Atoa Raises $2.2M To Compete With Visa And Mastercard

Atoa Payments, a UK business that offers retailers an alternative to debit card payments by using open banking, has acquired $2.2 million in pre-seed investment.

Leo Capital and Passion Capital lead the round, with angel investors like GoCardless co-founder Matt Robinson also participating.

Atoa contends that Mastercard and Visa payment rails have an effective duopoly on the market, which allows them to get away with net margins as high as 51% at the cost of small retailers and their consumers.

The firm seeks to circumvent the card giants by encouraging companies to download the Atoa app and link their merchant bank accounts. Merchants may take payments by SMS, Pay-by-Link, and QR code after a five-minute setup process.

The customer scans the QR code or clicks the link, picks their bank, and takes them to their bank’s app to authorise the payment.

Atoa claims their technology reduces the cost of collecting payments by as much as 70% and enables fast payment, as opposed to the typical one to two days for debit cards.

Sid Narayanan, the co-founder of Atoa, explains that at a time of record inflation and in the middle of a cost-of-living crisis, the UK’s small and medium merchants are struggling to limit expenses, deliver excellent customer service, and preserve profit margins.

“Atoa is here to empower merchants and to improve their cash flow and bottom line.”