When Rainforest raised our recent seed funding, one of the questions posed by several investors was whether Rainforest had built its core technology or built a wrapper around another payments processor.
Of course it’s important for investors to understand the company’s core intellectual property, but the answer to this question also has real implications for clients.
When a payment provider owns their core technology:
- They know that technology inside and out.
- The support team is sitting in the same room as the people who built the core technology.
- The company has complete control over their product roadmap.
- The payments provider controls risk and has the autonomy to make risk management decisions, which enables fast response times and personalized service.
They have the ability to quickly respond to client needs – whether that’s troubleshooting an issue, customizing a configuration, or prioritizing a new feature to meet the needs of a rapidly growing client.
When a payment processor doesn’t own their core technology:
- They know the core technology pretty well… but probably not as well as they know the wrapper.
- The client support team may be in the same room as the people who built the wrapper, but the people who built the core technology are… where?
- They’ll be able to quickly respond to some client needs, but others will need to be escalated to the underlying payments provider who does own the core technology.
- The payments provider needs to escalate risk management decisions to external teams, which means slower response times and impersonal service.
- The core technology is almost always a legacy payment processor that wasn’t built for modern embedded payments use cases. The wrapper has to do a lot of extra work to compensate, which means more complexity and more failure modes.
When investors ask about the core technology, it’s not just about intellectual property. It’s also about who owns that core technology on a day-to-day basis, who understands that technology and its intended use, and who controls the future of that technology.
Rainforest is not a wrapper around another payment processor. We assembled a team of payments veterans and built our core technology from the ground up specifically for embedded payments.