Many fintech startups are working to streamline various aspects of payment acceptance for global online merchants, and Modo wants to give those merchants more control over the payment service processors they use.
On Monday, Dallas-based Modo launched /Checkout, its newest service leveraging its Coin platform, enabling merchants to pick and choose which payment service providers to use in various global regions.
“Through a single connection, Modo provides a path to dozens of payment service providers and the flexibility to switch between them, so merchants don’t have to do that work of direct negotiation and integration with processors,” said Ryan Lee, Modo’s chief product officer, in an interview.
The service marks a major leap forward for Modo, which launched in 2010 aiming to remove pain points around merchant payments with its
In late 2017 Modo hired
“What drew me to Modo was the opportunity to take this bank-grade technology we’ve developed that financial institutions are using to streamline payments and sell services to the merchant side of the business,” Lee said.
/Checkout operates as a secure hub enabling merchants to choose which payment providers they want in various markets to optimize transaction speed, cost and risk, and switch between them as needed, according to Lee.
Modo isn’t an acquirer and doesn’t capture or move funds. The company acts like a marketplace of payment service providers, and its dashboard enables merchants to compare the performance and cost of different providers, Lee said.
One advantage /Checkout touts is cutting the time needed for online merchants to set up with a local processor when expanding to new international markets.
“Typically it could take a U.S. merchant expanding to Canada or Europe up to nine months to set up a relationship with a new payment service provider, but Modo can make that happen in about a month,” Lee said.
It’s not unusual for large online merchants to each have about 10 different payment partnerships to cover all global regions, because typically no single provider has big enough geographic reach, Lee said.
Merchants also struggle to determine the true per-transaction costs of using one payment service provider versus another, and /Checkout can help with that, according to Lee. /Checkout gives merchants a dashboard view of the full lifecycle of a transaction from initiation through settlement and reconciliation, including any errors or chargebacks.
Merchants also may use /Checkout to change payment service providers on the fly, in case their core provider runs into technical issues, outages and peak-capacity roadblocks, according to Lee.
“Many e-commerce companies are betting their entire business on one payment provider, which is trouble if there’s a problem. Modo with /Checkout can provide merchants with a hot failover option and instantly route them to another provider,” Lee said.
Modo’s /Checkout service connects via API to dozens of payment service providers, and Modo provides a token vault to protect against data breaches—though merchants have the option to use their own token vault, Lee said.
Pricing for /Checkout is based on a single fee per merchant connection. Modo initially is targeting midsize to large U.S. companies in the Fortune 400 initially, up to merchants with $1 billion in revenue, Lee said.
14 West, Karna, FIS, Bank of America Merrill Lynch, Deutsche Bank and Etihad Airways are among Modo’s clients.
