Payments remains a very fragmented business around the world: depending on where you buy or sell something (and whether you sell online or offline), you will have different “standard” payment methods, currencies, payment schemes, and more. Today a startup called Kevin it takes one piece of that puzzle – account-to-account payments, an alternative to payment cards that bypass those rails – and makes it easier and more ubiquitous to use by developing an entirely new set of payment infrastructure that integrates directly with banks, announces a sizable $65 million Series A to double its business after some strong initial upswing.
It has already attracted 6,000 merchants in 12 European markets, starting first with e-points and most recently with physical POS integrations. Its plan is to have it available as a payment method in around 35% of European e-commerce terminals by the end of this year, and 85% in a year, “just like any card scheme,” said CEO Tadas Tamosiunas. in an interview.
The UK will be later this year, but at the end of this year there will be 35% of European EPOS terminals, and then 85% next year, just like in the card scheme.
The round is led by Accel, which also includes Eurazeo and previous sponsors OTB Ventures, Speedinvest, OpenOcean and Global Paytech Ventures. Harry Stebbings of 20VC; Ilkka Paananen, CEO and co-founder of Supercell; and Amitabh Jhawar, former CEO of VenmoVilnius, are also investing in this round. Kevin has already raised $77 million and he won’t disclose his valuation.
Lithuanian-based Kevin was co-founded by Tamosiunas and Pavel Sokolovas (COO), who said in a joint interview that the plan would be to use the funding to continue developing their technology and hire more people to reach more markets. starting from the beginning with the coverage of the whole of Europe.
Kevin is technically called “Kevin”. – including dot. Tamosiunas said the choice was made for several reasons: firstly, “Kevin” as a common name, the idea was that it was a technical payment solution that would be useful for everyone; second, a period, implying that this is the first and last name that you need to know in business; but thirdly, as the beginning of a conversation. “It gives us the opportunity to tell our story,” he said simply.
This story is well known to merchants and others working in payments and commerce: each country has different payment systems both externally and internally in the process. Account-to-account payments, which essentially take money directly from the buyer and deposit it into the seller’s account, have long been one such option and are often a much cheaper and direct alternative to card payments and the fees they incur. when someone else is not using cash.
The problem is that much of the pre-existing account-to-account payment infrastructure is very clunky, not built around APIs, and therefore difficult to extend and integrate into any new services, both physical and electronic stories. point of sale”, which can be in a store, but can also easily be, for example, in a parking time payment application.
“But switching from one account to another is a cheaper process, so we had a great opportunity to solve this problem, especially in EPOS,” Sokolovas said. Over the years, Kevin had a lot of skeptics at first, skeptical about the possibility of creating an API to integrate with banks, which have traditionally been slow to accept them and open their services to others. Of course, there are exceptions, such as the open banking efforts we have seen in the United Kingdom, but overall it is a fragmented and still mysterious area. “Now we are the only company on the market that has the technical solution.”
There are other companies now — for example, POS giant Worldline is working on a solution for accepting account-to-account payments, Tamosiunas said, but it will take years to build, he said.
The more important theme is that e-commerce remains a large and rapidly growing area, but with the return to physical movement after the peak of the Covid-19 pandemic, the focus is also changing. “Everyone is looking for ways to improve sales offline, at the point of sale,” Tamosiunas added.
The breakthrough that Kevin is aiming for here is not only that he discovers and modernizes a process that has been around for years but is difficult to use; but it also gives merchants, consumers, and anyone involved in any transaction a more direct way to make a specific payment. Being more direct means that it is also cheaper, which is also an important part of the offer: it means that anyone who chooses this option can make more profit from transactions. Conversely, it also removes many of the traditional players in the payments ecosystem from the equation, which is another violation.
This is what attracted the attention of not only investors, but also potential strategic partners and potential acquirers of the startup. The founders didn’t go into details about who’s knocking on their door, but you can imagine that there could be other big players in payment technology, old and new, among them (including Stripe, Adyen, PayPal, and maybe even major railroad credit card companies). interested in using this technology in the diversification game. For now, Kevin has refused to even work with them as strategic investors in order to remain neutral and not tied to any specific platforms.
“Tadas, Pavel and Kevin’s team are enabling the future of payments with their next generation payment infrastructure,” said Luca Bocchio, partner of Accel, in a statement. “Offering fast and hassle-free payments with reduced costs and increased authentication speed, the time has come for A2A payments, and Kevin has already built impressive momentum with his proposal. There are huge opportunities with the launch of a unique POS payment product and we look forward to partnering with the team on their journey.”
One interesting point here will be whether and how Kevin and his ilk will be integrated with mobile wallets.
Today, Kevin works in the service industry, where a merchant integrates their technology into their point of sale, be it physical or electronic, and in an app. But wallets like Apple Pay or Google Pay only work with cards today. With so many card transactions now being superseded by NFC-based payments using people’s phones, this could potentially limit Kevin’s growth if it also fails to offer consumers an alternative to pay in this way.
By the way, Apple literally yesterday he was convicted of anti-competitive practices EU on how it opens up (or doesn’t open up, as the case may be) its NFC-based wallet technology to other parties. This is something to watch and it could have a big impact on how Kevin grows in the future.
Credit: techcrunch.com /