Approved as an authorized payment institution: Payment service provider Atoa in open banking sector
Atoa Secures FCA Authorization, Empowering UK Businesses with Cost-Effective Payment Solutions
Atoa, a fintech startup based in the UK, has recently received regulatory approval from the Financial Conduct Authority (FCA) to operate as an Authorised Payment Institution (API). According to Sid Narayanan, co-founder and CEO of Atoa, this is a "game-changing moment" for the company.
With the FCA authorization, Atoa can now serve larger businesses with advanced payment capabilities, as well as smaller businesses (SMEs), offering them a range of benefits. These include lower payment processing costs, improved cash flow, and a greater variety of payment methods, including emerging alternatives like Pay by Bank.
One of the key advantages of Atoa's open banking-powered payment solutions is the significant cost savings they provide. By bypassing card scheme fees, Atoa helps merchants reduce payment processing fees by up to 50%. This is particularly beneficial for businesses processing high volumes, as it eliminates or reduces layered card fees and hidden charges.
Larger businesses with high transaction volumes can also benefit from additional incentives offered by Atoa, supporting scalability without proportional fee increases. Furthermore, Atoa's hybrid payment models combining cards and Pay by Bank lower settlement delays and chargeback occurrences typical with card schemes, enhancing cash flow certainty for all businesses.
Atoa's technology also enables remote or in-person payments without the need for traditional hardware, which can be a significant advantage for SMEs that may lack the investment capacity for expensive POS infrastructure. The company's support for newer payment methods like Pay by Bank and digital wallets caters to mobile-first and tech-savvy customers, which is vital for business competitiveness, especially in SMEs focusing on younger demographics.
Transparency and control are also key aspects of Atoa's service. The company encourages fully itemised billing and monthly statement reviews, helping businesses of all sizes understand their actual payment costs and enabling better financial management.
Since its inception in 2022, Atoa has received financial backing from Valar Ventures, Passion Capital, and Leo Capital. The company will continue to invest in product development and will collaborate with ClearBank to power bulk settlement payouts for enterprise clients using virtual account services.
Jason Drury, general manager at Ponko Cars of Cambridgeshire, is one of the many businesses that have benefited from Atoa's services. Since moving to Atoa, Drury has saved £6,000 a month in payment fees, with up to 96% of payments now going through Atoa.
With the FCA authorization, Atoa can now extend its payment services to various industries, including retail, hospitality, beauty, automotive, and professional services. The company's expansion includes offering a broader range of regulated payment services, such as payment initiation services, virtual account services, and payment account information services.
In summary, Atoa's status as an Authorised Payment Institution empowers UK businesses—from SMEs to large enterprises—to adopt cost-effective, transparent, and flexible payment solutions that improve margins, operational efficiency, and customer satisfaction in a regulated and secure manner.
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