Reportedly, in the UK, there are over 4 million small businesses without any viable alternative to debit card payments. Apparently, they are reliant on Mastercard or Visa payment rails and pay a fee
A UK-based fintech Atoa Payments is building a truly viable alternative for small businesses to accept payments at a fraction of those costs and to improve their cash flow meaningfully at the same time.
New approach to payments
In a recent development, Atoa Payments has scored $2.2 million in pre-seed funding. The funding round was led by Leo Capital and Passion Capital (which backed Screenloop) alongside participation from angel investors such as Matt Robinson (co-founder of GoCardless and Nested) alongside Moon Capital Ventures. Anil Stocker, Co-Founder & CEO of MarketFinance also serves as a company advisor.
Atoa Payments will use the fresh investment to reduce the payment fees and offer a new approach to making payments. Also, the investment will support its growth.
Sid Narayanan, Co-Founder of Atoa Payments said, “We are grateful to have the support and partnership of such strong investors validating our plans to break the card payment duopoly in the UK and to improve cash flows and economics for 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 medium merchants are struggling to contain their costs, provide great service to the customers, and maintain profit margins. Atoa is here to empower merchants and to improve their cash flow and bottom line.”
Robert Dighero, Partner at Passion Capital, said “Atoa has come to the UK market at the right time to leverage open banking and bring to small and medium sized merchants a truly viable alternative to payment cards and card machines that can be deployed in-store within minutes. We’re delighted to work with the Atoa team after their first fintech success and look forward to partnering with them as they achieve 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 which benefits everyone, not least of which consumers. We have seen this business model succeed in India and SEA and we’re looking forward to working with the Atoa team to help them build another successful business in a massively growing market.”
Founded by serial entrepreneurs
Atoa Payments was founded by serial entrepreneurs, including Sid Narayanan, Cian O’Dowd and Arun Rajkumar, who previously founded Singapore-based lender KlearCard, which was acquired last year by Validus. Their first successful enterprise has motivated them to seek even greater heights and have a greater impact and to focus on one of the largest merchant retailer markets in the world, the UK.
Since its debut in June, the company has experienced over 100% month-on-month growth in terms of both Total Payment Volume (TPV) and number of merchant customers. The founders’ ambition is to become a mainstream small business friendly payment method replacing payment cards.
Merchant payments made simple
Using Atoa Payments is seamless. Businesses can simply download the Atoa app and securely connect their merchant bank account. The process of setting up takes less than 5 minutes, after which the merchant can accept payments via SMS, Pay-by Link or by displaying a QR code on their Atoa App or physical QR stand.
On the other hand, their customers do not need to download a separate app to pay, which was an issue faced by merchants until now. Any customer with a UK mobile banking app on their phone can securely pay a merchant who is 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 then is redirected to their existing mobile bank app to approve the payment, which means the merchant can receive the funds instantly.
Atoa Instant Bank Pay service
Atoa Payments is taking advantage of Instant Bank Pay, which leverages open banking innovation delivering better customer outcomes and opportunities for efficiency.
Atoa Instant Bank Pay allows small merchants to receive payments at a flat fee, which is up to 70% cheaper than card machines provided by SumUp, Zettle or Square. The merchants then receive funds in their bank accounts instantly instead of having to wait 1-2 days as is the usual case with card machines and debit cards. Using Atoa involves no contracts, no hardware fees and no chargeback fraud risk.
Small retailers are locked into contracts and have far from transparent fees to pay, including authorisation fees, hardware fees, PCI compliance fees and more. Notably, the hardware fees can be as high as £29 per month.