Australia's Waave raises $4.7 million for use in promoting its pay by bank technology

Waave, an Australian open banking startup, has raised $4.7 million in its seed round. The funding round was backed by prominent investors like Paul Greenberg and Menulog’s Morten Belling. The amount will be helpful in promoting its pay by bank system as an apt alternative to the conventional credit card.

According to Waave’s co-founder Ben Zyl, “People have become complacent with card dominance - businesses shouldn’t be paying exorbitant fees to receive payments, and customers should have full control and visibility over their money. We’re here to drive change by bringing back the connection between consumers and businesses”.

The startup is set to avail the services to merchants within the year’s first half. The target will be on both in-store and online retailers across Australia.

Pay by Bank option

The pros and cons of conventional credit cards are experienced by both the sellers and consumers. On the one hand, one enjoys convenience and fastness when using this mode of payment. Even so, the applicable fees tend to be high. As such, there has been increasing demand for an alternative payment system that is just as fast and convenient as credit cards but without the embedded cons.

Notably, pay by bank is being embraced as one of the viable alternatives. It offers a secure and direct connection between banks. It is based on the open banking structure that involves consumers allowing a third party provider to access their bank details for the purpose of specific financial services.

Waave’s pay by bank attracts a fee at a flat rate of 28%. As stated by the company, this is about 80% lower than a typical card payment. This is in addition to the instant authorization, absence of chargebacks, and quick funds settlement. Besides, it works will all the banks in Australia and enables customers to make payments for both off-line and online purchases.