Fintech
Adfin wants to solve the problem of bill payments for traders and small businesses
Encounter Advertisementa new UK-based fintech startup that wants to help businesses get their invoices paid, no matter what. Founded by two fintech experts, the company takes a problem and builds a product around it. The problem is that it’s still difficult to get paid if you’re set up as a sole trader or even a small business that doesn’t have a dedicated admin person.
The process of paying for work for small businesses and sole proprietors like lawyers, accountants, consultants, craftsmen, and so on typically involves sending the client an invoice with your banking information. But you also have to track incoming payments and reconcile them to make sure you’ve received the money. Add to that, it’s not the best experience for your clients.
For regular customers, you can try setting up a direct debit. But it can be difficult for these types of businesses to convince their customers to let them withdraw money directly from their bank account. As for card payments, they often come with high processing fees.
“The average consumer makes only 21 e-commerce purchases a year,” Adfin co-founder and CEO Tom Pope (pictured left) told TechCrunch. He previously worked at Tink, the open banking startup that was acquired by Visa“All the hype has been around e-commerce, but for the average law or accounting firm, payments are stuck in the 1990s: bank transfers, card payments over the phone, really high fees.”
Adfin argues that sole traders and small businesses don’t necessarily want to think about the most appropriate payment method. Instead, they just want to get paid and move on. Essentially, the startup is creating an invoice management platform and a payment platform to simplify critical administration and make getting paid less of a headache.
After uploading invoices to Adfin, customers can use the platform to send payment requests via email, WhatsApp or SMS.
Adfin then automatically decides which payment method to display, depending on various factors, such as whether it is a returning customer, a small invoice, etc. The company supports payment by bank via open banking and card payments, including Apple Pay and Google Pay. If the customer does not pay immediately, Adfin also automates sending reminders.
“Our customers are not payment nerds. They don’t have to be. And I think the fact that they’re not payment nerds has probably led to them being a little bit exploited, if I’m honest,” Pope said.
“With Adfin, we only offer you payments. We charge you and we will take care of the payment mix. And of course, it is in our interest to try to get your success rate as high as possible and your costs as low as possible,” he added.
Since Adfin acts as a central repository for all invoices, businesses can check all outstanding invoices and see if they have been paid or not. Adfin currently charges 1% per payment. It does not matter what payment method was used; it will always be 1%.
“As a merchant, everyone wants to get paid as quickly as possible, as cheaply as possible, and with the least amount of effort on your part,” Adfin co-founder and CTO Ciprian Diaconasu (pictured right) told TechCrunch. He previously spent 12 years working for Mamboa cloud-based banking platform. “So it’s a bunch of capabilities that we’re building that just maximize the time you get paid and minimize the cost of getting paid.”
The startup has already raised $4.9 million in seed funding, co-led by Index Ventures and Visionaries Club. Several angel investors also participated in the round, including Thijn Lamers (founding team of Adyen); Guillaume Pousaz (founder of Checkout.com); Eugene Danilkis (co-founder of Mambu); Ferdinand Meyer (co-founder of Moss); David de Picciotto (co-founder of Pledge); Maximilian Eber and Maik Wehmeyer (co-founders of Taktile); and Josef Bovet (co-founder of Tiller).