Sean Harper and Josh Krall
In 2008, Sean Harper, 30, and Josh Krall, 32, grew frustrated shopping for credit-card processing while running their own businesses because they found it hard to compare rates and services. At the time, Harper was selling satellite radio gear online and Krall operated a custom-electronics maker. "There's like, 900 of these companies selling credit-card processing under their own name," says Harper, although most are intermediaries to the handful of companies that actually handle transactions. Merchant processing typically comes with a byzantine contract loaded with fees, he says. The two, who were then getting MBAs at the University of Chicago, launched FeeFighters in April 2009 to make the market for merchant processing more transparent and easier to navigate. "We're disintermediating the people who sell this stuff door to door," Harper says. Merchants tell the site how much credit-card volume they process, as well as the average transaction size. Processors bid for their business based on that information. Processors that list on FeeFighters must agree to drop many charges, such as the cancellation fees common in processing contracts. FeeFighters gets a fee, typically a few hundred dollars, from the processor when a merchant signs up. The Chicago company, with a team of six, has raised almost $2 million in venture capital. Harper says FeeFighters has a few hundred transactions each month and projects that revenue will grow from $200,000 in 2010 to $1 million this year. He says FeeFighters plans to expand eventually to other financial services for businesses, such as insurance and payroll services, and may hire as many as eight additional employees in 2011.
—John Tozzi (posted on Feb. 4, 2011)