Payments remains one of the most fragmented of online services, a situation that is only compounded when your business trades internationally. A UK startup called Paytrix says it has raised $18.3 million to build a solution to fix this: a single platform — and single contract — that lets its customers manage all of the different payments options from payment acceptance to payouts, in one place.

The funding is a Series A and it is being co-led by Unusual Ventures, Motive Partners and Bain Capital Ventures. Bain had also been a part of Paytrix’s previous round of £5.2 million in May 2022 with Fin Capital, Better Tomorrow Ventures, Hambro Perks, ClockTower Ventures, The Fintech Fund, D4 Ventures and various individuals, all of whom are also participating in this round. The company is not disclosing its valuation.

Aran Brown (CEO), Ed Addario (CTO), and Edward Harrison (CPO) co-founded Paytrix with collectively decades of experience at a range of well-known payments, FX, and other fintech companies, and that might be the key to why it’s been able to raise this money right now, in the most bearish of venture markets in years, and during a much tighter market in e-commerce overall. The service doesn’t have its full scope of licensing in place yet — there are plans in place both for an EMI for the UK and Europe.

Brown said that Paytrix has a Payments Institution license in the UK already approved by the FCA, “which is being upgraded to an EMI… alongside a separate application for an EMI in Ireland with the CBI.” Both were applied for last year and “are progressing well” with a team in place to support that, including the former Head of Authorisations at the CBI as its Chair, and the former chief compliance officer of Square International.

Paytrix describes itself as a “payments curation” platform, and behind an API that it provides to its customers to integrate into their own services, Brown says, it negotiates its own banking relationships in different countries, which lets it bypass the traditional payment rails used for card payments and other payment services like Stripe, as well as some of the newer channels that have been emerging in more recent years, such as open banking standards.

As Brown describes it, Paytrix integrates directly with local payment schemes through tier-one banks or locally integrated payment partners. Some of these are disclosed — it uses Modulr Financial in the UK — and some, Brown says, in the EU and APAC “we are contractually restricted from naming them.” As Paytrix is acquirer-agnostic, he said, merchants continue to work with card acquirers such as Stripe or whichever service is used, and Paytrix provides local accounts, real-time FX and instant settlement “to the sellers and downstream beneficiaries” to take care of payouts.

The company is focusing on payouts now: it processes these currently in 133 currencies and 200+ countries, including real-time FX.

He says that this arrangement cuts down on the number of third-parties that merchants or marketplaces typically have to work with, relationships that typically introduce not just costs but complexity and questions with buyers who are transferred to third-parties to make payments.

Paytrix doesn’t handle incoming payments yet, and it works with any acquirers its customers already use, whether that involves open banking or another provider. That will be “Phase 2” for the company, Brown said: “Enabling global collections which will allow merchants to collect funds in each of the markets they operate in without the burden of identifying, sourcing and contracting with the local banks, or waiting to have sufficient volume to work with a tier-one bank. This will then be followed by other payment options such as direct to card, and virtual card issuance.”

Whether all of this will work as advertised is still to be seen, of course.

Paytrix “does have a number of customers,” Brown said, but it’s not allowed to disclose most of them. One is Fyorin, a business banking platform that provides various financial services to businesses. Another is Cardstream, a payment gateway in Europe. Others include a European ticketing marketplace and a global “employee of record” platform (for managing and working with employees in international markets), Brown said.

More generally, Brown said that the company is targeting not just e-commerce companies, but also others that need to make and manage payments (accepting and making them) across multiple countries, such as payroll providers. The e-commerce opportunity is an interesting one: it’s not targeting the top tier of players like Amazon, which build and manage its own services, but hundreds of online retailers and marketplaces that have more than $1 million in annual revenues but not the resources to manage multiple supplier relationships on an operational or technical level. Typically, Paytrix said that its customers on average manage between 10 and 15 payments suppliers, so the pitch is that this can now be taken down to one.

But given the persistent problems in the market and the track records and experience of the team here, it’s a bet that investors believe is a strong one to make.

“Paytrix is addressing a critical need for businesses operating in an international marketplace,” said Matt Harris, a partner at Bain Capital Ventures, in a statement. “The complexity and cost of cross-border payments has long been a major pain point for companies looking to scale, and Paytrix’ solution neatly tackles these challenges. We believe there is a global need for this kind of payments infrastructure and we’re excited to continue our support of Paytrix as they expand their solution to businesses around the world.”

Paytrix raises $18.3M to build out its one-stop payments shop by Ingrid Lunden originally published on TechCrunch