Meet ProcessOut, a French startup that automatically routes transactions to the best payment provider. This way, big online services can start using multiple payment providers, pay fewer fees and reduce the number of declined transactions.

The startup has just raised $1 million from various business angels, such as BlaBlaCar CTO Francis Nappez, former PayPal Director of Global Business Development Benjamin Blasco, Logmatic CEO Amirhossein Malekzadeh and Amadeo Brenninkmeijer. ProcessOut is also backed by Techstars and 50 Partners.

“Look at how companies, such as Airbnb and Dropbox, handle payments. Those companies have teams of 10, 15 or 20 people who work full time on optimizing the technical and economical performance of payments.” co-founder and CEO Cyril Chemla told me. “ProcessOut acts like those payment teams for Datadog, BlaBlaCar or Vente-Privée.”

Behind the scene, ProcessOut has built a smart routing service that works with dozens of payment service providers. The startup’s biggest clients save a ton of money by using ProcessOut.

These days, many small startups start accepting payments by signing up to a developer-friendly payment provider, such as Stripe or Braintree. But using Stripe doesn’t necessarily make sense when you’re processing millions of transactions a year. You want to optimize and create some redundancy.

For instance, banks often have their own payment service providers. They are often hard to deal with and quite ugly, but they are also much cheaper than modern alternative service.

But that doesn’t mean you should switch altogether to a bank’s payment service provider. Many transactions fail because of a technical reason, or because the payment service provider or the customer’s bank have deemed the transaction too risky — it’s a non-negligible parameter.

ProcessOut has built two different services. First, Telescope lets you monitor all your transactions in a few minutes and give you recommendations. For instance, the service can tell you that you’re overpaying for transactions in the U.S., that your decline rate has been going up lately and more. This service is free and a great way to attract new customers.

Second, ProcessOut has built its own checkout module to act as an intermediary between your client and your payment service providers. The startup can store credit card information, which makes it easier to switch to a new payment service provider.

ProcessOut customers can then hook the service with multiple payment service providers and let the startup handle payments. While it’s easy to figure out the cheapest provider, it’s much harder to understand if the bank that issued your customer’s credit card is going to accept or decline the transaction. That’s why ProcessOut is slowly learning how each bank works.

The startup takes 1c to 5c per transaction. ProcessOut says that it represents less than 10 percent of what you save on fees and failed transactions. It should be an easy sell.



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