GoCardless is Planning to Enter Sweden

After successfully giving card companies a run for their money in the UK, GoCardless is planning to expand its service to Sweden.

Unless you are paying your monthly utility bill, sending or receiving small amounts can be very expensive. Most consumers do not understand it, or even aware of it, that all retailers accepting major brand credit cards are paying on average a 2% fee to the card issuer in order to facilitate the cashless transaction.

GoCardless was founded by three Oxford graduates who wanted to disrupt billion dollar business model of Visa and MasterCard by offering a simple payment solution that doesn’t cost an arm and a leg to use. GoCardless’ pricing starts with 1% of the transaction value up to $2, and that’s all users and merchants end up paying regardless of the total amount beyond $200.

The low transaction fees of GoCardless were made possible by a simple idea of gathering all payments from merchants into a single direct debit account and disbursing it later. Commenting on the business model co-founder of GoCardless, Duncan Barrigan, said that “[they] solve that problem by aggregating direct debits from lots of smaller merchants, so the payments go through us and we set up the autogiro. The merchants don’t have to deal with the banks to our service.”

However, GoCardless do not consider credit card companies as their direct competition as the bulk of the merchants using their service usually has recurring customers. Meaning, GoCardless is effectively targeting merchants who send out recurring subscription based bill to customers.

After the company was founded, in 2011, Y Combinator picked them up and GoCardless later received investment from Accel and Balderton. Currently, GoCardless is processing around $500 million worth of annual payments.

GoCardless saw huge initial success in the UK as reputed companies like The Guardian and Financial Times started using their service to bill customers. So far, GoCardless has not disclosed their potential clients in Sweden, but Duncan Barrigan recently said in an interview that he cannot “name any names” but he would prefer “companies with an international mindset” as users of his cost effective service.

GoCardless is currently advertising job openings for a country leader in Sweden on their website.