Tax Season is a Huge Payment Opportunity for Auto Dealers & BHPH

Tax Season Opportunity
Take advantage of one of the few times of year you KNOW your customers have money for both down payments and loan payments.

The average tax refund last year was $2,869, according to Marketwatch.

As auto dealers, you know cars are only getting more expensive as manufacturers add more desirable technology and features. Tax season is a prime opportunity to target some of your prospects and turn them into buyers as they use their refunds to buy cars.

For most people, money is still very tight, and saving can be tough. According to two studies, Turbotax Free filers and the IRS VITA (Volunteer Income Tax Assistance) Program, almost half of the respondents said they needed their tax refund money for necessities, such as groceries, bills, or rent.

CNBC expects the refund number to be just a little bit higher this year at $3,100. CNBC also reports only 10% of refund recipients expect to use the money for investments. eBay conducted its retail study and found 37% of millennials receiving refunds are planning to spend the money on purchasing cars.

That means there are going to be a lot of potential car buyers out there. Make sure you don’t miss this opportunity.

Reap Two Huge Benefits

Per the IRS and Turbotax studies, almost half of respondents do not need their refunds for necessities, which means there will be a lot of people with money to spend on a car. Your dealership can benefit in two ways, as buyers:

  1. Make down payments for a car purchase (9% are expected to make a major purchase and cars definitely qualify, according to the CNBC article)
  2. Pay down debt, including existing auto loans customers have with you (the #1 expected use of tax refunds this year)

Check out the chart from CNBC with information provided by a GoBankingRates poll:

Tax refund plans according to CNBC and GoBankingRates

While using the refund for down payment money is easy to understand, if you hold a loan portfolio of any size, you could get a big bump in yield by receiving an early payoff. This might be even better for your dealership than customers using the money to buy a new car. The option of rolling over this loan into a bigger loan for a creditworthy buyer is a win/win, too.

Are you Ready?

There are lots of things to consider as we enter the peak of tax season. Do you have a marketing plan to target early payoffs or rolling a loan payoff and trade-in into a bigger, more expensive car? Do you have easy and convenient payment options allowing your new and existing customers to make down payments and loan payments?

To capitalize on tax season, you need to be sure you never miss a payment opportunity. The most basic place to start is ensuring you can accept payments via debit/credit cards, prepaid cards, and ACH/bank accounts. The next step is thinking beyond your normal business hours and beyond the physical boundaries of your brick and mortar dealership. Can your customers make loan payments online, on a mobile app, or via text or Interactive Voice Response (IVR/phone pay)? It’s important to make the payment process as convenient as possible so you don’t miss cashing in on that tax refund.

Other points to consider during this time have to do with prepayments. Do the loans you hold in-house have a prepayment penalty? What about your best lending partners? Do you use precomputed interest? If there is a charge for prepayment, no matter how small, then your portfolio can:

  • Earn fees from the penalty
  • Earn other fees related to the loan payoff
  • Use the funds to lend to a new borrower at a possibly higher interest rate
  • Roll this balance into a new bigger loan for the same borrower

The numbers are clear. In Q4 of 2019, household debt crossed $14 trillion, an all-time high, according to Reuters. Many families do not have extra money sitting aside for a car. The one significant opportunity you have to collect loan payments or get customers into a new car is during tax refund season. Don’t miss it!

REPAY to Attend the 2020 KBW Fintech Payments Conference

KBW Fintech Conference

ATLANTA–(BUSINESS WIRE)–Feb. 20, 2020– Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced that the Company will present at the 2020 KBW Fintech Payments Conference on Tuesday, March 3, 2020 in New York, NY. The presentation will begin at 2:40pm ET.

The presentation will be webcast live from the Company’s investor relations website at https://investors.repay.com/ under the “Events” section. An archive of the webcast will be available at the same location on the website for 90 days.

About REPAY

REPAY provides integrated payment processing solutions to verticals that have specific transaction processing and technology needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity and enhances the experience of electronic payments.

