Jared Isaacman, Shift4 Payments CEO, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss the recent rise in payment transactions compared to March 2020, the future of contactless payments and much more.
BRIAN SOZZI: In this new age of social distancing, contactless payments are coming of age. Payment processor Shift4 payments is feeding off this momentum. The company IPOed this June and is locking in partnerships with some big names, like the Las Vegas Raiders and Uber Eats. Stock's up 58% since its first day of trading ended.
Joining us now to discuss is Shift4 Payments CEO Jared Isaacman. Jared, good to see you here. So your business is tethered to the fortunes of the hospitality industry. What are you seeing right now?
JARED ISAACMAN: Thanks for having me on the show. And it's true. So Shift4 Payments has around 200,000 customers across the United States. And a very large portion of them live within the food and beverage and hospitality industry.
And in terms of what we're seeing, we've been posting data on Shift4cares.com since really the heart of the COVID crisis. We're refreshing it daily. And it gives you a great indication of really where the low point was in March and then the recovery we've been seeing since. And that recovery is split up by vertical between hotels, restaurants, and specialty retail. And it really goes down to the state and zip code level.
And what we're seeing is generally pretty encouraging. So the country on a whole is still about 5% to 10% down from pre-crisis levels in terms of its payments volume. But when you start to drill in by states, you have states like Connecticut and New Jersey, which are largely commuter states. They're actually up year-over-year from where they were at pre-crisis levels.
And then certain states that probably depended on a lot of that commuter traffic, like New York and New York City specifically, well, they're still down. But by and large, from especially from where we thought we would be a couple months ago, the recovery has been rather extraordinary.
ALEXIS CHRISTOFOROUS: Jared, can you talk to us a little bit about the opportunity you see in sports stadiums? Congratulations on the deal you struck with the Las Vegas Raiders football league. You're now the official credit card processing company for them. But what do you see there? How do you hope to grow the business within sports stadiums?
JARED ISAACMAN: Sure. So Shift4 has branched out from our hospitality roots quite a bit. So kind of interesting of note, one of our customers is Caesars Palace. And inside Caesars Palace is the Forum Shops. And they rely on a certain type of retail software. And that retail software is eventually sold into UPS stores, which is very much specialty retail and very far away from hospitality. But by virtue of our integration and the success we had supporting such a demanding and complex environment, like Caesars and the Forum Shops, we wound up branching out and picking up that significant enterprise, UPS Store business.
Well, in the same note, a lot of the same software that lives inside major resorts also lives inside sports and entertainment arenas. So Shift4 was actually a natural, not just because of our location in Las Vegas and our customer concentration in that region, to kind of take our payment connectivity and bring it inside Raiders stadium. And from there, just like with the UPS Store example, we wound up branching into an entirely new vertical.
And now I'd say we're probably speaking to a large portion of the sport and entertainment venues across the United States, who even though this COVID situation has really been quite a setback for the industry, it's afforded them the time to look into things like QR codes and contactless forms of payments to better prepare the venue for when they do reopen. And Shfit4 is kind of a key partner in that endeavor.
BRIAN SOZZI: Jared, you really-- you have a fascinating story. You founded this company in your parents' basement. You're also a trained pilot. You led a company that is the largest owner and operator of ex-military aircraft. Are you out there still flying planes and jet fighters? How are you spending your free time?
JARED ISAACMAN: I have to think back to the S-1 and what we put in the risk and disclosure statements. I think it's probably in there that I'm still flying on occasion. It is true. I used to be the CEO. And I was the founder of what became the world's largest private air force, which also happens to be based in Las Vegas supporting US Air Force.
But considering our focus at Shift4 and how important our work is at Shift4 payments, I did give up the CEO job about six months ago. And the company is in really great hands right now. But I still occasionally fly upside down from time to time.
ALEXIS CHRISTOFOROUS: Way to go. I just couldn't do it, don't have the stomach for it. I know you're looking to grow your end-to-end processing business. That was an area of weakness in the last quarter. How do you hope to do that?
JARED ISAACMAN: Yeah, so I mean, that's been really the strongest growing portion of our business. So when we refer to N10, what we're talking about doing-- and this goes to the heart of our value proposition, which is kind of to collapse down multiple vendors and layers of expense into a single vendor solution that Shift4 provides. And that's what we refer to as our end-to-end processing volume. This is a value proposition that revolves around essentially delivering a lower effective cost to service.
Now pre-COVID, we were growing that end-to-end payment volume 40% to 50% year-over-year for four or five quarters. That kind of a value proposition still rings true in some of the most difficult of circumstances, in times like we've dealt with COVID. So even though that end-to-end volume was down in Q2 20 some odd percent, 22%, I believe, year-over-year, by June in Q2, it was up 4% year-over-year. And then we announced July was up 14% year-over-year. And that trend has continued.
So no doubt when card-present commerce was essentially shut down for two months in Q2, that's going to have an impact on virtually everyone. But that really, other than those two months, has not slowed down the growth profile of the business and that key performance indicator for Shift4, which is our end-to-end payments volume growth.
BRIAN SOZZI: All right, let's leave it there. Shift4 payments CEO Jared Isaacman, stay off of-- stay safe in the skies. You have earnings calls that do now, man. Come on.
JARED ISAACMAN: Absolutely. Thank you very much.