Hardly any other area of the financial market has been so meticulously regulated in terms of freely accessible infrastructure in recent years as European payment transactions. The combination of Payment Service Directives and open banking interfaces brings opportunities for start-ups such as the payment fintech Ivy, which was founded in Munich in 2021 and entered the market with account-to-account (A2A) payments.

„We founders asked ourselves what the minimum requirement is for sending money from A to B, and then developed a tech idea for a connection channel that could make this possible,“ Ferdinand Dabitz, one of the Ivy founders, tells Börsen-Zeitung in an interview.

Ivy quickly found access to venture capital. In mid-2023, only a few weeks after the seed financing, a Series A with Creandum and Valar Ventures, which is part of Peter Thiel's universe, was raised for 20 million dollars. The fact that Thiel was interested is probably due to the recognisably big opportunities of Ivy's business model, which the founders – Joshua Becker, Simon Wimmer and Peter Lieck in addition to Dabitz – have ambitions to implement.

„„We are starting in Europe and are planning a global rollout, including markets such as India and Latin America,“ Dabitz explains. „In Brazil, for example, PIX has an instant payment infrastructure that Ivy can build on. Our big advantage is that we eliminate intermediaries such as credit card networks with account-to-account payments. Our approach gives merchants price advantages.“

What is currently underway is the onboarding of additional Payment Service Providers (PSPs) and large online merchants, which should significantly increase Ivy's reach and processing volume in Europe. More than 100 companies are already using instant payments from Ivy, but Dabitz does not yet want to comment on the specific volumes. In contrast to Klarna CEO Sebastian Siemiatkowski, the Ivy founder is satisfied with the state of the banking APIs that Ivy needs to access accounts. Ivy is connected to more than 90% of banks in the EU, in Germany the rate is even 95%. „The PSD3 implementation is also a very effective element. Benchmarks for API quality will be introduced, namely performance elements that banks must fulfil at a granular level. They will significantly improve interoperability and API connectivity and create transparency.“

Operationally, Ivy has three hubs in Berlin, London and Helsinki. „Basically, we operate a corporate customer business, even if the connection then leads to retail payments, where the retailer saves money as soon as they have integrated our payment solution. As far as we can see at the moment, it takes a developer around four weeks to integrate our technology at their retailer – a PSP has also done it in just a few days. This gives us hope that we can scale quickly," says Dabitz. Ivy's pricing is likely to be much more favourable than that of the credit card companies, which charge 1% to 2% of the value of goods.

In the payment business, the motto is: it's the volume of transactions that counts – and Ivy's lean approach should enable it to charge very low fees. However, with the mandatory introduction of instant payments and associated services such as request-to-pay and account-to-account, banks are also on the starting blocks to score points with merchants.

For the moment, Ivy is fully financed, says Dabitz. However, he can imagine raising additional capital as the company continues its global expansion. Since 2024, Ivy has held a licence as a payment institution through its regulated Finnish subsidiary Ivy Pay Oy and is now active in 28 countries via passporting, with more than 5,000 banks already connected via an interface. Ivy recently hired a compliance expert, Sascha Bross, from the business account specialist Holvi. As Managing Director of the Helsinki-based Ivy subsidiary, Bross will cover the regulatory side in Europe.