Source: Repay Holdings Corporation

Investor Relations Contact for REPAY:
repayIR@icrinc.com

Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com

REPAY and Visa Host AFSA Webinar on The Borrower’s Digital Lending Journey

Borrower's Digital Lending Journey_AFSA Webinar

REPAY and Visa hosted a webinar on The Borrower’s Digital Lending Journey for the American Financial Services Association (AFSA) on February 20, 2020. Susan Perlmutter, Chief Revenue Officer for REPAY, and Scott MacWilliams, Vice President, Merchant Sales with Visa, discussed the borrower’s journey and the tools and services lenders can implement to transform the lending experience from beginning to end.

AFSA Members can view the recording here.

Payment Options for Millennial Borrowers

Millennial Payment Options

At this point, millennial borrowers probably make up a large portion of your customer base, so it’s important to understand their spending habits and priorities. The American Institute for Certified Public Accountants (AICPA) conducted a study of millennials and found 70% believed that financial stability was the ability to pay all their bills each month. So, according to millennials, stability means striving for zero payments due at the end of the month.

If you lend to millennials for student or consumer loans, think about this definition of financial stability and the simple aspiration of just paying the bills each month. According to Investopedia’s analysis of the AICPA study, one in four millennials had late payments or interaction with a debt collector. As a group, these borrowers are often loaded down with debt and still receiving financial support from their parents.

And thanks to social media and the immediate gratification lifestyle, millennials may often be more concerned about chasing the latest technology gadgets and the same experiences and things their friends have. With all these competing priorities, consumer lenders can be the last to get paid.

What’s a lender to do?

How Millennials Bank

It should come as no surprise that this group of borrowers uses mobile banking more than any other. The Balance uncovered some interesting banking trends and found the three things millennials do most often on their mobile banking apps are:

  1. Schedule person to person money transfers
  2. Transfer funds between accounts
  3. Check their transaction history

Here’s what they are not doing: checking their accounts to see if they have the funds available to pay you after they’ve paid for rent, internet, utilities, and fun.

While they may like their banks, they love technology more. They will jump at the chance to switch to another bank, fintech lender, or credit union if their bank is too inconvenient or if their mobile banking app is too slow or archaic.  Bottom line: millennials love mobile functionality and convenience. Are you leveraging this and making it easy for them to pay you?

Offer Payment Options

Millennial borrowers are starting to earn good money, so many are able to repay you at some point during the month. Yet, if you aren’t convenient or easily accessible, they will likely forget about you until after they’ve paid everyone else.

Many lenders think ACH is the answer, and automatic drafts out of their borrowers’ bank accounts are the best solutions for guaranteeing payments. It’s possible, however, that given their spending habits, your millennial borrowers won’t have enough cash in their accounts to clear the payments.

Why not offer payment options that fit into their daily lives and are easily accessible whenever your borrowers are ready to pay?  Mobile apps and text pay are great options that put you exactly where your customers are – on their mobile phones. You can send payment reminders, balance updates, and marketing campaigns via push notifications or text messages.  Your borrowers, in turn, can initiate and authorize payments and chat directly with your customer service representatives. Interactive Voice Response (IVR) enables borrowers to make payments 24/7 over the phone without ever speaking with a live agent.

Millennials value little above convenience and tech-savvy options. You can use this to your advantage to ensure you get paid and keep default rates low. Make it easy for them, and you will get paid.

If your payments system doesn’t offer options like IVR or text pay, contact REPAY to request a demo. You’ll see for yourself that these additional payment options will help you collect more easily from this fast-growing group of millennial borrowers.

REPAY Named Finalist in CreditUnions.com’s 2020 Innovation Series

CreditUnions.com Innovation Series

REPAY is proud to announce it has been named a finalist in CreditUnions.com‘s 2020 Innovation Series, powered by Callahan & Associates. During the Innovation Series webinar on Tuesday, February 18, 2020, Fleurette Runyan from REPAY discussed how REPAY helps credit unions reinvent and elevate the member experience through payment technology.

Meet The Payments Finalists For The 2020 Innovation Series | Credit Unions

REPAY Announces the Acquisition of Ventanex

Ventanex

Upsizes Existing Credit Facility to $345 million

ATLANTA–(BUSINESS WIRE)–Feb. 10, 2020– Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced the acquisition of Ventanex for up to $50 million, of which $36 million was paid at closing. The remaining $14 million may become payable upon the achievement of performance growth targets. The closing of the acquisition was financed with a combination of cash on hand and new borrowings under REPAY’s existing credit facility. As part of the financing for the transaction, REPAY has entered into an agreement with Truist Bank (formerly SunTrust Bank) and other members of its existing bank group to amend and upsize its existing credit facility by $115 million to provide additional capacity for growth.

