Payments Power Players
Georgia is a center for movie production and Atlanta is often called the Hollywood of the South, but another industry with deep roots in the Peach State brings in revenues that are just as impressive. Atlanta is the payments processing capital of the world. Over seventy percent of all payment transactions go through Georgia’s “Transaction Alley.” The industry employs approximately 30,000 people in the state and an additional 105,000 around the world are on the payroll of Georgia companies. What’s more, Georgia’s processors’ annual revenue exceeds $35 billion.
“We have some huge payment processors in Atlanta, and as they grew and splintered off, and as people left and engaged in startups, the technology just proliferated, I think at first by accident, but now it feeds on itself,” says Allen Maines, managing partner of law firm Holland & Knight, a firm known for its expertise in the payments industry and a sponsor of the American Transaction Processors Coalition (ATPC).
The foundation for Atlanta’s robust payments industry was laid in the 1950s. When credit cards showed up on the financial scene banks began outsourcing paper processing to the South, where the labor costs were cheap and the Federal Reserve was experimenting with wire transfer technology. At the same time, a pioneering bank in Columbus, Georgia—later called Synovus—adopted the use of credit cards with sales slips processed manually on carbon paper.
“Someone had the epiphany that we might be able to process all this paper on these new things called computers and that group of pioneers formed Data General, which is now Global Payments,” says H. West Richards, executive director of the ATPC. “Then it was the classic growth of an industry cluster that happens organically in cities across the United States. One big one starts and then two little ones come on board then companies form to service that one big company. Six decades later, you wake up and have a gigantic ecosystem.”
The payments ecosystem has been fueled by a skilled workforce coming out of Georgia Tech and the other 70 colleges and universities in the area. Plus, the 1996 Olympics strengthened Georgia’s fiber technology—Atlanta has the largest internet cluster of cables and wires, second only to Northern Virginia, home of the Pentagon.
“When we started switching to credit card transactions, you started to see the processors come here because they could find the bandwidth at a cost they could afford,” says Grant Wainscott, senior director of Technology Ecosystem Expansion at the Metro Atlanta Chamber. “You put all these things together and this is the bouillabaisse that has helped us really attract the industry.”
It’s more than just payments, however. Atlanta is a center for various sectors of financial technology—from credit and risk with Equifax to data and artificial intelligence (A.I.) with LexisNexis to the Intercontinental Exchange (ICE), which owns the New York Stock Exchange. With the third largest concentration of Fortune 500 companies in the country, Atlanta is also home to the fintech industry’s customers, Wainscott adds.
“Electronic payments is not an industry that requires delivery or transportation so Atlanta’s traffic is not an issue,” says Former U.S. Rep. Lynn Westmoreland who formed the Payments Technology Caucus while in Congress and whose district is home to credit card transaction processor T-Systems. “With the universities, talent, good climate, good workforce and infrastructure, it’s a combination of everything that fits together well for the industry.”
As the payments industry grew, local leaders saw a need for the sector to have representation within the state legislature and, in 2013, the ATPC was formed.
“We believed it was important to form a group that would be united to educate Washington D.C., especially with the changing legislative environment,” says Bruce Lowthers, co-chief operating officer of financial technology company FIS and chair of ATPC. “The transaction processing industry needed to have a voice of what processors are doing and make sure the government understood how transaction processors work.”
Armed with research showing the size and impact of the payments processing industry, ATPC founders educated Congress, hoping to convert politicians into supporters of the sector. The organization garnered support from Senator Johnny Isakson and Former U.S Representative Tom Price and coined Georgia’s fintech hub “Transaction Alley.” ATPC also launched a public relations campaign to raise the profile of the industry.
“Our idea was if the state understands how important this is they’ll go to bat for the industry when it needs help,” Richards says. “Something interesting happened, all of a sudden we fell into this economic development role, accidently.”
ATPC played a role in securing incentives for WorldPay, which prevented the payments processor from moving to Texas, and assisted InComm with the consolidation of its offices in Georgia. In 2016, Governor Deal and the Coalition also convinced Brazilian payment processing behemoth Cielo S.A. to move their North American footprint from Silicon Valley to Buckhead, investing $5 million in a new headquarters.
“The state and city have cooperated with our municipal finance people and we’ve found great incentives for companies willing to move here and provide great jobs for people,” Maines says. “All of that combined with the fact that Atlanta is a substantially more affordable place to live than Silicon Valley and frankly far easier to get around in than the peninsula south of San Francisco.”
Representing more than 70 Georgia-based companies in the financial service industry through lobbying and economic development, ATPC began working on building a partnership with another fintech hub—London—to further propel the industry forward. They did this by forming the P20, a transatlantic payments initiative, with an annual conference rotating between London and Atlanta.
“We thought this is a great way to bridge the two countries together and get impacts from global leaders in the payments industry,” says Richards, founder of P20. “The British have done a great job of streamlining their regulatory frameworks as it applies to, not just banking, but also payments as well. They have one payments regulator where the U.S. has 19 agencies that regulate our industry.”
Designed to be the “Davos of Payments,” P20 brings together the top 20 thought leaders in the payments industry with U.S. and U.K. legislators and regulators with the goal of creating universal rules and regulations in the payments industry. P20’s “Four Pillars” are focused on cybersecurity, regulation, financial inclusion and innovation.
“Just as New York and London have been the financial centers of the world, with the electronic payments industry, it makes sense for Atlanta and London to collaborate,” Maines says. “The U.S. and the U.K. generally establish the regulations and guidelines that are adopted and followed by other parts of the world.”
P20’s first conference took place in London in October 2017, where Jack Lew, former secretary of the treasury and chief of staff under President Obama gave the keynote address to nearly 150 attendees.
“As we left London and the inaugural P20 event last summer, it was amazing how we got all these people at the same table. There was and continues to be a common acknowledgement and now a common purpose, that if we come together we can drive action to the betterment for everyone,” Lowthers says.
October 9 through 10 the P20 conference comes to Atlanta, where payments industry leaders, regulators and government officials from across the globe will gather at The Atlanta History Center all aiming to make payments accessible, affordable and secure for all.
“P20 brings a very purposeful and strategic combination of the largest players in the payments ecosystem who know this day in and day out,” Wainscott says. “This is a unique opportunity to take the biggest leaders in the west—Atlanta which leads North America and London which leads Europe—and talk at a very high level actual strategy, actionable results and keeping the tenants of P20.”
