How To Disrupt An Industry

With all the advantages of Orlando’s tech corridor, Suneera Madhani has built a fast-growing company now known as “The Netflix of Credit Card Processing”.

Like other millennials who have upended traditional industries, Suneera Madhani is fast on the heels of her larger competitors—and she has no plans to slow down any time soon.

Five years, ago, Suneera Madhani lobbied hard at her former employer, a credit card processing company, to convince her bosses to make a big change: do away with per-transaction fees and confusing add-on costs and move to a subscription-based model. “I told them, transparency is the new wave. Consumers are getting more and more educated and this model is not going to work in the future,” she recalls. “They didn’t like the idea.”

So Madhani quit her job and started Fattmerchant in Orlando—FATT stands for Fast, Affordable Transaction Technology—offering merchants monthly subscriptions for credit card processing and related services. Instead of seeing costs grow incrementally with increased sales, Fattmerchant members save money as they grow because they pay a flat rate rather than per transaction. They also get access to proprietary technology that is integrated with a variety of software and online backend services—whatever financial or bookkeeping software the merchant uses, Fattmerchant can feed into it seamlessly. She notes that retailers may not reap the full benefits under a threshold of $7,000 per month in transactions. “But once they go above that, they’ll want to switch to us,” she says.

Indeed, they have. Fattmerchant has seen double-digit growth every year, from $5 million in transactions in 2014 to more than $1 billion in 2017. “This year we’ll cross $2 billion, so we’ve been growing fast, to say the least,” she says. The company has also swelled exponentially on the employee front: from just four people the first year to now 60 employees working at the Orlando headquarters.

“Because Orlando’s tech corridor still has fewer companies competing for the best of the best, Fattmerchant can stand out, particularly with a corporate culture designed to maintain the cool startup vibe.”

Initially, before the company was known, being based in Orlando was a challenge for recruitment. High-tech employment is typically linked with cities like Austin, Portland, New York, and of course, Silicon Valley. “With Orlando, everyone thinks of Disney World,” she says. “And Disney is great—I have a two-year-old daughter—but there is so much more here.” There is, for example, the city’s rapid growth. Orlando took second place on the Forbes list of best cities for future job growth, expected to increase by 3.2 percent in 2018, compared to just 1.2 percent expansion for the typical U.S. city. Orlando also claims one of the top-10 fastest growing millennial populations, according to the Brookings Institution. Credit, in part, goes to a $15 billion investment made over the past few years to improve the city’s infrastructure, says Tim Giuliani, president and CEO of the Orlando Economic Partnership. That includes airport renovation, interstate rebuilding and a bustling downtown with new entertainment venues and sports arenas. “We hear talk about the crumbling infrastructure [in the U.S.],” he says. But that picture doesn’t match what he’s seen in central Florida. “We’re rebuilding and growing while other cities are still grappling with how that to do it.”

Madhani also cites access to the talent coming up at the nearby University of Central Florida, the largest in the country; Fattmerchant has hired several full-time employees through its internship program with UCF, which regularly pursues partnerships with companies to help students get hands-on training and enable businesses to fill their pipelines. Because Orlando’s tech corridor still has fewer companies competing for the best of the best, Fattmerchant can stand out, particularly with a corporate culture designed to maintain the cool startup vibe—casual dress, open work spaces, collaborative environment.

The low cost of living—and absence of personal income tax—can help seal the deal for young graduates, she adds. “If you’re a millennial, sure, you could move to San Francisco or New York or Chicago, but you’ll be living paycheck to paycheck. Here, you can earn a dollar and save a dollar.” The company can also live frugally, something its venture investors like. “One of the things we’ve been able to do really well is create shareholder value because we’re able to stretch our resources. Our dollar goes further here.” Land, labor and capital are all more affordable in Florida, and the relatively low state corporate tax rate of 5.5% makes it a more attractive home base.

Madhani said Fattmerchant’s headquarters will remain in Orlando, as she opens new locations around the U.S. with a recently secured $5.5 million round of venture funding. Growth is good, but like every successful disrupter that matures beyond its startup roots, Fattmerchant will have to stay vigilant to keep its advantage. “It’s all about not getting comfortable,” says Madhani. “If I’m sleeping peacefully every night, then I’m not a very good CEO.”