Of all the many technology innovations in the last few years, the truly unparalleled innovation is interoperability. When companies with their disparate systems and platforms can communicate and share their data the multiplier effect on new technologies and benefits is tremendous. Or, as Bruce Parker, founder and CEO of Modo, puts it: “We’re on a rocket curve of new technologies that would not have happened without interoperability.”
Modo securely and fairly conducts the exchange of payment event data across the platforms of banks, networks, payments processors, and their partners. Its contribution to the interoperability effort is its technology, known as COIN, which is designed to power digital payments from any two sources without either party having to modify their payments system. No need to throw out the old technology to make way for the new.
“What makes Modo cool is that it’s a great combination of being able to pull data from anywhere, and take that data anywhere, and then keep track of where the data was the entire time,” says Thad Peterson, a senior analyst at Aite Group. “Keeping track of the data is key because there’s no risk of losing the information.”
Given the broad potential uses of interoperability, Modo has gotten traction with a range of players with different needs. One is Bank of America, whose clients will use the payments hub to connect to multiple emerging payment networks to reach new populations around the globe, as well as to explore additional innovations to extend the reach of its business-to-consumer disbursement product. Another Modo client is Klarna, a large online payments company in Sweden, that is using COINs to speed up implementation of Klarna’s checkout solution for its worldwide e-retail partners.
Meanwhile, payments and e-commerce company Verifone and financial services processor FIS are in partnership with Modo to enable customers to pay with loyalty points linked to their credit or debit cards at the point-of-sale for any merchandise at that location. Any merchant using specific Verifone payment terminals will allow customers to pay for any merchandise they want using loyalty points they’ve accrued on their credit card. There are 3,100 banks in the FIS network reaching 8.5 million customers.
This interoperability works across disparate systems because Modo has successfully defined all the components of six different types of payment events (and it
is currently working on defining several other payment events). It’s found that across industries and platforms the basic elements of a specific type of payment event—what happens before, during and after a payment—are actually almost exactly the same across companies and systems.
No matter what the event, people have to prepare to pay for an item, pay for it, and then follow up after a payment. This data is currently owned and managed by different entities, but it is all related to the same payment event. And that event data al- ways includes accounting entries, transaction states, credentials and identities, and other commercial documents, such as receipts.
Modo currently focuses on three types of pay- ment events:
Payout Events - Enable your customers to send money globally using the ever growing number of digital wallets
Loyalty Events - Combine multiple rewards and loy- alty programs at point of sale to make a purchase
Checkout Events - Join multiple payment methods (cards, ewallets, transactional lending) and funding sources (loyalty points, gift cards, vouchers) to enable purchases at any merchant
“Different companies talk about different payment pathways, but they actually all have the same requirements, and this powers interoperability. It allows companies to share data to do something new, and to share data about something old,” says Matthew Leavenworth, Chief Product Officer at Modo. “But people are so convinced their systems are unique that there’s a false sense of complexity.” The bottom line, he says, is while these are different companies, in different industries, with different
use cases, they are all working on the same Modo solution.
Peterson of Aite adds: “There will always be some challenges associated with interoperability, but Modo is set up to minimize those challenges. They have gotten further than anyone on cracking the code of interoperability.”