Atlanta is flush with payment processors that handle more than 70% of the nation's transactions. These players now plan to expand their reach even further, hoping to make the southern city a fintech hub to rival Silicon Valley and New York.
And Georgia's capital city is focusing on education to make that happen.
The American Transaction Processors Coalition, in conjunction with the Metro Atlanta Chamber and the Technology Association of Georgia, established a FinTech Task Force in September to help retain and grow the fintech community in the city and, more broadly, the state.
A short-term goal is to provide foundational courses to area universities and in the longer term set up two-year and four-year certificate programs, which will focus on a broader set of financial services-related categories including cybersecurity, design and payments.
Instead of catering to Wall Street's needs as many finance curriculums do, Georgia wants to make sure the country's payment processors, of which 60% are based in the state, get what they need. And what they need are passionate, young developers that aren't distracted by the shiny startups on the East and West Coasts.
"There is a youth movement in development that tends to chase after the shiny object, the sexy and fashionable companies that get their names splashed all over Twitter," said Greg Boardman, chief technology officer for North America at Ingenico. While the point of sale hardware maker is headquartered in France, its base of operations in the U.S. is right outside Atlanta in Alpharetta, Ga.
Young developers don't gravitate towards jobs with foundation and stability, said Boardman, but instead are pulled in by unicorn companies that aggressively market disruption. The reality check comes shortly after.
The complexity in finance is highlighted by the large swaths of startups that pivot to new business models. For instance, New York-based Regalli debuted as a digital remittance provider but three years later relaunched in the business-to-business payments market. According to company co-founder Inigo Rumayor, the switch came about after he realized, "Most of what I thought I knew turned out wrong."
In remittance, Regalli found high rates of online fraud, cumbersome compliance burdens, expensive customer acquisition costs and a userbase that transacted predominantly offline.
Legacy players tell startups, "here are the cliffs you don't have to jump off of because we've done it and there are the bodies lying on the ground," Boardman said. But many times startups decide "to jump and bounce off the castle walls before they ask for the key."
A fintech curriculum could help pioneering young people understand the market before wasting time reinventing the wheel, he contends.
The program would also teach specialized training such as PCI and EMVCo standards, instead of new hires being trained on these requirements from within a company.
Not that everything has to be done the same way it has been for decades. But changes often happen slowly in finance because of the complexity and seriousness of dealing with money. Plus there's too much invested in the legacy systems to just toss them out altogether and start fresh, Boardman said.
"There's sexy and then there's stupid," he said. "Sexy is taking something technologically complex and creating solutions that work friction-free in the context of what's there."
For those developers that understand finance and payments, Ingenico and the other "dinosaurs" (as Boardman calls the incumbents) have projects with the same depth and excitement that they expect from startups.
For instance, Ingenico is working on embedded payments and how to secure those payments with the largest retailers, the largest banks and even the National Security Agency. While these use cases are highly regulated and can become routine and repetitive, the projects are no less important to shaping a changing industry, Boardman said.
WorldPay, Fiserv, First Data, TSYS, Global Payments and even emerging players such as Kabbage and BitPay, a Bitcoin merchant services provider, call Atlanta home, giving the city the nickname Transaction Alley. It's the epicenter of payments with large, global banks right next door.
This can be particularly enticing for young developers and startups in fintech, since it means even if the startup fails and the developer winds up unemployed, there's a safety net in the area's legacy companies. Plus Atlanta has an active social scene and a low cost of living.
"Just knowing that information has helped me in recruiting; for anyone interested in payments, it's hard to ignore," said Boardman.
And the political environment is favorable as well.
Industry groups in Georgia have worked to educate legislators at the local, state and even federal level on the importance of the fintech industry. Payment processing companies in metro-Atlanta employ more than 30,000 people directly, with more than 250,000 people working in related fields.