At 16, Dan Price’s high school rock band, the Straightforwords, broke up. At 26, he was on a stage in Washington, DC, shaking hands with President Barack Obama, who had just announced Price as the winner of the National Small Business Administration Young Entrepreneur of the Year Award for his company, Gravity Payments. Unrelated events? Not exactly.
After the Straightforwords broke up, Price kept up with his record store and coffee shop friends who had ties to the music industry. This small business crowd complained about the credit-card processing fees that made it hard for the little guys to compete. Having spent some time in the industry, Price vowed to level the playing field. In 2004, 19-year-old Price and his brother Lucas started a company called Gravity Payments.
Today, Gravity Payments handles over 10,000 clients, including about 30% of all small to medium-sized companies in Seattle. Their formula is simple. In a world where big banks often tack on whopping fees to the credit card transactions of smaller customers, Gravity charges about one-half to two-thirds less, with a fee structure that is refreshingly transparent. Add world-class customer service and it’s understandable why Gravity is processing more than $4 billion annually for clients in all 50 states, with revenue just under $100 million.
John Platt, owner of St. Clouds Restaurant and Catering, a Madrona neighborhood mainstay in Seattle, notes, “I don’t need a lot from a credit card company other than access to our money, and Gravity does that well. Even though the company has grown, if I have a problem and call him, Dan always gets back to me within 24 hours.”
As a student at Seattle Pacific University, Price won second place in the 2007 UW Business Plan Competition for Gravity Payments. “We were already in business at that time,” Price said, “but entering the competition gave me the opportunity to step back and get perspective on where we were going. The event strengthened my confidence and Gravity’s visibility. Investors were knocking on our door, but ultimately we declined their offers.”
Meeting President Obama in 2010 also served as a springboard into making a political difference, one that would help small businesses and Gravity. The Dodd–Frank Wall Street Reform and Consumer Protection Act was up for vote in Congress. The Durbin Amendment included a provision aimed at regulating debit card fees and increasing competition in payment processing. Major banks “threw everything they could” at repealing the effort. Price contacted Senator Patty Murray, a member of the Senate Appropriations Committee, and the senator’s office told him that his letter played a key part in passage of the amendment.
It’s hard to hold Gravity down