Balderton Capital backs Primer, a fintech helping merchants consolidate the payments stack

Founded by ex-PayPal employees – via PayPal’s acquisition of Braintree — Primer is busy building out a payments API to (hopefully) rule them all, with the explicit aim of bringing greater transparency to a merchant’s payment stack.

The thinking is that larger merchants, especially those that operate in more than one geography, have to support an array of payments methods, which brings with it significant technical overhead, a poor user experience, and lack of transparency.

Primer wants to carry out a lot of that heavy-lifting on behalf of merchants, essentially building a payments platform that is payment method agnostic. By doing so, it aims to reduce friction when adopting new payment methods as they come to market, and provide better insights into things like how well each checkout option is performing, and how much it is really costing.

“Payments is super complex,” says Primer co-founder Paul Anthony, who was previously Head of Solutions for EMEA at PayPal-owned Braintree. “Merchants have become increasingly sophisticated over the past few years in what they need from their overall payments solution, which requires them to leverage a variety of payment service providers (PSPs), local banking relationships, proprietary payment methods (think Klarna, GoCardless, Affirm, and WeChat) and other third party payments services in order to expand to new markets and offer the payments experiences their customers demand”.

Despite this complexity, Anthony says that merchants continuously try to optimise for cost and authorisation (i.e. acceptance rates), and reduce fraud and improve the user experience. At the same time, they have to adapt to macro changes in the payments landscape, such as PSD2 and 3DS 2.0.

As a result, it becomes increasingly complex for merchants to scale payments as they grapple with an ever growing number of “interdependent” technical integrations across payments services.

“This can directly impact the user experience at checkout, and, critically, reduces visibility of data across increasingly complex payments ecosystems,” he says. “Fundamentally, this is an infrastructure challenge”.

The pitch to merchants is that Primer will build the infrastructure for them, delivered through a unified API and data and analytics tools to help “supercharge” their global payments strategies.

An example, Anthony cites a ticketing merchant that is currently working with Stripe, Braintree, Adyen and PayPal across Europe in order to optimise for cost and authorisation rates, and to offer local payment methods in key markets. The merchant has also directly integrated with a local banking partner to process SEPA payments.

“In order to be absolved of exposure to sensitive payment information, and to offer a reasonable checkout process, they are using the payments integrations of each PSP,” he explains.

This, of course, causes a number of problems, such as multiple checkout pages and processes, and payment information that can only be stored against an individual PSP, meaning recurring transactions are restricted to the PSP the customer originally checked out with.

Adds Anthony: “In addition to multiple payments integrations, the merchant also needs to maintain multiple integrations to their fraud provider and create an abstraction layer to manage this sensibly. Their reporting and data comes from multiple sources, making it very difficult for their operations teams to manage basic functions, such as reconciliation. They have no well defined technical strategy in the event of PSP downtimes [both Braintree and Adyen have suffered downtime recently]”.

Primer claims to solve this by providing merchants with a single payments integration that manages the front-end checkout process and backend consolidation of payments services, including not just PSPs but also fraud providers and other third-party services in future.

“Primer centrally stores payment information, making recurring cross-processor transactions seamless,” says Anthony. “Our reporting and analytics enables merchants to see all transactions in one place, and we’re working closely with merchant finance teams in order to meet their requirements and stop them needing to log in to multiple PSP dashboards, which they literally do every day!”.