Lopay Secures £6M in Seed Funding, Challenges Established Payment Providers

Lopay, a British start-up in the payments sector, has secured £6m in seed funding from prominent venture capitalists, including BackedVC and Portage. The company, which was founded by industry executive Richard Carter, is positioning itself as a cheaper, more efficient alternative to established payment providers like SumUp, PayPal, and Zettle.

A Cheaper Alternative for SMEs

Lopay has gained traction among small businesses, with over 20,000 SMEs signed up to use its service. The start-up enables businesses to take card payments from customers more cheaply than its more established competitors. Lopay claims its fees are less than a third of those charged by PayPal and half of those by SumUp and Zettle. Moreover, it gives customers the option to receive cleared funds in their accounts immediately after each transaction.

Since its launch last year, Lopay has processed nearly 10 million customer payments. The company estimates its pricing model has saved its customers more than £1 million in aggregate fees. In the upcoming year, Lopay aims to process another £500 million in payments, potentially saving its customers over £2.5 million.

Advocating for Small Businesses

Lopay’s founder, Richard Carter, has expressed concern over the plight of small businesses and sole traders who face the dual challenges of high inflation and fragile customer demand. He criticises the established names in the payment industry for their high fees, which he claims can cause small businesses to pay up to 300% more than necessary or wait up to three business days to receive card payments.

A Significant Funding Round Amid a Challenging Environment

The £6m seed funding round stands out as substantial in comparison to most other seed funding rounds. This is especially true given the current challenging environment for early-stage companies to secure new capital. Juliette Souliman, a principal at Portage, praised Lopay for “breaking new ground in the archaic mobile POS payment industry,” and saving small businesses time and money as they navigate the post-pandemic business landscape.