Sometimes less is more — even when it comes to experience.

OpHouse Solutions, a Denver-area startup that sells distillery management software, needed a way to settle and track payments for its clients. The brewery market is vast and diverse — the U.S. has more than 4,000 breweries, the most in its history — so OpHouse CEO Brent Daily began looking for a small provider to address his big problem.

As a "bootstrap" business without outside investors, OpHouse doesn't have the budget to license a large payment processing platform, Daily said. But he does have a history of working with incubators and startups, which is how he came upon Orlando-based Fattmerchant, which manages payment processing, compliance and office supply ordering.

Brent Daily, CEO of OpHouse
Brent Daily, CEO of OpHouse

"In another life I was in the incubator community. We found Fattmerchant through one of the incubators and got in touch with them through a network of other developers," Daily said.

It's also not unheard of for payments innovation to come from beer and wine shops — ShopKeep began in a wine store in Brooklyn — as alcohol sellers have to deal with complex rules that vary by locality.

OpHouse's clients usually pay on a monthly basis for software, but the number of users and the need to settle and track transactions had grown cumbersome, Daily said. Fattmerchant's platform has a variety of payment options. OpHouse's plan is $79 per month with $0.15 per transaction. Fattmerchant supports branded receipts, analytics, transaction summaries, multi-location data and weekly reporting, placing sales and customer retention stats alongside payments.

The small to medium business segment that includes both Fattmerchant and OpHouse are conducive to automated payment processing.

There are two major trends converging to create a market for technology solutions to support the segment, according to Thad Peterson, a senior analyst at Aite Group.

"Running a business is complex, particularly if there aren't very many in house resources to support different activities," Peterson said. "To the degree that the stuff that people need to do to run their business can be consolidated and integrated, productivity is increased, information becomes more accessible and valuable, and expenses can be better controlled."

There are dozens of technology companies that provide payment processing and sales analysis. The difference in going with a startup and working through the incubator community is the connection between developers while both companies are young and looking to prove themselves in the market, Daily said, adding that in this case the players—the brewers, OpHouse and Fattmerchant—are relatively new companies.

"Payment facilitators, payment service providers and processors are fighting to differentiate their offerings to break out of the commoditized pack and add value through additional services along with transparent pricing and enhanced data," Peterson said.

Development communities are also growing. Centers similar to Toronto's MaRS are opening in cities globally. And CaixaBank, Visa and Citigroup are among the established financial brands using the concept of bringing developers, investors and entrepreneurs together in a similar venue.

"The advantage is you know what you are getting in terms of an early stage company," Daily said of the connection and willingness to quickly adapt as challenges come up, such as a recent case in which one of OpHouse's clients changed distributors on the fly, creating supply chain challenges. "It's always hard for a couple of small companies to get together and do something that's out of the box."

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