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 payment methods, currencies and “standard” settlement systems, etc Today, a startup called Kevin it’s taking one piece of that puzzle – account-to-account payments, an alternative to cash card payments that bypasses those rails – and making it easier and more ubiquitous to use through the development of a whole new set of payment infrastructure that integrates directly with banks, announces a major $65 million Series A to double its business after strong initial traction.
It has already captured 6,000 merchants across 12 markets in Europe, starting first with ePOS, and more recently with integration with physical POS terminals. Its plan is to be available as a payment option on around 35% of European electronic point-of-sale terminals by the end of this year, then 85% the following year, “like any card system”. , CEO Tadas Tamosiunas said in an interview.
The UK will be later this year, but by the end of this year there will be 35% of European EPOS terminals, then 85% next year, like the card scheme.
The round is led by Accel, with participation from Eurazeo and former backers OTB Ventures, Speedinvest, OpenOcean and Global Paytech Ventures. 20VC’s Harry Stebbings; Ilkka Paananen, CEO and co-founder of Supercell; and Amitabh Jhawar, ex-CEO of Venmo Vilnius are some of the people also investing in the cycle. Kevin has now raised $77 million and he is not disclosing his valuation.
Kevin, based in Lithuania, 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 to develop its technology and hire more people to enter more markets. , starting from first with coverage of all of Europe.
Kevin is technically referred to as “kevin”. — including the dot. Tamosiunas said the choice was made for several reasons: first “Kevin” as a common man’s name, the idea being that it is a technical payment solution that will be useful to everyone ; secondly the point to imply that it is the first and last name that you will need to know in the company; but thirdly, as a conversation opener. “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 upstream and downstream of the process. Account-to-account payments, which essentially debit money directly from the buyer and deposit it into the seller’s account, have long been one of these options and are often a much cheaper and direct alternative to card payments and costs they incur. , when someone is not already 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 develop and integrate into new services, both those in the stories physical as well as those that are “electronic”. point of sale”, which could be in a store but could just as well be, for example, an application to pay for time spent in a parking lot.
“But account-to-account is a cheaper process and so we had a huge opportunity to solve this problem, especially in EPOS,” Sokolovas said. Years in the building, Kevin had initially had many naysayers, skeptical of the possibility of creating APIs to integrate with banks, which have traditionally been slow to adopt them and open their services to others. There are of course exceptions, like the open banking efforts we’ve seen in the UK, but overall it’s a fragmented and still murky field. “Now we are the one and only company in the market that has a technical solution behind it.”
There are now other companies getting started – for example, POS terminal giant Worldline is working on a solution to accept account-to-account payments, Tamosiunas said, but that will take years to build. , he said.
The most important theme is that e-commerce remains an important and rapidly growing field, 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 disruption Kevin is looking for here isn’t just opening up and modernizing a process that’s been around for years, but is difficult to use; but it also gives merchants, consumers, and anyone else involved in a transaction a more direct way to activate a particular payment. Being more direct also means it’s cheaper, which is also an important part of the story: it means anyone opting for this option can earn better margins on trades. Conversely, it also excludes from the equation for many traditional players in the payments ecosystem, another type of disruption.
This is what caught the attention of not only investors, but also potential strategic partners and potential acquirers of the startup. The founders wouldn’t go into detail about who knocked on their door, but you can imagine other big payments tech players old and new (including Stripe, Adyen, PayPal and maybe even the major credit card companies) may be among those interested in picking up this technology in a diversification game. For now, Kevin has even refused to work with them as strategic investors, in order to remain neutral and not tied to specific platforms.
“Tadas, Pavel and Kevin’s team are driving the future of payments with their next-generation payment infrastructure,” Luca Bocchio, partner at Accel, noted in a statement. “Offering a fast and seamless payment experience, with reduced costs and increased authentication rates, the time has come for A2A payments and Kevin has already had impressive momentum with his offering. With the launch of his unique product of payment at the point of sale, the opportunity before us is huge and we look forward to partnering with the team on their journey.”
An interesting twist here will be whether and how Kevin and his ilk will be integrated into mobile wallets.
Today, Kevin operates in services where a merchant has integrated their technology into their own point of sale, whether physical or electronic, and into an app. But wallets like Apple Pay or Google Pay today only work with cards. With so many card transactions now being supplanted by NFC-based payments using people’s phones, this could potentially limit Kevin’s growth if he can’t also offer consumers an alternative to paying this way.
Coincidentally, Apple just yesterday was arrested for anti-competitive practices by the EU on how it opens up (or not, as the case may be) its NFC-based wallet technology to other parties. This will be one to watch and it could have a big impact on Kevin’s growth in the future.