On Monday, Australian Fintech Zepto announced that it had secured $25 million AUD in a Series A financing round co-led by AirTree Ventures and Decade Partners.
Zepto is a real-time account-to-account merchant payments platform that allows merchants to make, manage as well as receive secure payments by connecting the payer’s and merchant’s bank.
The new payments platform (NPP), Australia’s open-access infrastructure for quick payments, is used by over a 100 Australian organizations such as banks, fintech, credit unions. PayTo, a new NPP digital tools allow merchants and businesses to make real-time payments from customer bank accounts. Where is this leading to?…
In October, Zepto became the first non-bank that received approval to become an NPP-connected institution, providing it with the power to connect its clients directly to the NPP’s PayTo service which will roll imminently by mid-2022.
According to Zepto’s CEO Chris Jewell, “Data-rich, real-time payments, directly between bank accounts are the future of how we transact, and Australian policymakers have acknowledged this with the rollout of NPP’s PayTo, which will replace direct debit in roughly 3-5 years. Merchant and consumer payment preferences are shifting away from expensive legacy payments methods like credit cards and slow, blind traditional direct debit.”
Zepto says it’s had 10 times year-over-year revenue growth since it launched in 2018, even though it failed to issue yardsticks for measuring that growth as well as its valuation. The company added that it carries out transactions worth over $4 billion every month. It says it expects to be processing at least $50 billion in payments.
Zepto’s CEO is of the opinion that there is an entire group of people who would never fancy a credit card talk less of owning one or getting approval for a buy-now-pay-later product. He says banks are everywhere and payments between banks will create a simple, seamless and efficient way to make payments.
Australia’s NPP accounted for 31 percent of account-to-account payments as of October 2021, CEO Chris Jewell said adding that the total cumulative value of NPP payments since its launch in November 2017 stood at about 2.6 billion. Essentially, Zepto’s infrastructure does not require cards that are powered by companies like Visa and Mastercard, Zepto basically takes them out.
Some of Zepto’s clients include Binance Australia, Novatti Group, Nimble, Powerpay, Till Payments, Superhero, etc.
Speaking on the financing, partner at AirTree Ventures James Cameron said that “The global payments landscape is in the middle of its biggest upheaval in decades, as open banking and real-time, bank-to-bank payments are transforming how we pay and get paid. With open banking and the NPP, Australia has found itself at the centre of this disruption – and Zepto is the leading innovator in this space. With companies like Afterpay, Athena and Airwallex, Australia has shown that we punch well above our weight in fintech innovation globally.”
Account-to-account payments will take up at least 20 percent of e-commerce payments and will surpass credit and debit cards by 2023, according to the FIS’s global report for 2020.
With the new funding, Zepto will improve its functionalities on the NPP’s PayTo framework as well as fuel its expansion plans starting with New Zealand. There has been increasing demand for Zepto in New Zealand. After venturing into New Zealand, the company plan is to enter the US.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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