Startup Check-In

Modo: Interoperability Can Help eCommerce Merchants Work With Wallets

It’s not always easy to tell the difference between the meaning of integrations and interoperability: Integrations are systems connected in the same way, while systems that are interoperable work together, but remain different.

If Modo’s founder and CEO, Bruce Parker, sent you an email, for example, how the message was sent is not at the forefront of your mind.

“You don’t have to know ahead of time how I sent it,” Parker told in an interview. “I don’t have to know ahead of time how you received it. It just works.”

The same concept can be applied to payments. To that end, Modo is focusing on interoperability for online merchants who want to accept new forms of payment like wallets, but don’t want to have to change their acquiring bank, processors, or eCommerce and enterprise resource planning (ERP) systems in order to do so.

Merchants, however, already know how to take a credit card, and that presents an opportunity: What if a wallet or another payment method, such as a checking account, could look like a credit card — even if the data, in fact, relates to an email address and password? That’s what Modo seeks to accomplish.

The concept extends to those sorts of capabilities that come on credit card transactions but not automated clearing house (ACH) transactions. If merchants need to put funds on hold, for example, they can think of that transaction as a card authorization. Modo, in turn, performs the equivalent function on the wallet, which might not be defined by the same term. Overall, the merchant “thinks” that it is interacting with a card, when, in fact, Modo is working behind the scenes to translate or interoperate with the wallet.

The idea, however, is not to integrate, or connect two things in the same way, and that is important because the world is confronted with many new different types of payments coming onto the scene. As a result, it’s not quite clear what payment methods will be relevant in the future, making integrations difficult. But, by making payment systems interoperable, Modo can make two different payment systems work together, but remain different.

“Interoperability is about ‘how can I have two different things that stay different — they don’t become the same, they don’t talk the same, they don’t think the same, they don’t work the same — still play well, get along, and make beautiful payments music together,’” Parker said.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.