Instant payment startup Lopay has secured £6 million in seed funding after signing up more than 20,000 small businesses in 18 months.

Founded in January 2022 by Richard Carter, the app enables small businesses to take card payments from their customers, with almost 10 million payments made using the platform to date.

Lopay users also have the option to receive cleared funds into their bank account the instant a transaction is made. It claims that its fees are less than a third of those charged by PayPal and half those levied by SumUp and Zettle.

Lopay estimates that its competitive pricing has saved merchants more than £1m in card fees since launch. The company expects to process a further £500m in card payments in the next 12 months, saving its customers as much as £2.6m in fees.

The funding comes from BackedVC, Portage, The Venture Collective and a series of high-profile angel investors.

“Lopay’s mission has resonated with thousands of small businesses and sole traders who are being squeezed simultaneously by high inflation and fragile customer demand,” said Carter.

“Against that backdrop, the big beasts of the card payment industry have been poor champions of small business. Their high fees mean too many small firms are paying up to 300% more than they need to – or waiting up to three business days – to receive card payments from their customers.

“By contrast, Lopay’s easy-to-use app and card reader give small businesses an instant way to save money on every sale they make. More than 20,000 firms have already found that switching to Lopay is a small step that makes a big difference to their bottom line, and that’s why several of the UK’s leading industry bodies have chosen to partner with us.

“Since launch we’ve focused on building robust financial architecture and hiring a talented, committed team. With this solid platform for growth, we’re now ready to scale – and we’ll be using this major injection of seed capital to launch internationally and develop new products that save small businesses even more money.”

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Juliette Souliman, principal at Portage, added: “Lopay is breaking new ground in the archaic mobile POS payment industry, saving thousands of small businesses time and money as they navigate the post-pandemic business landscape. 

“We are proud to co-lead Lopay’s seed funding round alongside Backed VC as they continue to take on the industry’s biggest players. Lopay’s founder, Richard Carter, is a forward-thinking leader, and we are thrilled to support him and the team.” 

Caitlin Herling, Investor at The Venture Collective, added: “Lopay’s mission to empower SMEs through low cost processing, settlement flexibility and rewards aligns deeply with our human empowerment thesis.

“Strong demand for their product among this underserved customer set, combined with their exciting product development pipeline and an exceptional team, made us thrilled to support Lopay as they become the go-to solution for small businesses.”

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