FinTech startup Ryft has raised £1.2m in seed funding for its automated next-day merchant payments system.

The Ryft solution processes payments and then automatically diverts funds to merchants and sub-merchants the next working day, minus any commissions.

The seed fundraise was led by SFC Capital, with further investment coming from the ex-founder of Shutterstock and the founder of LoveFilm.

The London-based company’s payment solution integrates into an online marketplace and accepts payments from all major cards, along with Google and Apple Pay.

Ryft claims that its solution comes without the high fees and protracted wait times for payment, with merchants receiving funds the next working day and Ryft charging a flat fee for each transaction.

The company was founded by Sadra Hosseini and Alex Mackenzie and was inspired by their previous business restaurant ordering app Butlr, which went on to be acquired by OrderPay.

CEO Hosseini said: “We are both incredibly excited to be working with SFC Capital to further our ability to provide seamless support to marketplaces and merchants within the industry and continue to solve the current problems associated with complex money routines under PSD2 regulation.”

Payment Services Directive Two (PSD2) is a piece of legislation designed to force providers of payment services to improve customer authentication processes.

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Ed Stevenson, investment manager at SFC Capital, said: “We are excited to work with Ryft in supporting marketplace businesses with a unified payment platform designed to power B2B platforms and provide a seamless experience for merchants and marketplaces.

“Following the success of their first business, Sadra and Alex have put together the essential aspects to solve the pain points experienced in the business payment platform landscape.”