But the fintech will still need to win over larger payments providers to operate, says the chief executive of Checkout.com.
Primer launched earlier this year in a bid to make online payments for big merchants easier. Primer wants to connect into multiple payments service providers (PSPs) — including Checkout.com and Stripe — and then consolidate them into one platform, avoiding reliance on a single provider or having to clumsily manage multiple providers at once.
“I’m not even sure Checkout would agree for [Primer] to use our rail,” he said in an interview with Sifted last week. He argued that having “another layer” like Primer was unnecessary and would only incur costs to merchants.
“They’re saying they’re making 10-12p per transaction, while Checkout makes 4p on average… Big merchants say they want less fees”, he said. “If Primer survives, it will be routing volume to incumbents that can’t compete on technology.”
Bringing on Accel today is also a feat. The fund is the most active US-based VC in European fintech, according to a Sifted analysis, having backed the likes of Monzo and Trade Republic in recent years.
Primer’s co-founder Paul Anthony also sounded resilient in an interview with Sifted last month, saying:
“The walled gardens that have been built up by the likes of Stripe, Adyen, Checkout, et al. will now be torn down.”
Disrupting the disruptors
Checkout.com is a big player in the space, albeit a relative newcomer itself.
The payments provider came out of obscurity last year after raising a record $230m Series A round — the largest of its kind in Europe.
But Checkout.com could now face disruption itself in the form of Primer.
He added: “It will only be a race to the bottom for these PSPs, competing on price… PSPs will become a commodity.”
Given Primer relies on collaboration from providers (just as the Amazon marketplace relies on its individual suppliers), obstruction form Checkout.com could prove a hurdle for the startup.
When approached about Pousaz’s comments, Primer’s Anthony responded to Sifted saying:
“Merchants should be free to own the technical implementation around accepting and managing payments online, and Primer enables them to do that…Our alignment is with the merchant – enabling them to manage and grow their payments ecosystems in an extensible way.”
If Primer generates enough demand, Checkout.com may well be forced to re-evaluate integrating with third-parties.