As fintechs in big cities shed jobs, VizyPay is looking to lure talent to less dense locales.
"Our focus is not Dallas or San Francisco or Chicago. It's rural America," said Austin MacNab, CEO and founder of the Iowa-based VizyPay, which focuses on selling payment technology to small businesses outside of metropolitan areas. VizyPay has hired 41 people since 2023 started, bringing its total to 128. It plans on employing about 175 by the end of 2023.
That expansion makes VizyPay an anomaly, as banks, fintechs and other technology companies
"Since we focus on rural areas, our growth has been relatively slower, so we haven't had some of the overstaffing problems that other fintechs have had," said MacNab. "And since a lot of the bigger cities have been hit by tech layoffs, that's where we're looking."
In the fintech industry, the focus on maximizing user growth during the pandemic led to over-hiring, often expanding staff in a manner that required even more hiring that wasn't necessarily tied to growth, according to Erik Poch, managing director of Ria Digital for Ria Money Transfer, a cross-border payment and fintech firm.
"When the focus isn't on making money but on just getting users, there's often a lot of hiring in one area of the business, such as coding," Poch said, adding that can create low productivity if there aren't enough new products that require new code, leaving many of the programmers idle. The answer to that problem for many firms in 2020 and 2021 was to hire more product development people, or vice versa, leaving two departments overstaffed, Poch said.
"As the economy tightened, investors weren't emphasizing user growth as much," Poch said. "But you had these unicorns out there with a lot of staff that only knew how to acquire users."
Ria launched its digital division in 2012 with eight people, and has since grown to 350. It has added an average of 50 people each year and plans to maintain the pace. Its current projects include building its "banking as a service" capabilities, which allows it to offer financial services to third parties via an application programming interface or the cloud. That will enable Ria to compete in embedded finance and open banking, innovations that enable payment companies to offer added services from third parties via the payment relationship.
"Banking as a service is a hot trendy topic, so that's changed our talent needs," Poch said.
One change in recruitment is to make job searches more granular, or more specific to lean into trends, Poch said, giving the ramping up of in-store payment technology to accommodate shoppers returning to stores, as an example. With a larger pool of available workers, there's more of a chance Ria can find someone who can step into a role with minimal training. "For example, on our payments team, we may look for a card present vs. card not present expert," Poch said. "Or someone who understands a specific market,"
In the current environment, marked by layoffs and economic uncertainty, leverage is shifting toward employers, said Marco Salazar, director of technology and infrastructure for Javelin Strategy & Research. "This should seemingly level the playing field for all payments firms that were once struggling to compete with big technology companies and large fintechs."
The need for firms to focus on initiatives that generate revenue in the short term also affects demand for certain skills, Salazar said.
"Raising capital in this climate is much harder and the companies that can prove their ability to generate revenue will be preferred," Salazar said. "As such, investment in long term bets that do not have a clear path to revenue will be scaled back."
Some larger payment companies, such as the card networks, are also adding staff. Adyen, for example, added 757 people in the second half of 2022, bringing its headcount to 3,332. It plans to expand by about the same amount in 2023. Adyen's competitors in payment processing include firms that have downsized, like
"We're not being led by short-term changes in the market," said Davi Strazza, president of North America for Adyen, which is based in Amsterdam. "We're being long-term oriented."
Twenty-seven percent of Adyen's revenue comes from North America, a share of Adyen's total business that is increasing quickly, Strazzi said. The Dutch firm recently opened a technology development center in Chicago.
In addition to expanding in North America, Adyen is also ramping up a white-label
"These tech hubs are essential," Razza said, adding Adyen also recently opened a technology hub in Madrid. "North America is a big market for us, and we're investing there."
As Adyen adds staff, it is considering the types of workers other firms have laid off, and is looking for people with experience in fintech and in leading teams.
"Given the changes in the market, there is an opportunity to hire senior people," Strazza said. It is also adding junior staff.
Part of Adyen's training for new senior hires focuses on recognizing staffing needs in specific areas of the business, and training leaders how to right-size teams to avoid the type of unbalanced staffing that Ria's Poch referenced. "If you are disciplined in where and how you grow your teams, it increases your chance to avoid over hiring," Razza said.
