UK fintech Atoa secures $2.2M as it kills Visa and Mastercard fees for businesses
Atoa reduces a merchant’s cost of accepting payments by up to 70% and ensures immediate payment instead of the standard 1-2 days for debit cards.
London, United Kingdom –News Direct– Atoa Payments
There are more than 4 million small businesses in the UK that have no viable alternative to debit card payments and rely on Mastercard or Visa payment gateways. To challenge this status quo, UK fintech Atoa Payments announces a $2.2 million pre-funding round to reduce payment fees by 70% and offer a new approach to making payments.
The funding round was led by Leo Capital and Passion Capital and also included renowned angel investors such as Matt Robinson (co-founder of GoCardless and Nested) along with Moon Capital Ventures. Anil Stocker, co-founder and CEO of MarketFinance also acts as a company advisor.
Mastercard and Visa payment rails have an effective duopoly in the market which enables them to get away with net margins as high as 51% at the expense of small merchants and their customers. On top of this, card machine providers charge small businesses up to 1.75%. Atoa is building a truly viable option for small businesses to accept payments at a fraction of those costs while meaningfully improving their cash flow.
Using Atoa is seamless. Businesses simply download the Atoa app and connect their bank account securely. Configuration takes less than 5 minutes, after which the merchant can accept payments via SMS, Pay-by Link or by displaying a QR code on the Atoa app or the physical QR stand next to the till. At the same time, their customers don’t need to download a separate app to pay, removing a significant point of friction that hindered merchant options until now.
Any customer with a UK mobile banking app on their phone can safely pay a merchant using Atoa. Without requiring a separate consumer app, the customer simply scans the merchant’s QR code or clicks on the link sent by the merchant, selects their bank, and is then redirected to their existing mobile banking app to authorize the payment, meaning the merchant receives the money. immediately.
Sid Narayanan, co-founder of Atoa Payments said: “We are grateful to have the support and partnership of such strong investors who validate our plans to break the card payments duopoly in the UK and improve the cash flows and finances of the country’s small merchants. At a time of record inflation and in the midst of a cost of living crisis, the UK’s small and mid-sized merchants to keep their costs down, provide great customer service and maintain profit margins. Atoa is here to empower merchants and improve their cash flow and bottom line.”
Atoa Instant Bank Pay allows small merchants to receive payments at a flat fee that is up to 70% cheaper than card machines provided by SumUp, Zettle or Square. The sellers then receive funds in their bank accounts immediately instead of having to wait 1-2 days, as is usual with card machines and debit cards. Using Atoa involves no contracts (pay as you go), no hardware fees and no risk of chargeback fraud (all payments are approved via the banking app and have strong customer authentication).
In contrast, small retailers today are locked into contracts and typically have far from transparent fees to pay, including authorization fees, hardware fees, PCI compliance fees and more that all eat into their margins. Hardware fees can be as high as £29/month.
Robert Dighero, partner at Passion Capitalsaid “Atoa has come to the UK market at the right time to take advantage of open banking and provide small and medium-sized merchants with a truly viable alternative to payment cards and card machines that can be deployed in-store within minutes. We are delighted to be working with Atoa- team after their initial fintech success and look forward to working with them as they reach even greater heights with Atoa.
Shwetank Verma, Partner at Leo Capital, said “Leveling the playing field for independent, small and medium-sized merchants is an obvious opportunity that benefits everyone, not least consumers. We have seen this business model succeed in India and SEA and we look forward to working with the Atoa team to help them build another successful business in a massively growing market.”
Since its launch in June, the company has experienced more than 100% monthly growth in terms of both total payment volume (TPV) and number of merchant customers. Over time, the founders’ ambitions are to become a regular, small business-friendly payment method that replaces payment cards.
About Atoa payments
Atoa was co-founded by Sid Narayanan, Cian O’Dowd and Arun Rajkumar, who all previously founded Singapore-based fintech KlearCard, which was acquired last year by Validus. Their first successful venture has motivated them to seek even greater heights and influence and to focus on one of the largest retail markets in the world, the UK. After securing their pre-seed funding round, the co-founders relocated to the UK and have achieved unprecedented traction since the summer of 2022.
About passion capital
Passion Capital (passioncapital.com, @passioncapital) was established in 2011 to bring founder-friendly operational investment to the UK and Europe. Founded by former entrepreneurs rather than traditional private equity fund managers, Passion was one of the first operator-led dedicated early-stage venture funds in Europe. In addition, it was the first in the world to publish and use a common English language term sheet and not charge the portfolio companies their own legal or other fees, the first in Europe to publish fund infographics and host joint office hours (for pitching sessions), and the first to manage a cooperative office.
Over the past decade, the team has invested in some of the strongest European founding teams, including those from GoCardless, Monzo Bank, Lendable, Marshmallow, Tide Banking, Digital Shadows, Smarkets, Tray.io, urban, Spotahome, Butternut Box, Nested, PolyAI , Causal, Fertifa, Screenloop, Sequence, True Circle and many more.
About Leo Capital
Leo Capital is a Singapore-based early stage venture fund, built by serial entrepreneurs with global experience. Leo Capital supports companies that run a software-enabled world and supports their founders on the journey from great founder to great CEO. We are excited to partner with founders who are building tomorrow’s iconic companies. Please see for more details.
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