Payments remains one of the most fragmented online services, a situation that only gets worse when your company does business internationally. A British startup called Paytrix says it has raised $18.3 million in funding to develop a solution to solve this: a single platform — and a single contract — that allows its customers to manage all different payment options, from payment acceptance to payouts, in one place to manage.
The funding is a Series A and is co-led by Unusual Ventures, Motive Partners and Bain Capital Ventures. Bain was also part of Paytrix’s previous round of £5.2 million in May 2022 with Fin Capital, Better Tomorrow Ventures, Hambro Perks, ClockTower Ventures, The Fintech Fund, D4 Ventures and several individuals, all also participating in this round . The company does not disclose its value.
Aaron Brown (DIRECTOR), Ed Addario (CTO), and Edward Harrison (CPO) co-founded Paytrix with a combined decades of experience at a range of well-known payments, FX and other fintech companies, which is perhaps the key to why it has been able to raise this money now, in the most bearish of venture- markets in years, and during a much tighter market in e-commerce in general. The service isn’t fully licensed yet – there are plans for both a UK and Europe EMI.
Brown said Paytrix has a payment institution license in the UK that has already been approved by the FCA, “which is being upgraded to an EMI…in addition to a separate application for an EMI in Ireland with the CBI.” Both were filed last year and “are making good progress” with a team to back that up, including the former head of authorizations at the CBI as chairman, and Square International’s former chief compliance officer.
Paytrix describes itself as a platform for managing payments, and behind an API it offers its customers to integrate into their own services, Brown tells me it negotiates its own banking relationships in different countries which allows it 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 Brown describes it, Paytrix integrates directly with local payment schemes through first-tier banks or locally integrated payment partners. Some of these are made public – uses Modulr Financial in the UK – and some Brown says in the EU and APAC “we are contractually restricted from naming them.” Because Paytrix is non-acquisition, he said, merchants continue to work with their card acquirers like Stripe or whatever service is used, and Paytrix provides local accounts, real-time FX and instant settlement “to the merchants and downstream beneficiaries.” take care of payments.
Payouts are what the company is focusing on right now: it currently processes them in 133 currencies and 200+ countries, including real-time FX.
He says this arrangement reduces the number of third parties sellers or marketplaces typically have to work with, relationships that typically involve not only costs, but complexities and questions with buyers being transferred to third parties to make payments.
What Paytrix doesn’t handle yet is inbound payments, so it will work with all the acquirers its customers already use – be it open banking or another provider, and that will be “Phase 2” for the company, Brown said: “Global enable direct debits that allow merchants to collect money in each of the markets they operate in without the burden of identifying, sourcing and contracting with the local banks, or waiting until they have enough volume to work with a front-line bank. followed by other payment options such as direct to card and virtual card issuance.
Whether this will all work as advertised, of course, remains to be seen.
Paytrix “does have some customers,” Brown said, but it’s not allowed to disclose most of them. One of them is Fyorin, a business banking platform that offers various financial services to businesses. Others include a European ticket marketplace, a global “employee of record” platform (for managing and working with employees in international markets), and a payment gateway in Europe.
More broadly, Brown said the company is targeting not just e-commerce companies, but others that need to make and manage (collect and execute) payments across multiple countries, such as payroll providers. The e-commerce opportunity is an interesting one: It’s not the top end of players like Amazon – which will build and operate its own services – that it’s targeting, but hundreds of online retailers and marketplaces that have more than $1 million in annual revenue, but not necessarily the resources to manage multiple supplier relationships, not at an operational or technical level. Typically, Paytrix said its customers manage between 10 and 15 payment providers on average, so the pitch is that this can now be reduced to one.
But given the ongoing issues in the market and the team’s track record and experience here, it’s a bet that investors say is a strong bet.
“Paytrix addresses a critical need of companies operating in an international marketplace,” Matt Harris, 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 Paytrix’s solution addresses these challenges nicely. We believe there is a global need for this kind of payment infrastructure and we are excited to continue our support of Paytrix as they expand their solution to businesses around the world.”