Via Forbes : Based on her love relationship with subscription services like Birchbox and Netflix, a 25-year-old Suneera Madhani had an idea that could save business owners millions of dollars. Her male bosses dissed her. Laughed in her face. That didn’t stop her. Just the opposite.
Denise Restauri: What did you see that made you say, “I need to fix this”?
Suneera Madhani: Most business owners, will agree that merchant services is a necessary evil when it comes to owning and operating their own business. Merchant service providers allow businesses to accept payment transactions such as credit and debit from their customers. When a customer swipes their card to pay for a good or service, the merchant services provider is responsible for moving that money from the customer’s bank account to the business’s bank account. Traditional merchant service providers charge hefty percentage markups on volume and a slew of ancillary fees.
For years, I was selling merchant services for one of the top acquiring banks in the nation. After standing by month after month and watching my merchants be kept in the dark and nickel and dimed at every possible turn, I grew frustrated by the total lack of transparency. My merchants had no understanding of what they were being charged or why their bills would change from month to month. I knew that there had to be a way to offer merchant services that wasn’t locking merchants into contracts that I believed continually took advantage of them.
Like most twentysomethings, I was obsessed with various subscription services. Birchbox, Netflix, Rent the Runway — you name it, I signed up for it. I realized that the transparent, simple, subscription model all these companies followed could easily be applied to merchant services. For a flat monthly subscription, merchants could receive access to the direct cost of processing with none of the markups, ancillary fees or contracts that every other provider thrived on.
I took the idea of subscription payment processing to my bosses at the time and to say they weren’t thrilled by it would be an understatement. They laughed in my face and questioned why they would ever use a model that could make them less money. They made it very clear that they wanted to milk the merchants. That’s when I knew it was time for a new model to enter the industry.
Restauri: What are you doing to fix it?
Madhani: I founded Fattmerchant. With Fattmerchant, we aim to bring transparency, fairness, and fun (believe it or not) to the merchant services industry. No matter what provider someone is with, I can guarantee you have never heard them say “I LOVE my merchant services provider.” But why not? We love our members and they love us.
Our members pay a flat monthly membership that gets them access to the direct cost of interchange, the percentages set by the credit card companies themselves that everyone has to pay. With their membership, merchants save an average of 40%, receive free processing tools, and our #BestDamnService. This model allows us to empower small- to medium-sized businesses and give them the same leverage as the bigger guys.
Not only do we make our members’ wallet’s “fatt,” but fatt stands for fast, affordable, transaction, technology. It has always been important to me that Fattmerchant offers more value than just price to our members. I knew I wanted to offer a powerful, easy to use payment tool to our members but had none of the technology experience to make it happen. Through our participation in a local accelerator program, we were able to put together an insanely brilliant in-house tech team that built out our very own Fattmerchant Payment Platform. Our payment platform offers service-based merchants a sexy, easy to understand way to manage and take payments with powerful analytics that help them manage their business.
Thanks to both our price and technology values, we are disrupting the merchant services industry, and merchants across the nation are taking notice. In 2015, we ran $110 million in transactional volume, a 2,000% increase from 2015. With this growth came the opportunity to expand. In April of 2015, we went in our first round of funding — our initial ask for our seed round was $500,000 and we ended up oversubscribed by $750,000. This gave us the opportunity to be picky with who we chose to invest in us and although we raised the cap to $850,000 we still didn’t not accept investments from everyone who was interested. This made some investors angry, but it allowed us to continue to have the maximum amount of control over our company.
Looking toward the future, we are planning on raising a Series A round this spring. This will allow us to continue to grow and scale the company until we reach as many small businesses as we can. The plan, as our mission says, is “payment world domination with the best damn service” and we are definitely on our way.
Denise Restauri is the author of Their Roaring Thirties: Brutally Honest Career Talk From Women Who Beat The Youth Trap now available for iBooks, Amazon, and Vook.