Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

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SEGMENT INFORMATION
3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATIONAt March 31, 2021, the Company has three reportable segments that are reviewed by the Company's chief operating decision maker ("CODM"), who is the Company's Chief Executive Officer and Chairman. The Consumer Payments operating segment and the Integrated Partners operating segments are each reported as separate reportable segments. The Commercial Payments
and Institutional Services (sometimes referred to as Managed Services) operating segments are aggregated into one reportable segment, Commercial Payments.

More information about our three reportable segments:

Consumer Payments – represents consumer-related services and offerings including merchant acquiring and transaction processing services including the proprietary MX enterprise suite. Either through acquisition of merchant portfolios or through resellers, the Company becomes a party or enters into contracts with a merchant and a sponsor bank. Pursuant to the contracts, for each card transaction, the sponsor bank collects payment from the credit, debit or other payment card issuing bank, net of interchange fees due to the issuing bank, pays credit card association (e.g., Visa, MasterCard) assessments and pays the transaction fee due to the Company for the suite of processing and related services it provides to merchants, with the remainder going to the merchant.

Commercial Payments – represents services provided to certain enterprise customers, including outsourced sales force to those customers and accounts payable automation services to commercial customers.

Integrated Partners – represents payment adjacent services that are provided primarily to the health care, real estate, and hospitality industries. In September 2020, the Company sold a substantial portion of the assets of this segment.

Corporate includes costs of corporate functions and shared services not allocated to the reportable segments.

Information on reportable segments and reconciliations to consolidated revenues, consolidated income (loss) from operations, and consolidated depreciation and amortization are as follows for the periods presented:
(in thousands) Three Months Ended March 31,
2021 2020
Revenues:
Consumer Payments $ 108,393  $ 86,031 
Commercial Payments 3,500  6,368 
Integrated Partners 1,404  4,534 
Consolidated revenues $ 113,297  $ 96,933 
Income (loss) from operations:
Consumer Payments $ 13,363  $ 7,152 
Commercial Payments (409) 764 
Integrated Partners 92  368 
Corporate (8,519) (4,725)
Consolidated income from operations $ 4,527  $ 3,559 
Depreciation and amortization:
Consumer Payments $ 8,579  $ 8,583 
Commercial Payments 74  76 
Integrated Partners 129  1,311 
Corporate 288  302 
Consolidated depreciation and amortization $ 9,070  $ 10,272 
A reconciliation of total income from operations of reportable segments to net loss is provided in the following table:
(in thousands) Three Months Ended March 31,
2021 2020
Total income from operations of reportable segments $ 13,046  $ 8,284 
Corporate (8,519) (4,725)
Interest expense (9,168) (10,315)
Other expenses, net (269) (346)
Income tax benefit 2,231  1,233 
Net loss $ (2,679) $ (5,869)

Substantially all revenue is generated in the United States.

For the three months ended March 31, 2021 and March 31, 2020, no one merchant customer accounted for 10% or more of the Company's consolidated revenues. Most of the Company's merchant customers were referred to the Company by an ISO or other referral partners. If the Company's agreement with an ISO allows the ISO to have merchant portability rights, the ISO can potentially move the underlying merchant relationships to another merchant acquirer upon notice to the Company and completion of a "wind down" period. For the three months ended March 31, 2021 and March 31, 2020, merchants referred by one ISO organization with potential merchant portability rights generated revenue within the Company's Consumer Payments reportable segment that represented approximately 23.3% and 20.1%, respectively, of the Company's consolidated revenues.

On September 22, 2020, Priority Real Estate Technology, LLC (“PRET”), a majority-owned and consolidated subsidiary of the Company, sold certain assets comprising its RentPayment business, which was part of the Integrated Partners reportable segment. The allocation of net proceeds from the sale, after transaction costs, to the PRET members included the return of each member’s invested capital in PRET and excess proceeds were distributed in accordance with the distribution provisions of the PRET LLC governing agreement. Approximately $51.4 million and $45.1 million of the excess proceeds were distributed to the Company and the non-controlling interests, respectively. The initial allocation of net proceeds remained subject to final adjustment with the PRET members at December 31, 2020. During the first quarter of 2021, it was determined that an additional $0.5 million of the excess proceeds are due to the non-controlling interests, which amounts were accrued at March 31, 2021 and included in Other expenses, net in the unaudited condensed consolidated statement of operations.

During the first quarter of 2020, RentPayment generated $3.8 million of revenue and $0.6 million of income from operations.