The UK Startup Atoa Payments has raised $2.2 million in a pre-seed funding round


Recently, the UK startup Atoa Payments has raised $2.2 million in a pre-seed funding round. 

The interest in the startup increased after Sid Narayanan, co-founder of Atoa announced that their solution reduces by 70% the payment fees and offer a new approach to making payments. 

Atoa Payments uses open banking to offer merchants an alternative to debit card payments.

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Let’s find out why Atoa Payments attracted the attention of venture capitalists.

Both Mastercard and Visa raised cross-border fees from 0.2% to 1.15% for debit cards and 0.3% to 1.5% for credit card transactions last year. This fact became the reason why UK SMEs started looking for alternative ways of payment. 

The Government research in August 2021 found that 44% of UK SMEs don’t use technology or web-based software to either sell to customers. They prefer only to use debit card payments and are reliant on Mastercard or Visa payment rails. But, most FinTech experts believe it’s just because of the lack of reliable tech vendors in this area.

Atoa Payments decided to change the situation on the market and developed their own solution that helps small business owners reduce the by 70% the payment fees and offer a new approach to making payments. How does it work?

To start using Atoa’s payment system, the merchants have to download the Atoa app and connect their merchant bank accounts. Within 5 minutes of set up, merchants can accept payments via SMS, Pay-by Link, or QR code. The QR code can be displayed on the screen or printed on paper. 

The biggest benefit of the solution is that customers don’t need to download the application. Instead, they scan the QR code, select their bank from the list of suggested, and then they will be redirected to their bank app to approve the payment.

At the same time, this application solves several issues:

  • Merchants save their money, by paying fewer fees.
  • Customers make a payment directly from their bank app
  • The UK market broad the ways of card payment

Sid Narayanan, co-founder of Atoa, says: 

“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.”

Shwetank Verma, Partner at Leo Capital, believes that leveling the playing field for independent, small and medium-sized merchants is an obvious opportunity that benefits everyone, not least of which, consumers. He sees this business model succeed in India and SEA. Shwetank Verma is looking forward to working with the Atoa team to help them build another successful business in a massively growing market.