Payments Gateways + Modo

Posted by Modo on Apr 27, 2020 3:35:00 PM

Modo CEO, Bruce Parker, discusses a core piece of payments technology, the Payments Gateway. Read below, or watch the video above to learn about payments gateways, where they are going, what their limitations are, and how Modo can help you take your gateway technology to the next level.


What is a payments gateway?

A payments gateway is something that’s been around for a long time, but it typically came on the scene primarily to help people connect to their payments processor online instead of through a terminal or in-store. Gateways originally were just “Well, how do you do online or internet transactions?” They’ve since grown up, and people typically think about payments gateways today as a means by which to access more than one payments processor or payments service provider.

How have payments gateways evolved?

Over the last several years, most payments gateways either were acquired by a payment service provider or a processor or a network, or they were created by those same organizations. In some senses the original value proposition of "Connect to us and we’ll connect you to everything else and we will remain objective," has been lost a little bit. There’s not sort of unfair routing or things like that going on, but it is absolutely the case that it is no longer subjective as it
once was.

What are the downsides of a payments gateway?

One of the major downsides of a payments gateway is they may or may not support the payment methods that you like. One of the conversations we’re super familiar with, because we’ve heard it a number of times, is support for Alipay. Most payments gateways here in the United States don’t actually support Alipay, and that becomes problematic for those who decide that that’s an important payment method for their customers. If it’s missing either a payment method or it’s missing access to a particular country, or a particular processor who may have very specific features for your business or for your offering, that’s really where a gateway kind of falls down, and that promise of just one connection to them, and they’ll give you access to anything you might need, tends to fall away.

How do I choose which payments gateway is right for me?

Deciding between gateways is generally simply a matter of do they have access to the payment services provider that you’re looking for. Whether that’s card processors, whether that’s countries, or that’s very specific payment methods like PayPal, like Klarna, like Alipay. That’s typically how people decide about gateways.

Modo is like a payments gateway in the sense that we also aggregate connections. Through one interface to Modo, through one API, you can gain access to payment services provided all around the world, of many different types, including various payment methods. In many ways Modo is more than just a payments gateway precisely because it enables many different payment methods - that’s typically something that you think of as a hub - and also enables routing between those - which is typically something you think that a payment switch providing. In fact, a gateway may or may not have some routing capabilities, it may or may not support different kinds of payment methods, but at the end of day Modo also enables you to choose the services that you want. It doesn’t really matter whether or not we’ve ever integrated it before so unlike a payments gateway, we can simply add connections to your environment to our payments stack whenever you like.

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Topics: bruce parker, payments gateway, payments stack, modo, modopayments