There are so many fees in credit card processing. Fattmerchant, which started almost a decade ago, set out to simplify things with the market’s first subscription, all you can eat, pricing for merchants. As the firm has matured, it’s grown into an integrated payment technology provider that continues to simplify the payment experience for SMBs by bringing various payment technologies together via API.
Now, Fattmerchant has introduced a partership with Finix on a new product called Flex which further empowers software firms to start processing payments immediately within their platforms.
Fattmerchant President Sal Rehmetullah joins on on the podcast to talk payments, the evolution of Fattmerchant, the new Flex product and where the payments market is headed in the future.
Subscribe: Apple Podcasts I SoundCloud I Spotify I Google Podcasts
The following excerpts were edited for clarity.
Beginning a career in payments
People in payments know that once you get in, you don’t have any idea how long you’ll be in the industry. I had zero ambition to be in payments or to talk about merchant services or payment technology. I worked at Deloitte in New York City, traveling the world for two years. I ended up at a San Francisco startup called Anaplan, helping lead and build a sales and customer success team.
Family-operated business
Fattmerchant is run by my sister and me. We are a family-owned and operated business, woman-led. She’s CEO and I’m President. We’re about two years apart in age, great friends and great siblings. She had this idea and I moved to Orlando.
We both have unique perspectives on the business. My background is very operational and sales focused. That’s where I spend a lot of my time. She’s definitely more creative and leads a lot of our marketing initiatives and our product vision. We complement each other very well.
Use cases
Fattmerchant began by empowering SMBs at the core. Payments has all these convoluted fees with lots of people with their hands in the pot. We couldn’t understand the big disparity in what SMBs paid for payment processing versus what the big conglomerates like Walmart and McDonald’s get charged. Fattmerchant became the first subscription-based technology company to provide unlimited payment processing for a single, flat subscription. Customers were saving 40 percent on the card processing.
Once we got into the space, we saw a lack of technology. We wanted to provide the SMB ecosystem with something that’s broader than the traditional point of sale. For businesses that did over $100,000 a year in credit card sales, we were a no-brainer. We started building tools for this SMB population. For a merchant to offer all different kinds of payment options, there are a lot of point solutions but nothing that brought them all together.
We launched Omni in late 2017/early 2018 that was the first card present/card not present API that connected back to Visa, Mastercard, American Express and Discover. We were ingesting all an SMB’s information and providing it with a single point to take payments. We can provide analytics and different integrations with tools.
Evolving SMB needs
The value proposition to SMBs in 2014 was that we can save them money. As consumer behavior changed since then, SMBs were being left behind because tools, resources and training is expensive. Omni is like a Mint.com for business. You get one view of your business and you can reach the customers that pushed you in this direction in a cost-effective way.
SMBs want to save money. But they also have to grow their sales.
New product launch
We do about $6 billion in payments on our platform. Partners were knocking on our door to see if they can use our Omni platform in their software. They wanted our risk and underwriting and dynamic funding. You need things like sponsor banks, underwriting team, and a full settlement engine to do that. We decided to package all of this in a single API.
We were having drinks at Money 2020 in 2018 with Finix to discuss a quick solution for software platforms to instantly turn into payment companies. We wanted to combine what Fattmerchant and Finix do best into a new product, Finix Flex. Software firms can do what they do best — sell software. Finix and Fattmerchant act as the backbone to help software firms become payment companies in 2020. We have been on this journey for about 18 months. 60 days after launch, we already have a few software firms on the platform.
Embedded finance
Financial services go beyond checking and savings accounts. Software companies own the eyeballs today. We have a great partner in Service Fusion that does an array of services for customers like HVAC and lawn care. They own the eyeballs of their customers. Why would we want them to leave that platform into a different product to go get merchant services information or payment information?
We see the trend that software companies will be at the forefront of financial services, but it won’t feel like financial services. When you think about the best transactions you have, like Uber and Lyft. They’re technically taking a payment each time you ride and you don’t even know you paid $8 or $9 on a transaction. It’s so seamless — that’s the same thing you’ll start to feel with any type of business you interact with.