Welcome to the first in our Innovators series; dedicated to the businesses and founders changing the shape of the financial landscape with bold-thinking and revolutionary concepts.

SumUp is one of Europe’s fastest growing start-ups. So we wanted to get inside the mind of the people behind the company to see how they are changing the game and working with Starling Banking Services to do more for their customers.

The artisan selling gelato from his wooden cart, the painter selling her latest designs on a street market, the village church making their collection. They may not seem to have much in common but they all have traditionally relied on people parting with cash.

From Roman times to the 21st century, coins and cash have been standard currency. But now in a digital world, things have moved on. Walk into many shops and bars now and they will assume you will be paying by card or using a mobile payment.

Yet there is a card acceptance gap. 10% of any population are engaged in economic activity and, have a need to accept card payments but typically only 1% do because they have not been well served by traditional payment providers. Back in 2011, a group of payments industry experts, investors and entrepreneurs recognised the challenges small merchants, in particular, were facing and founded the mobile point-of-sale company SumUp.

The company, which allows merchants to take card payments using the company’s proprietary card readers, now has a presence in 31 countries, employing more than 1,500 people. It is backed by BBVA, Groupon, Holtzbrinck Ventures and other well-known venture capital investors and has attracted over half a billion euro in funding.

Enabling small companies to take card payments

SumUp is empowering small to medium-sized enterprises (SMEs).

“Card acceptance has been burdensome and expensive, especially for small businesses,” says Dimitri Gugunava, Vice President for Banking and Acquiring at SumUp. “Small businesses find maintained card terminals prohibitive. SumUp was created with a vision to empower the everyday heroes who start up their own businesses to accept card payments.”

Dimitri says, “Merchants are starting to realise that accepting card payments can be faster and cheaper than cash. You don’t have to offer change and you can cut the administrative costs. On top of that, consumers are starting to prefer contactless, whether that means physical card or mobile wallets like Apple Pay or Google Pay.”

“Our business model is to provide a better alternative to accepting cash and we try to build a solution around simplicity. Traditional providers used to provide lengthy SME contracts with fixed fees, full of asterisks, and it required a degree in data science to predict true costs. With SumUp you pay once for the terminal - e.g £29- and then there is a transparent transaction fee - e.g 1.69%.” This is cheaper than current point-of-sale competitors on the UK market, and offers the advantage for merchants of not being tied to traditional bank-based accounts.”

Millions of small businesses can benefit

The company thinks there is substantial potential for growth, particularly in Europe.

“We have one and a half million active merchants worldwide, but in Europe there are 25 million small to medium-sized businesses that could potentially offer card acceptance,” Dimitri says.

The company uses digital marketing channels, such as YouTube, Google and Facebook, for customer acquisition and has also targeted out of home advertising and TV. Word of mouth between SMEs is also vital.

“We have a high net promoter score of around 70 which is very difficult to achieve in tech and the financial services,” he says.

Dimitri believes that one of SumUp’s biggest advantages over others in the fintech space is its in-house hardware capability. “We design readers in-house with a dedicated team. We believe it is better to be in the driving seat rather than waiting for innovation. This allows us to keep costs low and make sure our hardware works smoothly with our application,” he says.

In 2018, the company launched a standalone, SumUp 3G, a terminal that connects directly to a SIM card, eliminating the need for a phone. This is targeted at specific merchant category codes – a waiter in a restaurant can easily use a standalone reader in one hand and have the other free to carry plates.

Working with Starling Bank

SumUp works in partnership with Starling Bank to make sure merchants get paid quickly.

“When we were looking for a provider, we were looking for someone who was committed to empowering their customers,” says Dimitri. “It is a good alliance. Both organisations are very client-centric. Starling is committed to making payments as easy as possible and set this as an expectation for customers. If we want to compete with cash as a company then we need to provide faster payments to our merchants. Ideally, we would like to really accelerate the pay-out to our merchants.”

SumUp has a vision of becoming a one-stop-shop for SMEs around the world. As well as card acceptance, the company has also acquired the Danish invoicing software platform Debitoor and online e-commerce platform Shoplo.

Dimitri says: “We’re witnessing a great period of change in payments and SumUp thrives in these times as it is an agile organisation.”

Traditional banking providers and existing card rails means the process of settlement for small businesses currently requires a waiting time of two to four days for payments to clear through. By using Starling Banking Services, SumUp can now ensure their UK merchants will soon receive payments on the next business day and do not need to wait days to see the money that customers have paid them for their products and services.

Starling’s Banking Services does this by allowing SumUp’s merchants to benefit from:

  • Real-time access to faster payments
  • Simple integration with Starling’s secure and PSD2-compliant APIs
  • Full bank grade accounts with a set of unique virtual accounts

Learn more about Starling Banking Services.

Get to know: Marc-Alexander Christ, co-founder, SumUp

Career: Marc-Alexander began his career in investment banking at European Investors in New York before moving on to become Vice President at J.P. Morgan in London and Frankfurt. He was one of the co-founders of online fashion gallery MIOSATO and also worked for Groupon-CityDeal in its early days.

Advice: “My favourite book is The hard thing about hard things by Ben Horowitz,” says Marc-Alexander. “My best advice for others is ’When you have an idea, tell as many people as you can; listen carefully and use the advice as you see fit.’”

Interests: Marc-Alexander runs triathlons and paints in his spare time.

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