kind of initial closing of the mortgage where there's maybe escrow fees or appraisal fees. There is the first payment. We would be involved in processing that and then there would be, that would be transferred to a servicer most likely and we could be processing the ongoing recurring payments with that servicer if they were our customer and so oftentimes we're involved in that kind of complex refinancing activity, service transfer related activity where if it's not done correctly it can create a lot of errors and that's why we're trying to automate it and make it more efficient and we get processing fees for that.

Okay. Thank you. And then, a question on the B2B payments business and the kind of the revenue and profit models between, the difference between the revenue streams on the AR business versus the AP automation business like how much of that is, is there software revenue on the AR side the pure transaction on the AP side? How much difference is there in the revenue models for those each the AR and the AP side of the business?

So on the AR side it's a typical merchant discount rate. So we're doing merchant acquiring for businesses in a business to business card based transaction. So very similar model where we're charging basis points on volume and then maybe a per transaction fee as well. And then on the AP side we are also getting bips on volume, but it's on the interchange and so we're basically on the issuing side where interchange is our revenue and then we pay processing partners and then have and there's also rebates involved we might pay rebates for virtual card usage and that's the model there. So it's also similar in the sense that its basis points on volume it's not subscription based or flat fee per month, but it's the interchange part of the transaction where we're getting the revenue versus on the merchant acquiring side it changes the cost to us.

Great.

There is also the concept of enhanced ACH on the AP automation side, which would be a percentage of volume and all that's designed to for seamless automation reconciliation and data transfers. So that's a version of that on the AP side. There is some of that as well on the AR and then there is normal just ACH transfers where you may have large file transfers and even potentially the mailing of checks which is automated as well, but predominantly --

And then, John the instant funding piece that you're launching what kind of penetration rate do you expect and what's the pricing on the instant funding fees?

Yes. That’s per transaction. So that's going to feel something like an ACH but that's a per transaction fee. So it's good margins for transaction but it's not it would not be bips as a percent of the transaction there. We're seeing for our users that are using it we're starting to see really strong activity there. We're still early on Bob, just kind of predict an exact penetration rate but for our specific lenders that are using it we are seeing really, we're seeing much over much growth in their penetration right there. So I don't want to quote one just yet as we wanted to see a little more, see how it's going, but we're seeing uptake and we're seeing also more people using it and just the automation pieces you can, this common sense says that's way more efficient and so we're seeing that.

Thank you. Appreciate it.

Our next question is from Timothy Chiodo with Credit Suisse. Please proceed with your question.

Great. Thanks a lot. I want to dig a little bit more into the automotive captive opportunity. I know that last quarter and earlier on this call you met as well you've increased your addressable market the analysis you've provided in the slides to better account for this opportunity. You mentioned also earlier some of the RFP processes and renewal timing that you want to get ahead of. In that light maybe you could just give us not mentioning any specific, but when we look at the top 15 or so automotive captives what's the status quo? What are they offering now to their consumers to repay the loans? Is it set up an ACH? It's just one payment method. Is it not multi-channel, omni channel, etcetera? Maybe just give us a sense of what the status quo is.

Sure. So very large addressable market and I don't want to give you any quoted names or anything like that because it is various different cycles but you hear me smiling. So it is longer sales cycles. So again, be patient here but specifically across the board there are some captives that merely, if you mail the payment in or it's an ACH kind of what we consider an ACH automatic draft and then maybe an ACH if they have an online presence but those who would not be using many of the omni-channels. They would need to be for the omni-channels meaning a complete IVT solution or maybe even a tech solution or a mobile solution as well. So we think there's web presence is generally the first presence there but the concept of 24/7 being able to take a payment that still exists in some of those players and definitely the ability to take a debit card I think that exists with a few that don't even take debit card. Now there's several who are have been taking debit card in that case that would be a competitive win but we have built certain features and functionalities to the auto re-lending space that we think can create winners for us. It's just a matter of timing and after we have to get there and win and then tell our story. Yes. We don't win everything but there's plenty there if we get our fair share we should do well.

That sounds good. Thanks John. A quick follow-up you mentioned this just a couple minutes back I just want to dig into a little bit the enhanced ACH offering came over a little bit from CPS and it's for use in accounts payable, fully recognize that it allows you to send remittance data. It's part of the workflow and the process reconciliation very important in accounts payable. Maybe you could just give us what the good use case is there. What's a good example sorry, a good use case for that relative to traditional ACH or virtual card? In other words when's a good time to use enhanced ACH?

I think if they're cost conscious about virtual card fees, but want more data and want a more efficient workflow the balanced product is enhanced ACH where it's not a straight ACH. So it doesn't cost the cost isn't as low but you're also getting much better data quality and data transfer. So it costs a little bit more than a traditional ACH, but not the same virtual card and so there's just certain players out there that want that product and want that kind of balance in between and which is hence why that product. And so but you also from our perspective can price it in a way that probably is more similar to a card transaction and make the economics a little bit better for us because the cost to us is lower and so that's why it's become I think more popular and something that CPS has done a really good job with and we'll continue to and we can now bring that to the CPA Plus customers as well.

