Brian Kinstlinger: The net number is lower.
Thomas Priore: Yes, exactly, exactly. So but the boarding trends each month are pretty stable with where they’ve been historically.
Brian Kinstlinger: Okay. And then as you look at these, can you give the reseller number you added again? And do you expect that to accelerate the merchant count then from the 14,000 or 15,000 that you’re probably at adjusted for that reseller?
Thomas Priore: You know, remains to be seen. We think there’ll certainly be a modest impact upward. It’s 116 that have been added year-to-date.
Brian Kinstlinger: And that was 70 last year for the full year. Is that what you said?
Thomas Priore: 70 for the full year. Yes. Yes.
Brian Kinstlinger: Got it. Okay.
Thomas Priore: And look, I would submit to you, Brian, the more impactful thing, and the thing that we’re focused on with our resellers is the recognition of — because there’s just more opportunity just within your existing merchant base, right? These opportunities to harvest that no one’s providing these customers. They’ll pay — opportunities for vendor spend management where they can make incremental revenue, better optimize their working capital, use Priority’s tool to accelerate their cash flow by using our Passport financial platform. What that actually does for people, Brian, to put a fine point on it, so you can appreciate this at kind of a more genetic level. Customers that are on our gateway, have their funds reflected in their Passport account in five minutes or less.
If you’re not a gateway, but a processing customer, you’re getting that within the same day, typically 12 hours. Now, think about that if you’re running a restaurant on the weekend, more often, if you’re on a weekend, like in a traditional setting, you’re not seeing that money for two to three days, right? Because the bank is not open on the weekend. But Priority is. So we’re able to give people access to their money and ways to use it to pay vendors and negotiate better terms that are really meaningful, particularly in this economic environment. And that’s where we’re going. Like I said, we call it unified commerce experience. That’s what customers expect now. And you add to that the ability to take that money and push it out to a salon worker on a Passport account, or push the tips out to your servers on a Passport account, and now they can go out and spend and generate additional kind of interchange revenue that comes to everyone in that ecosystem.
It’s just a different model. And it’s a fintech model. It’s not a merchant acquirer model. And that’s a big part of the message we’re trying to get people to recognize. It’s a different machine, to Hal’s earlier question, it’s why we synergize things like Plastiq exceedingly well, exceedingly quickly. We’re built to optimize the performance of software and payment assets. And the results speak for themselves. We can point you to other examples, but we do it well because we’re very intentional about it. And this company, if I could say it is purely is this, it’s like we just have something prove. And everyone in here thinks that way.
Operator: The next question is from Natasha Otton of DGA.
Natasha Otton: Hi, good morning. You mentioned that the gross margin decline in the B2B segment was related to the addition of Plastiq, and how they need to report their financials differently from a GAAP standpoint compared to the rest of the B2B business. Could you please explain that further and why it’s treated differently?
Thomas Priore: Yes, I started to explain that last quarter as we acquired Plastiq and some of the different GAAP requirements, but I’ve got the benefit of sitting here next to Rajiv Kumar, who’s our Chief Accounting Officer, who does a fantastic job for us. So I’m going to let him try to answer that a little bit better this quarter, and see if we can dispel some of the other concerns out there in the market on that, those gross margins.
Rajiv Kumar: Thanks, Tim. so Plastiq, the business model is that they are merchant of the records in the transactions where they’re accepting payments. So they collect the gross fee as a principle and then they pay interchange as like all card networks or their service providers. And that is why GAAP requires in that scenario that revenue should be recognized on gross and all the interchange payments should be recognized as cost of services. Whereas, if you compare that against our merchant acquiring business, there, we collect fee from the customers of merchant on record, and then we settle them on their behalf. And therefore, they are not our fees, they’re not — the interchange is not our expense and therefore, we have to do that, netting that we do.
So hopefully, that answers the question. The real difference is that Plastiq is a merchant of record in all the transactions that they are processing, and therefore, we are required to record those revenue at the gross basis.
Tim O’Leary: The net effect there is that the margins for the Plastiq business look lower, but on a transaction basis, the revenue as we would think about it, maybe apples-to-apples to other parts of our business. Gross profit more approximates the revenue of Plastiq if it was looked at the same way as the rest of our business.
Rajiv Kumar: That’s correct.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tom Priore for closing remarks.
Thomas Priore: All right. Well, I hope everyone has an excellent weekend. I want to just thank everyone for taking the time to follow our story, learn more about where we’re headed as a business. We look forward to continuing to deliver for our investors. And rest assured, we’ve got a very dedicated team that hopefully, it’s starting to be very clear to folks, are laser-focused on performing. So thank you, everyone. Have a great afternoon and a terrific weekend. And given we’re not going to speak to everyone for a while. Fantastic Thanksgiving and holidays.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