Ventanex, founded in 2012 and headquartered in Dallas, TX, is an integrated payments solutions provider to the consumer finance and B2B healthcare verticals. Ventanex’s technology platform offers inbound and outbound omnichannel payment solutions and complex rules-based processing. Ventanex enables its clients to send and receive funds across numerous payment types, including but not limited to, ACH, debit card, credit card, virtual card, and check. The Ventanex solution is deeply integrated into its clients’ workflow via connectivity with their primary enterprise software solutions.

“The acquisition of Ventanex advances REPAY’s overarching strategy of being the preferred payments provider to high-growth verticals where our technology and payment capabilities serve as differentiators. The consumer finance and B2B healthcare markets will provide significant growth opportunities, as these verticals are in the early stages of a secular shift from legacy payment mediums to the more innovative and varied payment solutions in which we specialize. Additionally, Ventanex’s consumer finance and B2B focus aligns well with our existing client base, allowing us to provide both customer sets with more robust offerings,” said John Morris, CEO of REPAY. “We are eager to welcome the Ventanex team into the REPAY family and look forward to working together to grow our consumer finance and B2B healthcare businesses.”

“We are thrilled to partner with REPAY to accelerate our growth in the consumer finance and B2B healthcare verticals, as both markets are large and present numerous value creation opportunities. We expect the combination of our product suite and REPAY’s distribution capabilities to drive meaningful growth in our core markets,” said Chris Sanders, CEO of Ventanex.

Transaction Details

  • REPAY acquired Ventanex for $50 million
    • $36 million was paid at closing
    • Up to $14 million may become payable through two separate earnouts, which are dependent upon Ventanex’s performance for the 12-month periods ending December 31, 2020 and 2021
  • The acquisition was financed with a combination of cash on hand and new borrowings under REPAY’s existing credit facility
  • As part of the financing for the transaction, REPAY has entered into an agreement with Truist Bank and other members of its existing bank group to amend and upsize its current $230 million credit facility to $345 million
    • Approximately $255 million was outstanding under the credit facility at the closing of the Ventanex transaction
  • Combined net leverage is expected to approximate 3.7x on a post-transaction basis
  • In 2019, Ventanex is expected to generate approximate revenue, gross profit, and adjusted EBITDA of $12.00 million, $6.50 million, and $4.25 million, respectively

Strategic Rationale

  • New, Attractive, High-growth Markets
    • The consumer finance and B2B healthcare markets have large addressable markets and provide numerous technology-centered value creation opportunities
    • Ventanex’s mortgage loan servicer focus materially expands REPAY’s addressable market by approximately $500 billion. Ventanex’s solution is integrated with the largest mortgage loan servicing platforms, including Black Knight and Fiserv
    • Ventanex’s foothold in the B2B healthcare vertical will allow REPAY to pursue the high-growth, $170 billion market for outbound healthcare payments
  • Cross Sell Opportunities
    • Similar client bases largely comprised of companies that service loans
    • Ventanex’s products are highly complementary to those of REPAY; therefore, bi-directional cross sell opportunities exist
  • Growth Acceleration
    • REPAY believes that its distribution, technology, and processing capabilities will accelerate new client wins
    • Additionally, REPAY expects continued professionalization and infrastructure investments to enable Ventanex to scale and move up-market on the customer dimension

Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding REPAY’s industry and market sizes, future opportunities for REPAY, as well as the Ventanex estimated full year performance metrics. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

In addition to factors previously disclosed in prior reports filed with the U.S. Securities and Exchange Commission and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: a delay or failure to integrate and realize the benefits of the Ventanex acquisition and any difficulties associated with marketing products and services in the mortgage or B2B healthcare vertical markets in which REPAY does not have any experience; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets; risks relating to REPAY’s relationships within the payment ecosystem; the risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to develop and maintain effective internal controls.

Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding REPAY’s industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

About REPAY

REPAY provides integrated payment processing solutions to verticals that have specific transaction processing and technology needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity and enhances the experience of electronic payments.

Source: Repay Holdings Corporation

Contacts

Investor Relations Contact for REPAY:
repayIR@icrinc.com

Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com