Atlanta’s role as a payments juggernaut has been cemented for decades, but it’s only now that the story is starting to resonate globally and attract firms from a broader slice of the fintech sphere.
That was the assessment of company executives and payments experts at the Cumming-Forsyth Chamber of Commerce’s “Fintech Factor” event April 25, which served as the company’s annual international roundtable.
The event also examined how communities — even those outside the pull of Midtown Atlanta’s magnetism — can better position themselves for the growing international interest in the financial tech sector.
Of the 120 or so companies that make up Georgia’s fast-growing fintech universe, a growing proportion hail from places like the United Kingdom, Ireland, Canada and Israel, having realized that it pays to be close to big-name payments brands like First Data and Global Payments.
Locally founded firms are also pursuing opportunities abroad, breaking into new markets and even positioning themselves to be acquired by bigger rivals looking for a foothold in the U.S.
IDology is one such firm. The Atlanta-based identity-verification firm was bought by U.K.’s GB Group plc for $300 million in February, just before it was named one of Georgia’s top fintech firms by the Atlanta Business Chronicle.
Acquisitions are one reason that even though large companies like Kabbage and startups like DataSeers are opening offices around the world, more activity for Atlanta is happening on the inbound side.
“More non-U.S. companies coming to Atlanta and looking at it as a great launching pad,” said Glen Sarvady, principal at 154 Advisors, which tracks the fintech sector in the state.
Sometimes, local companies don’t have a chance to get large enough to go global on their own.
“When a startup gets rolling and they have a solution that makes sense and they partner with the bigger players, they typically get gobbled up,” said Steve Villegas, vice president of partner management at PPRO, which helps payment processors offer local payment methods to merchants selling around the world.
Alex Bermudez, privacy consulting manager for the Americas at OneTrust, an Atlanta-born software platform helping companies managing privacy and compliance, said that acquisitions globally can open companies up to unforeseen liabilities, especially in an era of ever more stringent privacy rules.
“Growing and making that acquisition is too enticing and too attractive to turn down, but there’s that double-edged sword in that M&A process that really has to be considered: how you manage data and and how your company interacts with consumers going forward,” Mr. Bermudez said.
Increasingly, partnerships are key, and that’s one area where Atlanta shines, said Mr. Villegas of PPRO.
Going OTP for Talent
Perhaps more so than in other tech niches, payments companies have been resistant to follow other companies migrating into the burgeoning innovation centers of Midtown (NCR Corp. being a massive, gleaming exception).
Many have kept their offices around the Perimeter, and some have even have moved further out to places like Alpharetta, part of which lies in Forsyth County.
Because the industry is less focused on flashy appeals to consumers, it can afford to stay in the background, and because it’s highly regulated and complex, founders and executives tend to be further along in their careers. Those are the people who are more apt to have families and appreciate the lifestyle offered by the suburbs.
“(Investors say) companies that started in a college dorm room six months ago — those don’t tend to be the ones that are successful in the fintech space,” Mr. Sarvady said.
One of the biggest challenges for local companies is finding fintech workers with three to five years of experience. Credit cards may have been around since the 1950s, but fintech has only been seen as a separate career path for a few years. WorldPay in recent years donated $1 million to help Georgia Tech drive fintech innovation, while the Robinson College of Business at Georgia State University has created a fintech lab that serves as the physical home for the Georgia Fintech Academy.
Atlanta’s history as a payments hub means that it has a rich reservoir of talent at the higher levels, along with a critical mass of researchers in key fields. OneTrust — founded by Atlanta tech veterans behind companies like AirWatch and Manhattan Associates — were able to find one of the foremost privacy experts in the their backyard at Georgia Tech.
Affluent Cumming-Forsyth County, which sits north of Alpharetta, hopes that means more companies will give the area a look.
Already, some studies show that the highest concentration of tech workers in the metro Atlanta area lies at the north end of the Perimeter.
Tech industry project manager Scott Evans from the Cumming-Forsyth Chamber said it’s not a matter of attracting new people to the area but giving them more opportunities to work closer to home.
He said he sometimes (half) jokes that “our people are driving into Atlanta and are probably your bosses.”
Indeed, PPRO’s Mr. Villegas said he works in Midtown but lives closer to Alpharetta, hinting that he might look that direction once he hires more workers.
Forsyth County is in the process of setting up an incubator for businesses focused on blockchain, artificial intelligence, the Internet of Things and other cutting-edge tech sectors, Mr. Evans said.
Wherever they are in the metro area, Atlanta firms should be awake to the global economy, urged the Metro Atlanta Chamber‘s tech industry liaison Grant Wainscott, who gave a presentation about foreign investment in fintech at the outset of the event.
“Your competitors, whether located in Brazil or Singapore, they want to enter the U.S. market probably more than you want into their markets,” Mr. Wainscott said.
On the other hand, traveling the world to visit trade shows, or staying in touch with the international community here in Atlanta, could reveal a much greater potential client base for one’s own product or service, he said.
Mike Whitacre, international tax partner at Frazier & Deeter, provided an overview of tax considerations for companies looking to go global during the luncheon event, which was hosted at Dekalb Office, a company that helps design offices and workspaces.
Robert Long, vice president of economic development for the chamber, provided welcoming and closing remarks. Global Atlanta was involved in organizing and moderating the panel discussion.