Priority was founded in 2005 by Thomas Priore as a cutting-edge digital payments technology solution for merchants and businesses. Over the years, under Priore’s leadership, the company quickly scaled, attentively following emerging market trends and adapting to customer needs. This approach enabled Priority to evolve into a full-service solution for collecting, holding, and disbursing customer payments, providing a more efficient and intuitive way to handle transactions. Thanks to a proactive agenda, Priority navigated unexpected challenges that have shaped the current economic landscape and turned obstacles, including the volatile financial aftershocks of the COVID-19 pandemic and economic downturn, into advantages. By leveraging their robust technology stack and capabilities, they were able to help merchants and businesses pivot quickly to maintain sustainability.
Today, Priority (NASDAQ: PRTH) is a quickly growing $663.6 million corporation on track to grow another 12-14% in 2023, according to their reported full year financials. As a leading payments and banking solutions and services provider, they meet the diverse needs of businesses and financial institutions by enabling them to take and make payments, manage business and consumer operation accounts, and monetize payment networks. “We felt like we could build tools that would accelerate and create a modern experience of merchant acquiring for resellers. For merchants, we give them essential tools to manage their business like the ability to accept several forms of payments, offering reporting and analytics to provide better customer insights, and access to other features and components that traditional banking doesn’t provide but that add value while simplifying the customer-facing experience (in-person and online) and back-office business operations through our web applications,” explains Priority Executive Chairman and CEO Thomas Priore. “From our founding in 2005, business was cash-flow-positive in 22 months, and that only reinforced our strategy.”
The Evolution of Priority: A Strategic Approach to Diversification
Through a series of strategic investments, mergers and acquisitions, Priority has moved with fluidity to broaden the scope of their capabilities and expanded their footprint. “We’ve built with a different mission or purpose than many of our peers,” Priore notes. “We wanted to always be a single platform to handle digital payments and integrated payment operations for our customers in just about any industry and segment. These are all things we do (referring to payments processing for B2B, enterprise, and merchants/small businesses) — but that’s a by product of having an engine that is built for all of these discrete channels within electronic payments. Right now we serve 800,000+ customers.”
Among the industries they serve are: healthcare, retail, restaurants, construction, and real estate management, to name a few. Through app integration Priority serves the payment solution needs of their clients including: customer payment, supplier/vendor payments, document services, reporting insights and business analytics on cash flow and financials, which flow into their unified commerce engine called Passport.
“We’ve built a toolset that disrupts the traditional payments framework. It collects, stores, and sends money in an easy to use platform and can automate processes that apply to the vast ecosystem of payments,” said Priore on Passport. For many business owners, it can be difficult to manage separate systems that don’t work together. Priority has been focused on solving for that painpoint across the broad spectrum of industries that their customers and prospective customers do business in, and according to Priore, this diversification approach has helped in Priority’s growth. “We’ve been very intentional about being balanced in our technology development in that regard. Being diversified and having businesses that will perform well across economic cycles is a big thing that differentiates us,” states Priore.
Why Building a Diversified Business Model Works
According to Thomas Priore, having a “one size does not fit all” strategy is what’s led to Priority’s success. For instance, recognizing the payments and regulatory challenges facing the fast growing CBD and high risk consumer markets, Priority saw an auspicious opportunity to create a synergistic digital payment system that supported these industries with retail and in-store payments while allowing business owners to follow the strict regulatory and compliance requirements necessary to operate legally. Priore says, “ Our SMB solutions for CBD merchants lets these businesses sale products quickly, easily, and securely with a consistent and reliable solution that integrates seamlessly for total business operations.” This business model has enabled Priority to reach a segment of customers that some in the industry aren’t capable of working with, because Priority’s technology and payments knowledge was the foundational piece that was already in place.
The Role of Innovation in Diversification
Staying ahead of industry trends and emerging technologies has put Priority at the forefront of innovation in the digital payment solutions revolution. But what role does innovation continue to play in the company’s future? Thomas Priore asserts that innovation allows for diversification, but it means taking risks and making investments that move towards the future – like cloud infrastructure.
Thomas Priore remembers thinking, ‘You know what? There’s this new thing called the cloud. If we could implement that in our infrastructure, what could that do for the way we operate the business?’ They’d find out. “We were built in the early 2000s. We quickly migrated to cloud infrastructure. It allowed us to build things in more modern software applications that are not as hard to rewrite,” Priore explains. “That was a big investment for us at the time. We built our own curated cloud infrastructure. It was over a $1-million commitment. The cloud enabled us to really have a more modern architecture to build our software on that was much more scalable.”
Meanwhile, many of Priority’s peers who’d launched back in the ’70s and ’80s found themselves sitting on legacy mainframe technology that was difficult to move away from and had inherent limitations. “So, it makes it difficult to be as nimble,” Priore says. “…They’re great businesses, but I do think they’ll struggle to keep up with us in the future, and that will probably lead to some of their investment decisions and probably their customers will look to people like us with modernized solutions.”
In addition to increased sales revenue and continued fiscal stability, strategic business diversification also delivers increased resilience, adaptability, enhanced competitiveness, and market presence, which make businesses stronger.
Final Thoughts: The Impacts of Today’s Economy on Business Performance
When asked about the current state of the US economy, Priore says, “I’ll just say there are known uncertainties out there. Inflation, interest rate pressure, the growing debt burden on consumers… And look, those will change vertically. Some will benefit, some will be hindered. But generally speaking, it’s going to be a tough economic environment at a macro level for the next 18 months to two years. I think it’s going to be the economic reality.” He also went on to say that diversification is the way smart businesses will weather any storms and challenges that come their way.
While building a business from the ground up hasn’t all been smooth sailing, having the grit to overcome obstacles, and Priore says learning from challenges was an invaluable education. “I applied these lessons to Priority to diversify our business so that when events unfolded that were out of our control — we don’t control the economy, we don’t control regulators — to make sure we have the agility to overcome those things,” he says.
Looking ahead, Priority will continue to explore, innovate, implement, and diversify in a customer forward, digital experience-enhancing way. Embedded finance opportunities and nontraditional banking technologies and solutions will play an increasingly critical role in the next step of their evolution. “Our mission is to lead the payments industry to the future,” says Priore. “We happen to think that that future is an experience where commerce — which is more than just purchasing something — but upon a transaction, distributing all of the funds of that transaction to all the constituents in the value chain.”
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