UK payments FinTech Atoa, a rapidly emerging player set to challenge the status quo in the traditional finance sector, has bagged $6.5m.

This innovative startup seeks to disrupt the conventional methods of card payments prevalent in the high-street retail business.

The round was led by Valar Ventures, a US fund well known for its backing from Peter Thiel, the co-founder of PayPal. Other noteworthy contributors included Passion Capital, known for their previous investment in Monzo and Tide, and Singapore-based Leo Capital, which carries significant experience with alternative card models in India and Asia.

At its core, Atoa provides small to medium-sized retail businesses with a fairer, faster, cheaper and more secure alternative to accepting card payments. Its primary solution is account-to-account payments, a mechanism which aligns with the ‘Axe the Card Tax’ campaign’s goal to reduce the high card fees imposed by giants like Visa and Mastercard.

This newly acquired funding will be used to further Atoa’s ambitious objective. It aims to offer relief to UK SMBs, which have been hit hard by unfavourable economic conditions, the pandemic, and consistent rises in inflation. Atoa claims that card programmes like Visa and Mastercard operate with profit margins as high as 67% and 75% respectively and states that the cost of payments has surged by up to 44% since 2016, according to the Coalition for a Digital Economy (COADEC).

The firm is challenging the payment giants by enabling consumers to pay in-store via an instant bank transfer, bypassing the ‘obsolete payment stacks’. This eliminates the need for customers to download any additional mobile apps and allows them to approve payments via their existing banking apps, resulting in a seamless payment experience. Atoa boasts that this strategy can save merchants up to 70% on transactions.

Since its launch in June 2022, Atoa has reported an impressive 60% month-on-month growth in processed payments. With the total funds now amounting to $8.6m, Atoa is geared up to continue targeting in-person SME payments and accelerate its growth trajectory.