Yes. That's very good. Yes that's right.

That one for one Tim that you're aware of listen you have a very large file thousands of payments and if you need 10 to 15 attributes per payment if you were to get that file in bulk and it's all on ACH and you got five of those attributes but now you got to pay someone to go find the other 10 attributes that just you kind of need or would like to supplement in a world of big data. We can do those one-for-one exchanges completely link it so it's seamlessly back into the ERP system. There is a tremendous amount of man hours and it's about man hours and it’s about speed and it's about the whole digital experience. And then we obviously can move and settle the funds and let exactly where the funds are settling and when they're settling the whole reconciliation of you can imagine when there's a check clear kind of concept. We can show how these various different movements are happening. It has tremendous value if you look at many hours that could be spent in AP and it eliminates and drives up certainty and drives and reduces errors and then drives down costs.

Excellent. Really appreciate the overview. Thank you Tim and John.

And our next question is from James Faucette with Morgan Stanley. Please proceed with the question.

Thank you. Hi John, hi Tim. I wanted to ask you mentioned that you're looking at some incremental or potential acquisitions but still work to be done there and you all indicated that you thought that diversification of the revenue stream at least by end market type, etc. would most likely come through acquisition. I want to make sure I understood that correctly but on the topic of acquisitions, how much flexibility do you think you have in your balance sheet right now and in the capital structure to go do acquisitions and I'm just wondering if you can achieve that diversification through a single acquisition or are we going to have to look at multiples to acquisitions within the same area to get to the diversification that you might be thinking about?

Yes. Sure. So I think the comments around organic versus acquisitions from a diversification standpoint is just that it just takes more time organically to move the needle and so although we have really solid organic opportunities in areas like mortgage and credit unions, it's just going to take time for those to be large enough to actually shift the mix whereas an acquisition can happen right away and we've seen a great example as B2B where about a year ago our percentage of B2B was zero percent. We didn't have a business there and now it's up to probably call 25% with if you include CPS pro forma and so we'd be looking for other opportunities on the B2B AP side. We now look at that like we did merchant acquiring where we're just out there acquiring new verticals is one way to look at or go deeper within existing verticals within AP and so that's something that we would want to focus on and that could bring that percentage of the overall mix up above 25%. So I think that was really the point of the comment but and then balance sheet wise we're at 2.3 times net leverage today. we would feel comfortable going up to called 3.5 to 4 times for something very strategic and so we have some flexibility there to do deals probably similar in size to what we've been doing and then if it was something larger we'd have to tap the equity markets and look at that. So we have some flexibility to do more M&A but if it was something larger it wouldn't be all debt financed.

Right that makes sense and then quickly I guess you may, you provide some color on the adjustments you made this quarter in commissions. I think previously you'd mentioned your commissions are maybe a bit lower than industry because you control the merchant relationship. Do you expect that to be the case as you enter new markets or how should we think about that part of the expense group?

Yes. So we do, we are very focused on rev shares. Historically we've been able to have we think lower than market rev shares to your point as we enter some of these new markets it will be more competitive particularly if there's already an existing payment provider or several payment providers but we try to structure those in a way that allows us to grow volumes with those partners and make sure that they benefit from that but not destroy our own margins and so we're focused on those deals and then we have the ability to restructure some of these commissions like we did this quarter either with direct sales reps or with partners, and we can typically do that at very good attractive multiples and we think that could make a lot of sense too. So that's just another tool we could use we felt like the dollars we are paying for commissions are residuals to partners were large enough we could just look to restructure them and bring more of that cash flow to our P&L.

That's really useful. Thank you.

And our next question is from Mike Grondahl with Northland Securities. Please proceed with your questions.

Yes, thanks guys. Two questions one your pipeline of ISVs does that kind of map the volume of the different verticals in your business or is there an area where maybe your pipeline's a little bit outsized compared to the volume and then secondly just in the personal loan space have you lost any lender customers kind of through the turmoil this summer?

So first question, I don't know that it maps one-for-one with the addressable market opportunities. It really is just more about where we're trying to focus resources. So there's still a lot of partners to get in auto for example there's still some we want in mortgage. There is a few [Indiscernible] and so we think of it kind of more strategically where do we want to be placing resources and where do we want to find a way to accelerate growth, and find this new distribution versus just strictly mapping to the largest stressful market size. So it's that same probably kind of loosely ties to that one-for-one and then in terms of personal lenders we've not lost any personal lenders. We're not aware of any that have been damaged to the point where they would be no longer lending or be out of business. It's just that some of their volumes are contracted as either they've tightened credit or demand it was lower used to originations but the larger ones that we're aware of and through our own monitoring and underwriting and we think that their balance sheets are still fine and they've weathered this pretty well.

Great. Okay. Thanks guys.

Yes.

And we have reached the end of our question-and- answer session and this also concludes today’s conference. Everybody disconnect your lines at this time. Thank you for your participation. Have a good day.

Thanks everyone.