Originally published on The Nilson Report 

ModoPayments handles distributed transaction processing on behalf of clients needing interoperability for payment and loyalty systems. The company’s cloud-based (AWS) platform, called Coin, is a utility that solves connectivity problems between different systems that need to work together. Modo offers a digital payment hub that enables connections to many processors, acquirers, and alternative payment networks with one technical integration. Modo says its overall exception item rate is 0.05% and trending lower.

Mastercard used Modo last year in an internet of things (IoT) pilot as a way to test how to link its business-to-consumer system to facilitate payments initiated by connected devices.

Etihad Airways recently hired Modo to connect its loyalty system to its main reservation system. Modo enables loyalty points or a combination of points and new spending to be used to purchase a ticket using a virtual card. Etihad’s loyalty and reservation systems are operated by different third-party providers. They now communicate without any changes required by those providers.

FIS Global uses Modo to support a stand-alone mobile app that lets users convert loyalty cards for in-store redemptions. And Modo is working on other projects with FIS that involve interoperability in support of loyalty programs at FIS financial institution clients.

Klarna uses Modo to quickly connect to online merchants worldwide that want to integrate the company’s financing options.

Modo has received $16.5 million over five funding rounds, including $5.2 million in private equity from Deutsche Bank in August. The company is using its most recent funding round to expand existing system capabilities to approach a broader set of potential clients.

Competitors to Modo include companies that sell software directly to merchants such as ACI Worldwide, as well as payment service providers such as Adyen.