kevin., the Lithuania-based payments startup, has unveiled a new product that enables customers to start a payment using their card but complete it from their bank account. It claims the ‘first-of-its-kind’ service can save merchants up to 90 per cent on acquiring fees.
The product switches customers from card payments to account-to-account (A2A) payments during the payment flow via a PSD2-based open application programming interface (API).
When the first digits of a card number are entered, kevin. identifies the bank and card type, then gives customers using a debit card the option to switch to A2A payment. It says the A2A option is faster, safer and easier, with payment completed in two fewer steps than typical card payments.
According to kevin., merchants in Europe currently pay more than €10billion in fees annually to card networks for online payments. For each online payment, merchants pay a gateway fee, a transaction processing fee and an interchange fee. They can also wait between three to five days before receiving the payment from the acquiring bank.
“In Europe, up to 80 per cent of all online payments are by debit card,” said Pavel Sokolovas, co-founder and COO of kevin.. “And behind every debit card there’s an account, which means these payments could be made directly from accounts. So we built a product that makes it easier and more appealing for customers to switch from card to A2A payments during the payment flow.
“What’s unique about this new product is that it seamlessly switches the payment method once the customer has chosen to pay by card. At checkout, the customer starts typing their card number. After the first eight digits we can identify the bank and card type.
“If it is a debit card, we then give the customer the option to switch to a bank payment, explaining that this is faster, safer and easier. In fact, our method requires at least two fewer steps than a typical online card payment, with no need to enter the card holder’s name, the expiry date, or the CVV number. With no card and CVV this flow is much safer for the customers.”
Founded in 2018, kevin. has secured €3.4million in funding, including €400,000 in pre-seed investment from Startup Wise Guys and €1.5million in angel investment.
In January, it introduced a PSD2-based solution for payments from pre-linked accounts. Its ambitious plan is to release further PSD2 payments products in 2021, including a POS device.
The startup, supervised by the Bank of Lithuania, is licensed to operate across the EEA. It currently operates in Finland, Sweden, Estonia, Latvia, Lithuania, Poland, Portugal and the Netherlands but wants to offer payment infrastructure to clients in 14 more European markets by 2022.