Lithuanian fintech startup kevin. has launched a mobile payments solution designed to take on traditional card networks that will see smartphone users pay with their phones via pre-linked bank accounts.
The company is particularly targeting everyday transactions for smaller amounts
such as parking and food deliveries, where compared to plastic, card fees often make small purchases more expensive than they need to be.
The kevin. concept lets merchants accept payments directly from bank accounts via an API, which the company claims is the first time PSD2 has been used in direct competition with card networks. Baltic car parking company UniPark illustrates the potential for the new mobile payment service. It uses kevin.’s payment solution for in-app transactions and has seen an average reduction of 80% less for acquiring services.
The new system is based around an open banking API and PSD2, the more secure European regulation for electronic payment services. With €1.5 million in seed funding secured to push the project forwards, kevin. is now planning to expand on its initial idea over the coming months.
Currently, kevin. is best known for its open banking payments infrastructure, which is most prevalent across the Baltics, Poland, the Netherlands and Portugal. With the additional investment kevin. has ambitious plans to move into 15 new European markets this year.
Quick, simple and cost-effective mobile payments could soon become a realistic alternative to traditional card networks, especially for one-time e-commerce transactions. Although the PSD2 system requires several authentication steps, the infrastructure developed by kevin. aims to offer the same level of convenience offered by plastic cards. Indeed, once customers have linked their account to a service provider’s app there’s no need for authentication for every transaction.
Pavel Sokolovas, Co-Founder and COO at kevin. said: “This is the first time PSD2 has been used in the same way as a payment card for these kinds of transactions. Our focus from the very beginning was to build infrastructure using open banking to take on the card networks where they are traditionally strong.
This is a first step, and shows that it is possible to use PSD2 not just for online payments, but also in sectors that currently depend on expensive acquiring methods. While we are taking on the card networks, we are also gaining their recognition – we recently won the Mastercard Lighthouse program in the Baltics.”
With the funding in place, kevin. plans further product development with a POS solution also said to be in the pipeline.