San Francisco has Square, Stripe and Plaid. But Atlanta has CoreCard, Kabbage and CheckFree. It also lays claim to pioneering charge cards, electronic payments and ATMs. Many of the everyday innovations in fintech we’ve come to rely on have the Atlanta metropolitan area to thank.
Yet Atlanta hasn’t gotten its share of the fintech buzz, perhaps because its founders are less prone to tweetstorming and its products don’t have developers rhapsodizing about APIs. Atlanta’s fintech scene has developed around a stabler, more cautious ethos: less move fast and break things, more stay safe and build things. At a time when fintech valuations have fallen sharply from their lofty peaks and regulators are circling, that may make Atlanta a more favorable place to place fintech bets, whether that means founding a company, investing or hiring local talent.
Georgia’s fintech industry, mostly centered in and around Atlanta, had 210 companies employing over 42,000 workers in 2021, according to the Technology Association of Georgia. Mostly centered on the problems of traditional finance, it was built by practical-minded innovators who have built tech solutions in response to real-world problems, often in lockstep with regulators. Many of the region’s innovations precede the dot-com boom, and the leading companies don’t seem to buy into the hype of passing trends — though Buckhead, Georgia, is getting a cryptocurrency storefront, for what that’s worth.
“We didn’t just stick a stake in the ground yesterday and say that we are going to lead in fintech,” said Larry Williams, president of TAG. “We have built every iteration of the evolution of fintech, since the beginning, since before ‘fintech’ was even a name.”
The local industry continues to grow, too: In 2021, the region’s publicly traded companies had combined revenue of $49 billion, up 32.4% from 2020, according to TAG. This makes Atlanta an underrated hotbed for hiring fintech talent, investing in new businesses and fixing the financial system’s inefficiencies.
A promised land for payments
More than any other area in fintech, Atlanta is known for innovation in payments. That’s because, before payments went fully electronic, New York banks sent their carbon-paper slips for processing to Atlanta as it was less expensive.
The Federal Reserve Bank of Atlanta played a major role. Atlanta became a testing ground for using ACH to process a huge volume of Social Security payments for retirees in Florida and Air Force personnel’s salaries. In part because of that pilot project’s legacy, Atlanta’s Transaction Alley, a string of businesses along Interstate 85, processes about 70% of payment transactions in the U.S. to this day.
“Payments grew up in Atlanta,” said Kathryn Petralia, who co-founded Kabbage and now runs fintech startup Keep in the city.
Atlanta’s fintech talent base is focused as a result. Startups focused on trading or investing might find better luck elsewhere, she said: “For trading or financial markets, it’s New York.”
The region has also long been a banking hub, and many of the innovations fine-tuned in the Atlanta area answered to clear problems bankers faced: charge cards, ATMs and banking-infrastructure software, for example. TSYS started as a product of Columbus Bank and Trust, with just three engineers creating the original software that would make it one of the biggest payments companies in the world. Other payments companies with major Atlanta ties, like Fiserv and Global Payments, followed in their footsteps.
The public university system’s talent is relatively untapped compared to the heavily recruited Berkeley and Stanford campuses. Georgia Tech, Georgia State and Kennesaw State University all have programs designed to cultivate engineering and business talent, while HBCUs, collectively known as the Atlanta University Center Consortium, have specialized finance programs.
“It’s crucial for any hub to have a university system behind it — it’s our research engine and where we build thought leadership,” said Eloisa Klementich, president and CEO of Invest Atlanta, the city's economic development authority.
Tech innovations in the past two decades expanded the industry. The 1996 Olympics massively updated the city’s network infrastructure and provided a testing ground for stored-payment cards. Along with the dot-com boom came an increased interest in online payments for ecommerce.
And as the internet increasingly became a part of Americans’ everyday lives in the early 2000s, entrepreneurs started founding fintech companies in Atlanta focused on other areas of finance like lending, customer-rewards programs and private-label credit cards. The most successful new fintechs helped banks in their pursuit of “getting rid of cash and getting rid of checks,” said Don Campbell, principal of the high tech management consulting firm RightCourse.
If there’s a downside to Atlanta, it might be that friendliness to traditional finance. Several observers noted local startups’ openness to corporate VC investments from financial firms as well as acquisition overtures. The IPO versus M&A debate might be tilted a bit more to the less ambitious route of selling the company. If you’re looking for runaway growth and a unicorn valuation, Atlanta might not be the place.
“It’s a lot of people who think about profitability early on,” said Nico Simko, an Argentinian fintech founder who considered several U.S. locations but ultimately chose New York City as the launchpad for his startup, Clair. In New York, he said, companies “scale more quickly, are more VC-backed and take a little bit longer to reach profitability.” He added that Atlanta companies are more likely to ask, “Where are the gaps in infrastructure?”
It may not host a rebellious crypto scene like those in New York or Miami, or the deliberate disruptors of San Francisco, but Atlanta has its upside. Companies there seem to prefer to build off one another's achievements. Many local entrepreneurs think that affords them an opportunity to create fintech businesses that feel sustainable.
“You can build all of these flashy, end-game fintechs in different parts of the country,” said Rob Frohwein, who co-founded Kabbage and Keep with Petralia. “But when you pull back the covers, it’s the Atlanta fintechs that built what’s underneath.”
Update: This story was updated on June 7, 2022, to clarify that Invest Atlanta is an economic development authority.