Cameron Bready: Yes, sure. It’s a good question, and it’s a model that we’re really proud of and we’re seeing a lot of traction on in the market. Not to be too cute, think about profac as all the gain and none of the pain for the ISV partner. They get all the benefits that they’re looking for as it relates to a payment facilitation model, as it relates to the boarding experience, the control that they have, the funding options on the back end, some of the spend back capabilities and virtual accounts that kind of come with a payment facilitation model, but they have none of the pain of everything that comes along with being a payment company, so think about that in the context of risk management and software to support risk management activities.
It’s compliance and software to support AML, PCI, audits, those types of activities in the business. We’re doing the underwriting and on-boarding teams, and we’re utilizing our software to provide that for these customers, then they don’t have to manage their own charge-back and cash accounts to support charge-backs and liabilities, etc. Then of course reporting, they don’t have to invest in that capability. They’re buying that essentially from us, leveraging our capabilities. Think of it, as I said, quite simply as all the gain that ISVs perceive come from being payment facilitation businesses, without the pain of actually being a payments company, and that model, as I said, is really resonating because it’s really the best of both worlds.
Mot payment facilitators don’t set out to become payment companies because they really desire to build all the infrastructure required to be a payments company. They want more control, they want a different on-boarding experience, and they want different back end capabilities from a settlement capability, etc., so I think it’s our model that really allows them to achieve that on economic terms that are advantageous for us and also beneficial for them, so it’s something that we think is really going to continue to grow in popularity in the market.
Dan Perlin: That’s great. I suspect that is going to be very popular. Thank you.
Operator: Thank you. Our next question is coming from the line of Tien-tsin Huang with JP Morgan. Please proceed with your question.
Tien-tsin Huang: Thanks so much. Good morning to all of you. On the integrated side, I liked, Cameron, how you went through that, as Darrin said. The record sales, can you just comment on what verticals specifically are selling well, and then across the three models that you discussed, you mentioned ambivalence between partner and owned. How about across those three models from a pricing and margin standpoint, any call-outs there? Thanks.
Cameron Bready: Yes, both good questions, Tien-tsin. On the vertical side, I would say it’s kind of across the board. I think we’re seeing good strength probably skewed right now towards non-discretionary spend verticals versus discretionary spend, but we’re seeing just great engagement with our partners, we’re seeing great lead flow into the business, and we’re seeing very strong conversion rates of lead flow to new merchant and new mid accounts for us, and I think I commented that mid account conversion was something up 33% year-over-year in the second quarter, so very strong just overall performance, I would say slightly skewed and much of our integrated business is skewed towards consumer non-discretionary, so I think that’s where we’re seeing obviously the strength in the overall portfolio as well.
As it relates to the different partner models that we operate, again we’re probably somewhat ambivalent. We’re really more focused on what’s the right model to meet the demands and requirements of the ISV partner, and there are plenty of situations where the right model for the ISV partner in terms of how they want to go to market and what it is they’re trying to accomplish is payment facilitation. There’s plenty of times when the right model for a partner really is direct integration, depending on, again, what it is they’re trying to accomplish, their objectives, their go-to-market strategies, etc. As I mentioned before, we think the profac model we rolled out this past quarter blends that in a way that works for some merchants but not all, so I think we’ve tried to structure each of those models where we’re somewhat economically neutral in terms of the overall net result for us, given the level of work that we’re doing to support a partner across those three models.
