SumUp is a good example of a fintech that thinks forward. They have multiple services for small and medium-sized companies. From payments and processing orders to customer acquisition and money management – SumUp got you covered. Take a look at our company highlight.

Fintech highlight is our newest cyclical publication. We present, discuss, and recommend solutions that are interesting from the market and the client’s point of view. The goal is to give you a better field overview.

What is SumUp?

SumUp is a global fintech company with headquarters in London, U.K. It serves over 4 million businesses in over 30 markets around the world. Focusing on nano, micro, and small ventures, it attracted merchants like bakeries, barbers, dentists, etc. 

SumUp offers a range of financial services like payment solutions, card readers, etc. Its mission is to assist entrepreneurs in day-to-day business operations, and make them smoother, so that specialists can focus on actual work, instead of taking care of business.

What sets SumUp apart is the philosophy behind software. The simplicity is probably best described with the setup process that is quick and straightforward. There are no lengthy contracts to sign. 

More so, an owner can sign up online and receive the Card Reader in days. With attractive transaction fees and transparent pricing plans, merchants can easily understand and manage their business operations.

The company’s success can be linked to its customer-centric approach and commitment to making it all as simple as possible. The educational aspects count as well. The company provides dedicated customer support and assists merchants with technical issues that may come up. 

Resources and educational materials help small businesses squeeze the most of SumUp’s payment solutions. That includes access to analytics and reporting tools, that provide insights into transaction data. 

The origin story – who built the company?

The company was founded in 2012 by Daniel Klein, Jan Deepen, Marc-Alexander Christ, and Stefan Jeschonnek. They have recognized the need for affordable and user-friendly payment solutions that can empower small business owners.

The idea behind SumUp is pretty simple. All began with personal experiences and market observations. Which in its own right, is a pretty typical story behind any truly successful business. Founders noticed that small businesses were often under the thumb of traditional point-of-sale (PoS) systems. With the high costs and complexities that came along with it, many owners were thrown back by the payment processors, fees, etc. Plus, the lack of proper infrastructure prohibited owners from even accepting card payments.

After thinking about these issues, the founders focused on creating payment solutions that would ease the process of accepting card payments. The aim was to enable small companies to use them, regardless of the business’ size or technical expertise within the firm.

By doing the research and understanding pain points, the founders were able to analyze market trends and link them with existing technologies. The result was a user-friendly approach and cost-effective business model.

Founders created SumUp with a focus on a portable card reader. It wirelessly connects to a smartphone or a tablet and turns it into a fully functional PoS system. That way merchants and accept card payments virtually anytime and anywhere.

The business went through multiple funding rounds, with the recent one in December 2023. SumUp has raised €285M in a funding round led by Sixth Street Growth. The funding, with participants like Bain Capital Tech Opportunities, brings the total to over €2.28 billion, following an €8B valuation.

The business model and revenue streams

The business model of SumUp includes:

  • Transaction fees. Since the company operates in many markets and internationally, final fees vary. They take the form of a percentage of the transaction value and the type of card used in a sale (debit or credit). 
  • Hardware and software sales. SumUp sales card readers that connect wirelessly to smartphones or tablets, enabling small businesses to accept card payments.
  • Subscription services. The company introduced the “SumUp Plus” subscription plan, with additional benefits. That includes lower transaction fees and priority customer support. This is an additional incentive for merchants to choose these plans, generating stable revenue for SumUp.
  • Value-added services. To complement standard services, the company offers online payment capabilities, invoicing tools, integrations with popular e-commerce platforms, and the ability to accept payments through different channels.

Revenue streams include:

  • Hardware sales. Merchants can purchase the card readers directly from SumUp (also online) or from authorized resellers.
  • Transaction fees. Each payment processed by the platform adds to recurring revenue for the solution holders.
  • Currency conversion rates. When a payment is made in a foreign currency, SumUp converts it to the merchant’s local currency and charges a fee for the currency conversion.
  • Cross-selling and upselling. SumUp sells additional hardware accessories such as tablet stands, cash drawers, or receipt printers. The company has a healthy mix of one-time sales revenue from hardware, transaction-based revenue from processing fees, earnings from subscription services, and additional revenue streams from value-added services and partnerships.

Summing up the SumUp

The company is an interesting solution for every small business owner out there. Retailers can benefit from instant and simple customer-centricity offerings, giving them a chance to easily and quickly sell their products and services.

This would not be possible without great custom software development. Every time founders build something new and exciting, they know a team of talented engineers must back them up. That’s why great ideas go hand in hand with product discovery and product design journey.

Only then you’ll have a digital solution that tastes great. Here at Code & Pepper, we know a thing or two about this process.