VizyPay CEO Austin Mac Nab says he’s taking on the “dinosaurs.”
By that, the head of the Waukee, Iowa-based company is referring to the payments company behemoths that have been in the industry for decades. Mac Nab wouldn’t name them, but said his payment processing company’s culture, transparency and focus on small business owners set it apart in the broader payments landscape.
At 37, Mac Nab is also probably a lot younger than many of the CEOs who run those larger rivals. He cofounded the company just five years ago in 2017. In keeping with his more youthful approach, Mac Nab recently posted about the company's anniversary bar crawl on his LinkedIn profile.
VizyPay, an independent sales organization in the payments sphere, also distinguishes itself by focusing squarely on selling to merchants in small towns and rural areas. Despite working with smaller operators, Mac Nab said the potential pool is vast.
“There’s just millions of them — it’s not like we’re fighting for 500," Mac Nab said. "We’re fighting for a lot of small businesses, a lot of small areas throughout the United States that are not touched as much as bigger cities." That market will “be a big play for us for a long time,” he said.
It's already paying off. VizyPay has processed about $2 billion in payments since its inception, and the company projects that figure will surpass $4 billion by the end of this year. To handle the business, he's hired 100 employees and about 760 independent contractors.
“We’ve done this in Iowa, of all places," Mac Nab said. "We didn’t have to move to a big Silicon Valley or a tech hub."
Still, he's had a taste of California. Mac Nab is originally from southern California, but ended up working in Ames, Iowa at electronics retailer Best Buy and met his wife Malisa there while she attended Iowa State University. They moved back to California for a couple years when he was working for Central Payment in San Rafael, California, before returning to Iowa in 2008 to raise their family.
After spending about a decade working for Central Payment as executive sales director, Mac Nab said he observed small business owners “being forced to use payments technology that wasn’t well-suited to them or their business” and he felt the industry was ripe for disruption. His former employer Central Payment is now a unit of TSYS, which is itself part of the larger processor Global Payments as of 2019.
So, Mac Nab joined with Frank Pagano and a third partner (who a spokesperson for the company declined to identify) to invest $197,000 in the formation of VizyPay in 2017. Since then, the company has amassed about 12,000 customers, with small business owner clients in all 50 states, he said.
Catering to small businesses
The owner of an auto repair shop in tiny Deer River, Iowa, that’s been in business for decades “isn’t looking for the best, next technology,” Mac Nab contends. That business owner wants payment processing that’s cost-effective and meets needs as the customer base grows and evolves, he said.
Those merchants also want payment technology “that is not so robust and so confusing to use that you don’t use half the features, but you’re paying for them,” Mac Nab said. Payments companies like Toast or Block's Square “have great, robust technology, but they’re probably meant for downtown Chicago,” he said.
VizyPay, which has an all-in-one payment processing app, equips business owners with a smart terminal and offers a subscription model with three tiers of pricing based on payments processing volume. The company also makes money on processing fees. Mac Nab said VizyPay tries to set itself apart from large payments companies that pile on rate increases or have expensive leasing agreements.
Auto repair shops, restaurants and professional services firms, in areas like HVAC and plumbing, are the types of businesses that apply for new merchant accounts with VizyPay most frequently. The company's average monthly processing volume is now $25,000 per account, Mac Nab said.
Patricia Kellogg, owner of Patty Cakes Restaurant and Bakery in Buckley, Michigan, said she began using VizyPay for card processing late last year. “It does what it’s supposed to do and it’s not charging me an arm and a leg,” said Kellogg, who’s been in business for two decades.
Joanne Taylor, owner of Southern Iowa Saddle Shop in Osceola, Iowa, estimates transactions at her business are “probably 50-50” when it comes to card versus non-card payments like cash. Taylor, who’s been in business 31 years, said VizyPay’s payment processing is more efficient and better-priced than others she’s used, and she appreciates being able to talk to people when she has questions.
Cliff Gray, a senior associate with industry consulting firm The Strawhecker Group, said focusing on simple technology for small businesses is “a spot-on strategy.” Square and big processor Fiserv's Clover have great functionality, “but for most basic, little bodega stores, small mom-and-pop retail, it’s way overkill,” Gray said.
VizyPay also knows how to talk to business owners, Gray added. “Vernacular matters, when you talk to the merchant,” he said.
About 95% of VizyPay's employees are from outside the payments industry, Mac Nab said. Also, more than half are minorities and 30% are women. “You can’t disrupt the industry if you hire the same people that have been running it for two decades,” he said.
Investing in growth
In VizyPay’s first year, revenue was $97,000, Mac Nab said. Five years later, it’s on pace to reach $22 million this year. The company wasn’t profitable in 2021, the CEO said. “Every dollar we have, we’re putting back into growth,” he explained.
The company has dedicated $1.5 million this year to extending its account manager division into eight states and 30 cities, and bolstering internal support, recruiting and technology, Mac Nab said.
VizyPay has captured the attention of small merchants as well as others in the payments industry, said Rod Katzfey, president of the not-for-profit MidWest Acquirers Association.
Katzfey lauded VizyPay’s focus on small- and medium-sized businesses in rural towns, both in terms of "hiring agents in these small towns that are part of the communities," but also with respect to servicing the needs of small town "merchants that need to accept credit/debit cards for purchases,” as more consumers move away from cash and check, he said via email.
Mac Nab said VizyPay aims to “differentiate ourselves from the big dogs that are out there” with short customer service wait times and a physical presence, showing up to help small business owners set up new terminals and troubleshoot issues.
When it comes to payment processing technology, business owners want efficiency at a reasonable cost and don't want to "read an encyclopedia on how to use it,” Mac Nab said. “That’s what we’re trying to accomplish for them."