With global digital payments revenues set to reach $14.79 trillion by 2027, payment infrastructure has arguably never been more critical.

But at the same time technology is becoming necessary, the costs and complexity associated with it are increasing.

One recent survey shows that merchant satisfaction with their payment processors has dropped significantly, especially when major technical hurdles arise.

In an effort to find a solution to these problems, Klas Bäck, Albert Drouart and Dan Blomberg founded Pagos, a “payment intelligence” startup.

Braintree

Comprised of payment experts with experience from Braintree, PayPal and Stripe, Pagos transforms disparate digital payments data into actionable insights without customers having to change their payment processors.

CEOs Bäck and Drouart have held leadership positions at Braintree/Venmo and PayPal for the past eight to nine years; Braintree/Venmo bought PayPal in September 2013.

Blomberg has founded seven startups and sold five over the past two decades.

“Payment processing is critical to customer relationships, revenue, and a business’ bottom line, but it’s becoming increasingly complex to manage well,” Bäck told TechCrunch via email.

“Most companies do not have the tools, data or knowledge to develop or execute an effective payment strategy; even those that often leave significant opportunities on the table.

Pagos was founded on the principle that almost all companies need help to become more data-driven when it comes to making payments.”

Vendors

Payment infrastructure vendors aren’t exactly a dime a dozen, but a growing number are chasing a huge market opportunity.

San Francisco-based Streamline recently raised $4 million for its suite of business-to-business payments products.

Kushki is a much bigger player — the Ecuadorian payments infrastructure startup raised $100 million last year at a $1.5 billion valuation.

So what does Pagos bring to the table? Bäck claims it uniquely enables companies to stream and store their payment data – including transaction and fraud data – in one place.

From a single dashboard, customers can visualize data and track metrics, including transactions, payment authorization and risk performance.

Pagos offers connectivity to payment processors such as Adyen, Chase, Braintree, PayPal, Stripe and WorldPay, as well as data ingest.

API to allow businesses to stream payment data and custom metadata to the platform.

API

“Our actionable products collect company data and provide APIs that allow developers and business partners in the company to build a more sophisticated payment system to address issues like loss, risk and cost.

Ask Pagos for recommendations on what credentials , where and how to send your transactions for maximum profit,” said Bäck.

“Pagos is different because we’re not trying to offer new plumbing; we want them to make better use of the collection of suppliers and partners they have, which could include changing processes and systems to solve problems.”

In terms of customers, Bäck says that Pagos, whose platform has processed more than a billion transaction events, targets companies that sell or bill their customers online.

As well as companies that provide services to them, such as fraud providers, platforms for payment orchestration, acquirers, payments. service providers.

Market

Software-as-a-service verticals and marketplaces. Current clients include Adobe, Eventbrite, GoFundMe, Peek and Warner Bros Discovery.

“Pagos allows businesses to see what’s happening inside the payment package,” said Bäck.

“Use cases include adding new payment partners and payment methods, identifying optimal payment methods and routes, tracking payment and chargeback metrics, and optimizing recurring billing to reduce loss.

Some investors see a value proposition. Pagos today closed a $34 million Series A round led by Arbor Ventures with participation from Infinity Ventures, Underscore VC and Point 72 Ventures.

Profit

This brought the company’s total profit to $44 million, which, according to Bäck, is intended to finance new employees in engineering, product development and “faster customer implementation.”

“We weren’t actually looking for additional capital right now.

However, we were inundated with interest from incoming investors and recognized a unique opportunity to expand our customer base even faster, especially in today’s volatile economic climate,” said Bäck.

“This opportunistic Series A round was significantly oversubscribed.

As for the future, Bäck says he’s not too concerned about the tough macroeconomic climate for startups. In fact, he argues, the pandemic fueled a surge in e-commerce that, while it has since died down, had lasting effects.

Payments

As far as Bäck is concerned, the pandemic has led to a measurable increase in the use of digital payments. The World Bank’s Global Findex 2021 database found that – in low- and middle-income economies excluding China – more than 40% of adults who made payments at a merchant in-store or online using a card, phone or internet did so for the first time since the start of the pandemic .

“Back-up financial infrastructure remains critical. Now more than ever, helping companies sell more and reduce their costs is rapidly resonating,” said Bäck.

“Over the past 9-12 months, many companies have been particularly focused on reducing their operating costs.

This is something that Pagos is particularly well positioned to do – most companies can even start without any integration work, making the return on investment extremely fast.”

Over the next year, Pagos plans to “greatly expand” the remote software, product, sales and account management teams within its 41-person workforce, Bäck says.
Point 72 Ventures, Infinity Ventures and Underscore VC participated in the round, the proceeds of which will be used to expand the Pagos engineering team and further develop the platform’s suite of enterprise products.

The Pagos platform is used by online brands such as Adobe, Eventbrite, GoFundMe and Warner Bros Discover to transform disparate, hard-to-access digital payment data into clear and actionable business insights.

Sources: Techcrunch | Finextra.com