What it looks like to start a payments platform from scratch

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The concept of a digital payments platform that taps into consumer bank accounts is an old one. But there are still opportunities to implement it in new ways.

Intrapay asked for a lot of merchant feedback before launching its platform, which includes a white-label solution that allows the consumer to make payments through direct bank account transfers in real time. As such, it carries a concept similar to PayPal ACH payments, but with a focus on enabling developers to build on top of it while supporting standard payment methods for e-commerce.

"We started from scratch, with no legacy system, so we are quite flexible in what we allow onto our platform," said Intrapay CEO Koen Vanpraet, a former Credorax and GlobalCollect/Ingenico executive. "We are not looking at this as another traditional pipeline-driven business. We look at this as a new ecosystem and we want to capture all of the players and contributors to connect to this platform."

The open platform concept is gaining steam, even with the major card networks, but Vanpraet contends that for many companies the notion of an open platform is not truly embraced with an accompanying mindset.

"In today's world, very few companies have an open attitude," Vanpraet said. "But we would argue that the change in the payments landscape is going to force more open platforms and force companies to work together."

Even though Intrapay is entering a crowded field serving e-commerce merchants that would seem to have no place for more startups, there is plenty of room for innovative independent payment gateways, said Gil Luria, director of research for equity capital markets at D.A. Davidson & Co.

Luria points to several acquisitions — Visa obtaining Cybersource, Mastercard buying Datacash, PayPal adding Braintree, and Ingenico getting Ogone and Global Collect — in noting that most e-commerce payment gateways are owned by large companies that champion their own agendas.

"Those companies may try to steer other types of processing their way," Luria said. "For merchants looking for a flexible solution that does not tie them to any other types of processing, the options may be more limited."

Stripe is a strong independent e-commerce provider, but "there appears to be room for more participants in this market," he added.

Intrapay wants to carve its niche as a platform that will allow merchants to offer consumers all payments types, but doesn't want to be viewed as just a payments switch. Intrapay sees itself as more of a gateway center providing value through data reports, reconciliation files, access to acquiring partners and funding from acquiring banks.

"This is where we can improve things with faster settlement cycles, currency optimization and other benefits that make us a payments gateway under an independent payments service provider model," Vanpraet said.

For starters, Intrapay will focus on where its expertise lies in serving online, video and video gaming sites, as well as those in the travel, entertainment and financial services verticals.

"Our plan is to not stretch ourselves too thinly over many markets, but to concentrate on a few and eventually expand," Vanpraet said.

Part of that expansion would include in-store POS options, especially for clients it serves for e-commerce but also wants to serve in a brick-and-mortar setting.

Intrapay handles the bulk of the payment processing on its platform, but on the back end of the system it will route transactions that don't go through Intrapay to other processors or card networks to move onto the bank for funding.

"We don't want to make it sound like it is perfect, but we are having dialogue with the merchants to determine what they want and we have the transparency to see what it is they really need," Vanpraet added. "The feedback we are getting is very refreshing, and the more data you collect, the more relevant you can make your payments solutions."

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Digital payments Payment processing APIs