Lithuanian fintech Kevin has launched the first-ever PSD2 payments solution for mobile payments from pre-linked bank accounts and has raised €1.5 million in seed funding to scale into new markets.
Kevin, which has now raised a total of €3.4 million, operates in addition to its native Lithuania across the Baltics, Poland, the Netherlands and Portugal. In 2021, it plans to enter 15 more European markets.
Kevin said its solution, which enables merchants to accept payments directly from bank accounts via an API for services like parking, taxis, car-sharing, deliveries and insurance, is the first time EU’s open banking regulation PSD2 has been used to directly compete with card networks for this type of payment.
PSD2 has so far failed to move beyond e-commerce to areas of traditional card network dominance, such as mobile payments for services like parking, deliveries or mobility.
Payment initiation using PSD2 still requires several authentication steps, but thanks to Kevin’s infrastructure consumers can expect payments for these services to be handled in the same convenient way as cards.
“Requiring authentication every time a customer makes a €2 parking payment is not competitive, so service providers stick to cards, but there’s a downside. With a typical flat charge per payment of €0.07, plus an additional charge of around 1%, companies providing low-priced services like parking can end up paying up to 10% to card networks per payment,” said Tadas Tamošiūnas, Chief Executive at Kevin.
Kevin’s PSD2-based solution enables companies to receive mobile app payments directly from pre-linked bank accounts, enabling companies to cut the cost per transaction up to 10 times from the fees of card networks.
“Kevin lets users and merchants treat bank accounts like credit cards. Our new solution enables seamless, instant transactions that don’t need to be authorised every time service, like getting a ride on a ride-hailing app, is ordered,” said Tamošiūnas.