New fintech payment system set to save merchants millions
The independent processing network, which is also known as The Company, debuted the new software platform which it is hoped will save merchants up to AU$500m a year in fees, when completely implemented across Australia.
An estimated 70% of all card payments in Australia are via debit, hence the significant annual savings.
The least cost routing (LCR) technology produces the cheapest debit card routing options for customers. The payments is “uniquely flagged” as a debit card payment, and automatically sent via eftpos to the lowest cost debit network, thus cutting fees for merchants.
DataMesh, which was founded in 2014, focusses on updating and improving “outdated backbone payment systems”. The fintech is known for developing solutions that streamline current payment processes for merchants by developing state-of-the-art, integrated software.
The DataMesh software can operate via multiple payment devices such as cards, mobile phones or smart watches, and it can discriminate between credit card and debit transactions. The Company is one of the first fintechs to have invented an automated LCR system on a chip and pin payment.
The DataMesh software can also be installed on current hardware, which means merchants can use their existing equipment and simply need to upload it to their machines.
“The unique least cost routing capability developed by DataMesh is a massive win for Australian merchants, especially in this era of contactless payments,” explained DataMesh Group CEO, Mark Nagy.
He continued; “eftpos’ debit card network accounted for more than two billion cheque and savings transactions in 2019 worth around $130bn. DataMesh is working with eftpos and other payments industry members in the push for least cost routing, and to bring down fees for merchants in what is a very challenging environment for retailers and consumers.”
Nagy explained that implementing the software nationwide did not present any major challenges. “DataMesh LCR software is compatible with many legacy merchant terminals and most acquirers. We estimate more than half of card terminals in Australia are currently unable to fully support LCR, so our technology provides an effective solution and removes the need for acquirers to undertake costly hardware upgrades.”
He added, “DataMesh LCR software is compatible with many legacy merchant terminals and most acquirers. We estimate more than half of card terminals in Australia are currently unable to fully support LCR, so our technology provides an effective solution and removes the need for acquirers to undertake costly hardware upgrades.”
Payment startup Mollie raises US$800m at a $6.5bn valuation
Mollie, one of the fastest-growing payment processors within Europe, today announced it has raised US$800m in a Series C funding round, now valuing the company at $6.5bn. The valuation, based on Dealroom data, makes Mollie the third most valuable privately-held European fintech behind Klarna and Checkout.com.
Blackstone Growth (BXG), Blackstone’s growth equity investing business, led the investment and included participation from EQT Growth, General Atlantic, HMI Capital and Alkeon Capital. TCV who led the Series B investment in September 2020 also participated in the funding round.
According to the company, the funding will fuel Mollie’s international expansion, team scaling, and continued investment in product and engineering.
“There’s something very special about Mollie. In the three months since I joined the team we’ve achieved so much: making preparations for a full launch in the UK, driving 600% growth in Germany and hiring an impressive set of team members and executives,” said Shane Happach, CEO, Mollie. “Over the past months, Mollie has been receiving a remarkable amount of interest from some of the world’s foremost fintech investors. In bringing on BXG, we believe we have an investor who can help Mollie in our next phase of growth. The involvement of our new group of investors demonstrates confidence in Mollie’s growth, strategy and product set.”
The Amsterdam-based business was launched in 2004, and is one of the largest PSPs in Europe. Today, it serves more than 120,000 monthly active merchants of all sizes across the continent. During 2020, Mollie processed more than 10 billion Euros in transactions and is on track to handle more than 20 billion Euros during 2021.
“Mollie is one of Europe’s most exciting high-growth businesses and is at the forefront of enabling next-generation payments for online SMEs across Europe. We are excited to partner with Mollie’s fantastic team and look forward to leveraging Blackstone’s capital, expertise and global network to unlock the company’s next phase of growth,” said Paul Morrissey, who leads European investing for Blackstone Growth. “This investment underlines Blackstone’s confidence in Europe as a place for high-growth companies to thrive.”
In Europe, FinTech app usage grew by 72% directly after the pandemic outbreak, while the top seven digital banks in the US grew their cumulative user base by 39% throughout the year. Competition in payments has grown over the past few years with fintech players like Stripe, Square and Netherlands-based Adyen all competing for a bigger share of the market.
Unlike its American rivals, Mollie says it mainly focuses on transactions with small businesses in Europe. Shane Happach, CEO of Mollie said: “A lot of the bigger players in online payments come out of the US, like PayPal,”. Adding that even Visa and Mastercard are US companies.
“A lot of investors don’t have a bet on Europe,” Happach said. “Mollie’s one of those unique assets that offers exposure.