Volt Builds Global Payments Network To Take On Visa And Mastercard

Fintech start-up Volt says a new deal in Australia underlines its determination to take on Visa and Mastercard by disrupting the global payments industry. The British company, founded in 2019, has signed an agreement to integrate with PayTo, the Australian digital payments platform; the move marks Volt’s second foray outside the UK and Europe, following a similar tie-up in Brazil in 2021.

The company is fast becoming one of the UK’s most closely watched fintechs, having raised $60 million of funding last year in a series B round led by IVP, the Silicon Valley venture capitalist that has previously worked with technology sector star turns ranging from Klarna to Slack.

“We are building a single real-time payments network for the world,” says CEO Tom Greenwood, who co-founded the business with Steffen Vollert and Jordan Lawrence. “We’re going around the world to connect up payments networks and enable standardisation and interoperability.”

Volt was inspired by the emergence of the open banking regime in Europe in recent years, which has seen regulators require banks to provide third parties with direct links to customers’ accounts, assuming those customers give permission. The shift has given rise to a range of opportunities, but Volt believes account-to-account payments are among the most exciting of these.

Currently, when customers pay for a product or service using a debit or credit card, the transaction requires the involvement of multiple parties, Volt points out, including the banks of the customer and the merchant, an acquirer, a payments processor and a fraud specialist. The result is that transactions can take days or even weeks to complete and carry significant fees.

“If you were designing a payments system today, rather than when Visa and Mastercard were introducing card payments, this is how you would do it,” Greenwood argues. “It’s really just about using the technology of the 2020s rather than the 1950s.”

The shift to open banking in Europe is mirrored by similar developments in markets worldwide, including North America and Asia. And in many developing markets, where payments systems have taken shape more recently, account-to-account systems are standard. In all, there are now 74 countries worldwide that have real-time payments arrangements in place.

However, says Greenwood, there is a problem. “The irony in the globalised marketplace of today is that the payments sector is becoming more fragmented,” he explains. “Governments and regulators increasingly see payments as critical infrastructure and they’re determined to exert some controls; as a result, every country with an account-to-account payments system has its own standards and methodologies.”

Volt therefore sees its mission as to link up these systems. By pursuing agreements with network operators in each individual country, it can provide a single point of access for merchants anywhere in the world, facilitating cross-border trade. A merchant in the UK selling to Brazil, for example, can avoid high transaction charges and get paid instantly.

Volt’s Australia deal expands the number of territories where it can offer this single point of connection to 30 territories worldwide. That increases its appeal to its target customers – merchants looking to transact more cheaply and efficiently, as well as to other players in the payment space, which white label its services.

Part of the challenge, says Greenwood, is to convert customers to the idea of account-to-account payments. Merchants must be convinced that their customers won’t be put off by being asked to pay in this way rather than through conventional card transactions. In this context, Volt has had particular success with merchants selling digital goods and services – online brokers, for example – and with those in high-ticket sectors such as automotive, travel and luxury goods.

Roshan Odhavji, CEO of Megatix, the online ticketing platform that is the first Australian merchant to sign up to Volt, says there are benefits both for his business and for its customers, who can now choose “Instant Bank Transfer” as a payment option at the check-out.

“We’re now able to offer a slick check-out experience and be the first in the market to do so,” he says. “Thanks to open banking and Volt’s technology, we’re able to improve the payments process immeasurably for our customers.”

Volt’s goals now are to expand the number of countries with whom its technology connects and to increase its customer base. Revenues over the past year have been increasing at a rate of 12% month-on-month, underlining the company’s high-growth potential.

Investors, inevitably, have taken note. Last year’s fundraising took the total amount of capital raised by the company to $82.5 million.

“As more than 70 countries, including the US, transition to real-time payments systems, merchants are experiencing the immense benefits of instant, secure, and cost-effective account-to-account payments," said Angela Zhu, a partner at IVP, at the time of last year’s investment: “With the value of account-to-account payments in e-commerce transactions set to reach $757 billion by 2026, Volt is well positioned to redefine the future of payments on a global scale.”