Credit and debt-card payment processor iPayment (NASDAQ:IPMT) rewarded shareholders yesterday with great Q3 results and signs of continued business momentum. Shares rose 15% in after hours from their $23 close to $26.40 and kept close to those gains this morning.

No wonder. Revenues jumped 105% from last year's Q3. Net income vaulted 142%, with total charge volume -- from which iPayment takes a cut -- up 135% from $736 million to $1.729 billion.

Notably, iPayment focuses on processing payments for small merchants -- to date, 70,000 small merchants -- up from 60,000 when Jeff Fischer wrote Why I Like iPayment. There, Jeff explains iPayment's business and how it can succeed in a killer competitive market. By laser-beaming small merchants, iPayment is not unlike payroll outsourcer Paychex (NASDAQ:PAYX), with its small business focus and competition against giant Automatic Data Processing (NYSE:ADP). And Paychex has rewarded investors just fine.

And there's a lot to like about iPayment, not least that its earnings release presents tons of information in a clear way. We love that the company includes all three financial statements. It amazes us that other companies use their PR to keep this information from investors, with the completely irrelevant non-answer that "they can get it in the quarterly report when we file it with the SEC." Uh, then what's the purpose of the earnings release? To spin, obfuscate, deny? Doh!

iPayment tells you in the first paragraph that it had a 20% tax rate for the quarter, so you know up front that earnings benefited from a lower-than-average rate. We don't know of more than another company or two that give tax rates in their earnings releases, much less announce that FY 2004 projections assume a much higher 35% tax rate.

There's more. iPayment management informs investors that they plan for 20% growth, but that's 10% to 15% apart from acquisitions -- and that those acquisitions may not initially bring margins as high. What companies ever tell you or imply anything but that acquisitions are brilliant, unparalleled, or accretive, even though research shows that most fail to add shareholder value?

Funny, but something tells me that management like this might just add value with acquisitions.

Shares aren't cheap comparing projected growth to 25 times forward EPS, but if you think the growth can continue for a long time, this may well be an excellent aggressive investment for those willing to accept little margin of safety in the nearer term.

Interested in iPayment? Share with others on our iPayment discussion board .