Originally published on TechCrunch

Unicorn eCommerce startup Klarna and digital payments startup Modo announced a new strategic partnership this morning at Money20/20 Europe. Under the terms of this new partnership Modo will provide Klarna with its Digital Payments Hub product to speed up implementation of Klarna’s  checkout solution for their worldwide e-retail partners.

We reported on Modo’s recent funding round and also their Digital Payments Hub back in February. This hub—which is sort of a Rosetta Stone of converting monetary or loyalty value—enables the Richardson, TX startup to make value conversions (monetary, loyalty or otherwise) between disparate systems without changing existing infrastructure.

The hub utilizes Modo’s patented COIN® transaction system to manage the complexities of payments systems integration “by connecting them and mediating the differences between processes.” The COIN® provides transaction services that include: accounting, settlement, compliance, transaction management, and risk management. Thus the Digital Payments Hub is often referred to by Modo as being “COIN® Operated” which is a clever and branded way to signify their product in partnerships.

Ultimately, the outcome of this partnership is that Klarna will be able to integrate their high conversion eCommerce checkout solution with their e-retail partners much faster than was previously possible for them. They are actually referring to this as “instant integration.” I’m sure nothing is ever quite that easy but by comparison to normal integrations, the teams are professing that there will be a big speed improvement in getting Klarna integrated with their clients and partners.

Klarna North American CEO Brian Billingsley said as much about the process and partnership:

“I’ve been following Modo for a few years, and knew that their platform could help us accelerate getting new customers on board, and getting new products into the market. So I was glad to be able to put together this opportunity to work with them. Modo’s secret sauce is their COIN transaction, which allows Klarna to connect different payments systems together, without making any changes. Klarna can focus on delivering even simpler ways to buy, and Modo makes the connections work, flawlessly. “

But beyond integration, Modo CEO Bruce Parker indicates that the Modo payments hub also stands to enable some other efficiencies resulting in cost savings for companies that use it. According to Parker, in all financial systems there are always anomaly transactions that take place. This can happen whenever connecting systems temporarily get out of sync. These anomaly transactions need to be handled by human beings and there are departments that handle these, either manually reconciling them or deleting them.

He pegged the industry standard transaction exception rate at 30 basis points (.003). In their pilot with Klarna, Modo was able to achieve a transaction exception rate of one tenth of a basis point. When you get to millions or even billions of transactions taking place, the number of exceptions really adds up and can require large staff of employees to manage.

Modo’s payment hub could decrease the number of people required to manage these anomalies by two orders of magnitude. This means, according to Parker, that connecting dissimilar financial systems is no longer cost prohibitive for many types of financial institutions, and the team is already planning to make this service available to multiple banks in short order.