How FinTech Firms Evolve To Help Merchants With Payments


Product debuts from FinTech firms sometimes come out of an evolution: Modo has been facilitating interoperability for banks for a few years. As part of those efforts, the company has worked with large FinTechs or banks to help connect their secure technology to the marketplace of payment methods. And, while the company still works with banks, Modo recently unveiled a new product dubbed /Checkout that is geared toward eCommerce merchants.

Modo Chief Revenue Officer Brian Billingsley told PYMNTS in an interview that the company wanted to “continue that story” into a marketplace that could augment its focus on banks well. The FinTech firm seeks to provide merchants with the availability of multiple payment service providers, networks, and payment methods through a single connection to the /Checkout application programming interface (API) that also comes with a dashboard to provide a view of a transaction’s lifecycle.

The solution comes as Billingsley said merchants go through a typical optimization as they start to scale, starting with a website along with an API to accept cards. The merchant then might get an email from an acquirer saying that it can receive their payments less expensively if they use that service. But it may occur to them that it could take time to integrate such an offering. (And merchants that are selling in different places such as Europe might need to accept more payment options than just cards.) At the same time, merchants might have competing priorities in different markets as they grow and scale; they might want to optimize for cost per transaction or acceptance.

Merchants might want to accept as many payments as possible in a new market, while it might be important to shave 10 or 20 basis points of cost off here and there in a market that they have already been in for a while. Merchants, in turn, can either go to some providers that say they will get them most of those connections, and they have to pay for that, or they can decide to optimize the cost and do the work on their own. In the latter case, merchants have to build and maintain all of those connections. And the problem with that approach is that more connections could bring more back-end operational inefficiencies.

Modo, however, seeks to “let merchants have their cake and eat it too, so to speak,” according to Billingsley. The company seeks to take away the technical part of adding new payment methods, new acquirers and new processors while still letting merchants have the financial as well as the business benefits of going through the process themselves. At the same time, Modo seeks to differentiate itself from other firms by serving as a neutral third party that doesn’t hold, touch or move money as it introduces new technology solutions to the market for merchants.