The Technology Association of Georgia’s newly released report on the financial technology industry in the state shows that influential companies are turning their eyes toward global markets.
TAG’s FinTech Society will host its annual all-day symposium on Feb. 4, releasing the new report on the industry ecosystem in the state based on a survey of 100 industry professionals and in-person interviews with 24 executives.
Fintech includes payment processing, peer-to-peer lending, personal finance websites, banking software and other segments driving Atlanta’s technology scene forward. The industry accounts for more than 30,000 jobs here, and the snapshot — a followup to an initial report conducted in 2012 — focuses on innovation trends that can help the industry continue to thrive. Georgia is home to more than 90 finTech companies, the top 50 of which have combined revenues of $72 billion, according to the report.
In the interview portion, the authors noticed anecdotally that large, publicly traded firms — like Global Payments Inc., appropriately — were more apt to be the ones prioritizing international expansion. That’s likely because they follow the growth of middle-class consumers and developing countries movement from cash to electronic payments, said Glen Sarvady, principal of payments strategy firm 154 Advisors and an author of the report.
“The bottom line is that payments activity, transaction growth and revenue potential is greater overseas in many cases than it is in the U.S.,” Mr. Sarvady told Global Atlanta.
That echoes what many executives from companies like First Data Corp. and TSYS Inc. told Global Atlanta in a report on the international promise of the payment processing sector, which was part of the recent Paying Atlanta Forward special report
For smaller companies and startups, the sentiment wasn’t one of outright fear, just of prioritizing the U.S. market. Mr. Sarvady summed it up like this: “We’re definitely going global, as soon as we go national.”
Beyond taking advantage of the simple rise of electronic payments, firms are finding profitable ways to introduce their niche innovations in global markets.
Or, as a section of the report authored by Elizabeth McQuerry of Glenbrook Partners puts it:
Looking forward, several Georgia companies are focused on emerging niches – the markets for which will certainly grow much larger once these products become more commonplace globally. Examples here include big data analytics, development of alternative credit scoring techniques, loyalty and affinity programs, as well as SME payments enablement.
Acculynk, an Atlanta-based company that helps processors verify the identity of card users, saw its solution last year adopted by RuPay, the national debit card network of India. BitPay, an Atlanta-based payments processor for bitcoin and other virtual currencies, says two-thirds of its merchants accepting the currency are based outside the U.S. Global Atlanta reported in recent years on the company’s office openings in Amsterdam and Buenos Aires.
The United Kingdom, where Invest Atlanta is leading a fintech trade mission this month, is also fertile ground for many Atlanta-based firms. Kabbage Inc., an online lender for small businesses, launched its platform in that market after just four years in business, while Cardlytics, which helps merchants provide rewards to card users, has gone a similar route, according to the report.
One-fifth of survey respondents said they were looking internationally, with India and Mexico topping the list of potential markets, though their regional outlooks varied, as Ms. McQuerry continues:
When asked which global region would represent the highest growth for their companies, survey respondents ranked diverse regions highly – that is, different companies are looking to different global regions for growth. Where are FinTech companies operating in Georgia looking to? In descending order – Southeast Asia, Western Europe, Eastern Europe, South America and Central America – received the most responses.
Though the report didn’t address it directly, there is evidence that the city’s fintech hub is also positioning it for inbound international investment. Merchant e-Solutions, a Brazilian subsidiary, just announced it would move its U.S. headquarters to Atlanta from California. The city also recently hosted a trade mission from the Netherlands and the Flanders region of Belgium focusing heavily on fintech and cybersecurity. A Russian venture capitalist said recently he had set up a $100 million fund to back fintech projects.
The full report includes much more detail on the innovation ecosystem, including sections on incubators, the debate over the health of Atlanta’s venture capital community, companies’ drivers of technology investment and how firms are developing and attracting talent
Asked what attracted them to Atlanta or keeps them here, proximity to talent was crucial, but one of Atlanta’s other global assets was considered even more important.
“The only factor that rated higher is another benefit from civic infrastructure decisions — Hartsfield-Jackson [Atlanta] International Airport,” the report reads. “Convenient access to customers and business partners is the No. 1 attribute of a successful business environment, according to our survey. Atlanta punches this ticket, on both a local and global level.”
Register here, or learn more about the event in the video below:
A downloadable copy of the report will be unveiled at the Thursday event.
Read Global Atlanta’s special report, Paying Atlanta Forward, here.