seed financing. The round was led by Force Over Mass, with participation from previous financiers Backed and Acrew Capital, along with a number of high-net-worth individuals, such as Paul Forster (co-founder of Indeed.com).
It brings the overall raised by the U.K. startup to ₤ 5.35 million, including some investment from Banked’s creators, who all formerly interacted at 10x Future Technologies, the banking start-up co-founded by previous Barclays CEO Antony Jenkins.
Founded in January 2018 and leaving beta last month, Banked has actually built account-to-account payment software application that lets banks, businesses and consumers procedure payments significantly less expensive than older payment approaches, such as card payments. By using open banking/PSD2 to initiate payments taken straight from a payee’s bank account, the fintech has the ability to charge simply 0.1% to process payments– “a portion of the 1-4% charge generally seen across the marketplace,” the business says– and cash is moved in near real-time, instead of in some instances having to wait days.
In addition to cost savings and increased speed, the other benefit of constructing a payments network on top of open banking is that it has the possible to dramatically decrease fraud by a declared 96% and for that reason “much better protects companies and customers.” That’s since money is moved without a customer having to share their card or bank details. Rather, authentication is managed by the customer’s bank by means of open banking APIs and generally in combination with its consumer-facing mobile app or site.
“The present payment system is old-fashioned, sluggish and pricey,” Banked co-founder and CEO Brad Goodall informs me. “Business wait days, in some cases weeks to be paid and are taxed with high costs for the privilege. Banked transacts in genuine time, sending funds directly from the client’s checking account to the company’s bank account and charges a single low cost of 0.1%.”
In some aspects, Goodall says Banked resembles Finix in the U.S. by providing business the chance to conserve large quantities in payment processing costs. “Nevertheless, while Finix insert themselves into the payment chain and after that recycles the earnings back to their customers, we merely do not charge those charges in the first location,” he discusses.
With that said, Goodall describes the essential challenge as providing completion customer with a new payment alternative– and luring them to utilize it– “without them really knowing Banked exists.” To do this, the fintech is “empowering” merchants to initiate payment and in turn is leveraging completion consumer’s trusted relationship with their bank and the merchant. “Completion customer does not always believe the payments system is broken,” he yields. “However, business are sharing the benefit [of lower processing charges and less fraud] with their customers to incentivise them to utilize us or promoting us as their favored payment partner upfront.”
As it exists today, Goodall says Banked works best for companies where cash flow and high processing payment costs can be make or break the business. Use cases cover top-up wallets and trading apps to automobile funding and even charities, “where every cent counts.” The fintech is likewise working with e-commerce service providers who are seeking to use Banked for high-value deals and embedding commitment into the payment circulation.
Longer term, Banked wants to surpass simply payment initiation, with a vision where “security, real-time settlement and the reduction of fees eventually to absolutely no is the beginning point.”
“The future has to do with what features and experience at checkout we can create and curate for consumers and merchants,” states Goodall. “We are delighted by the work banks are doing to open their facilities to managed third parties and believe we have a role to play to get in and disperse this infrastructure into business relationships with banks to support them helping their consumers at point of checkout. We also think in developing the collaborations around commitment, insurance and other checkout functions that work to the merchant and consumer.”
Asked who Banked most directly completes with, Goodall does not mince his words. “Visa and Mastercard, easy and plain,” he says. “They have scale, trust and a great deal of money,  we have a better item at a fraction of the expense, quicker and more safe and secure.”
In addition, Goodall says Banked isn’t beholden to a legacy company model or a commitment to offer and promote pre-online items. “In the future, we believe the concept of utilizing a 16-digit plastic card will be as alien as writing a cheque,” adds the Banked CEO.
Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.