Payments remains one of the most fragmented services online, a situation that only gets worse when your business trades internationally. A UK startup called paytrix says it has raised $18.3 million in funding to develop a solution to fix this: a single platform, and a single contract, that allows its customers to manage all the different payment options, from payment acceptance to payouts, In one single place.
The financing is a Series A and is co-led by Unusual Ventures, Motive Partners and Bain Capital Ventures. Bain had also been part of the previous £5.2m Paytrix round in May 2022 with Fin Capital, Better Tomorrow Ventures, Hambro Perks, ClockTower Ventures, The Fintech Fund, D4 Ventures and various others, all of whom are also participating. in this round. . The company is not disclosing its valuation.
brown aran (CEO), ed addario (CTO), and edward harrison (CPO) co-founded Paytrix with decades of collective experience in a variety of well-known payments, FX and other fintech companies, and that could be the key to why he has been able to raise this money right now, in the most bearish of markets. of risk in years, and during a much tighter market in e-commerce in general. The service is not yet fully licensed; there are plans for an EMI for the UK and Europe.
Brown said Paytrix has a UK payment institution license already approved by the FCA, “which is being upgraded to EMI… along with a separate application for an EMI in Ireland with the CBI.” Both were requested last year and “are progressing well” with a team to support that, including CBI’s former Head of Authorizations as its Chairman, and Square International’s former Chief Compliance Officer.
Paytrix describes itself as a “payment curation” platform, and behind an API it provides its clients to integrate into their own services, Brown tells me he negotiates his own banking relationships in different countries that allow him to bypass the traditional payment rails used. for card payments and other payment services such as Stripe, as well as some of the newer channels that have emerged in recent years, such as open banking standards.
As described by Brown, Paytrix integrates directly into local payment schemes through Tier 1 banks or locally integrated payment partners. Some of these are disclosed (he uses Modulr Financial in the UK) and some Brown says in the EU and APAC “we have contractual restrictions on naming them”. Because Paytrix is acquirer agnostic, he said, merchants continue to work with their card acquirers, such as Stripe or whatever service is used, and Paytrix provides local accounts, real-time FX, and instant settlement “to sellers and downstream payees” for take care of payments.
Payments is what the company is focused on now: it currently processes payments in 133 currencies and over 200 countries, including real-time FX.
He says this arrangement reduces the number of third parties that merchants or marketplaces typically have to work with, relationships that often present not only costs but also complexity and questions with buyers that are passed on to third parties to make payments.
What Paytrix doesn’t handle yet is inbound payments, so it works with whatever acquirer its customers already use, whether it’s open banking or another provider, and that will be “Phase 2” for the company, Brown said. : “Enabling global collections which will allow merchants to raise funds in each of the markets in which they operate without the burden of identifying, obtaining and contracting with local banks, or waiting to have enough volume to work with a first bank This will be followed by other payment options, such as direct issuance to the card and the virtual card.”
Whether this will all work as advertised is of course still to come.
Paytrix “has a number of clients,” Brown said, but is not allowed to disclose most of them. One is Fyorin, which is a business banking platform that provides various financial services to businesses. Others include a European ticketing marketplace, a global “clerk of record” platform (for managing and working with clerks in international markets), and a payment gateway in Europe.
More generally, Brown said the company targets not only e-commerce businesses, but also others that need to make and manage payments (receive and make payments) in multiple countries, such as payroll providers. The eCommerce opportunity is an interesting one: It’s not the top tier of players like Amazon, which will build and run its own services, that you’re targeting, but hundreds of online retailers and marketplaces that have over $1 million in annual revenue. but not necessarily the resources to manage relationships with multiple vendors, not at an operational or technical level. Typically, Paytrix said its clients run between 10 and 15 payment providers on average, so the argument is that it can now be reduced to one.
But given the persistent problems in the market, and the background and experience of the team here, it’s a bet investors think is a strong one to make.
“Paytrix is addressing a critical need for companies operating in an international marketplace,” Matt Harris, a partner at Bain Capital Ventures, said in a statement. “The complexity and cost of cross-border payments has long been a major pain point for businesses looking to scale, and the Paytrix solution addresses these challenges in an orderly fashion. We believe there is a global need for this type of payments infrastructure and we are excited to continue our support of Paytrix as they expand their solution to businesses around the world.”
