— Bruce Parker’s obsession is an invisible
technology that you use each day but rarely think about:
payment systems that shuffle money around after you
swipe your credit card, reimburse your friend through an
app or make an online purchase. Parker — a
self-described payments geek — is the founder and CEO
of ModoPayments. That’s short for "mobile
does" or "more dough."
acts as like a payment plumber. It uses a transaction
system called COIN to connect financial services
companies or other sources of value with digital payment
tools. It connects old and new payment systems and can
integrate loyalty programs. Its list of clients includes
Bank of America, VeriFone and European financial tech
began the company in 2010 thinking it would help brands
build their own payment app, like Starbucks did. But
over time, when it became clear that few customers were
ditching their plastic credit cards for phone payment
apps like Apple Pay, Modo pivoted. It lopped off the
consumer-facing part and decided to sell "the
engine that converted value," which was the COIN
has raised about $11.6 million from strategic partners
and investors. It was used for about $10 million of
transactions in January, but Parker said he’d like to
see that grow to $85 million per month by December.
spoke about the startup’s growth at Modo’s suburban
Dallas office. His answers have been edited for brevity
How did you become an entrepreneur?
I was the head of strategy for the largest payment
software company in the world — ACI Worldwide. I was
asked by the board of directors to do a review of the
impact of mobile on the payments industry. And they
never took the briefing. I spent over a year on this,
with this big team and we were studying all of these
was the classic frustrated corporate dude who had some
insights, some ideas and some experiences, and it took
me a full year to get up the gumption to quit over this.
I finally decided something was going to happen. I
needed to be a part of it, and that was ultimately when
What does Modo do? How do you typically explain it to a
Every form of payment you can think of started as paper.
All of the computer systems that deal with that stuff
follow the same path. They think in terms of ‘I’m
going to bring all of this stuff in, dump it on the desk
and figure out what to do with it.’ That’s batch
processing. It’s a very industrial kind of thing.
enable people to say ‘You can have as many
participants in payment as you want and you can add them
whenever you want.’ You can verify that someone has
good money before you go down the path of trying to
exchange value. We can figure out ‘This person has
loyalty points. This person has a gift card. And this
person has goats, whatever it is’ — and we can make
sure everyone agrees on what that value is.
Give me an example of a client and how they use you.
For Bank of America, we’re connecting a system that
sends payments between companies and individuals. The
most compelling example is sending value between Google
(which owns YouTube) and somebody who’s posted a video
on YouTube. When those folks were from North America,
that was very, very easy. Send them a check. Ask them
for their bank details.
we’ve got people in Indonesia, the Philippines and all
over the world posting videos to YouTube and they’re
going viral. All the sudden YouTube needs to pay that
person and they may not even have a bank account. If
they’re in Indonesia, they may be on a different
island from where there is a bank. What we’re doing is
we’re connecting that disbursements platform to an
individual anywhere around the world. We are going to
use PayPal, AliPay, M-Pesa and 117 other digital
payments networks around the world that those consumers
may or may not already participate in. That person in
Indonesia can use their version of Paypal — Dompetku
— and they can say, ‘Oh, I got paid from my Youtube
video’ instead of having to figure out, ‘How do I
take the check to the bank?’ or ‘How do I provide
bank details, which I may or may not even have?’
You’ve spoken to me before about how unconventional
things have become forms of currency — especially in
parts of the world where people are unbanked and where
currency is unstable. How is that changing the way we
think of money?
The example everybody likes to talk about is M-Pesa
based out of Kenya. A mobile carrier wanted to enable
people to send value back and forth to one another, but
the currency was complicated, so it let people to send
(cell phone) minutes to one another. Fast-forward ten
years and the value of a minute is more stable than the
value of fiat currencies amongst a handful of countries
that these folks happen to be very active in. You have a
stand-in for a currency, so I can trade airtime minutes
more easily than I can trade dollars or whatever it is.
You have blazed your own trail outside of traditional
fintech capitals like London or New York. What’s kept
you in Dallas and what has it been like?
This is home. This is where family is. This is where
friends are. … To me, moving simply for the sake of
being part of the cool kid club is not really
motivating. Unless somebody could explain to me why that
actually helped something, I never found that enticing.
cost of living here — although going up — is still a
fraction of London or New York or San Francisco. For a
startup, talking in terms of how much capital we’ve
raised and how long we’ve been around, what that
directly translates to is time. … It gives us the
flexibility to find the real market opportunity and
pursue it to its logical conclusion without the absurd
time pressures of what people in New York, Boston, San
Francisco and London have to experience. They’re fruit
flies. They raise a fair amount of money, but then they
spend it very, very quickly, and if they can’t figure
it out what they’re doing in 18 months to 24 months,
it’s over. In our case, it’s been just about seven
years. I don’t think you could do what we’re doing
in any other market.