SumUp offers Australian small businesses more ways to close the deal

Leading global fintech SumUp launched its ecosystem of business tools for small and medium enterprises (SMEs) in Australia in August 2023. Australia’s thriving small business sector was a particular attraction.

‘Looking at the number of new companies being registered, we saw an opportunity to offer those small and micro-businesses greater choice,’ says Malcolm Areington, SumUp’s Managing Director in Australia. ‘Australia also has a mature financial market with a supportive fintech ecosystem that’s welcomed us.’

Austrade’s assistance eased SumUp’s entry into the Australian market. ‘Austrade’s support has been invaluable,’ says Areington. ‘I feel as if I can ask them anything. Austrade’s advice and guidance has helped SumUp Australia navigate important local nuances.’

Mature financial market

SumUp offers a complete ecosystem of business tools including point-of-sale hardware and software for companies to use and accept all methods of payment. What started out as one card reader has turned into a range of readers and multiple remote payment solutions such as invoices, gift cards, payment links and more. SumUp now operates in 35 countries.

SumUp had been looking at opportunities in Australia for some time.

‘Since 2016, we’ve seen an explosion of fintech innovation in Australia,’ says Monika Slavova, SumUp’s Strategy Manager for Global Expansion. ‘There are now around 800 fintechs operating in the market. Many international players are taking advantage of Australia’s fintech ecosystem.

‘Australia is attractive to us because it’s a mature market. Its similarity to UK and US financial markets also made it an ideal base in the Asia-Pacific region.’

Building trust with small business clients

Australia also has an active card payments market. Growing card payment usage in Australia has meant a rapid shift for many small and micro-businesses. In 2022, 75% of all consumer payments in Australia were made using a debit or credit card, up from 26% in 2007 (Source: Australian Banking Association, Bank On It: Consumer Trends 2023, June 2023). From food trucks to yoga teachers and tradespeople, most businesses now need to offer some form of electronic payment.

With the SumUp name relatively new to Australia, gaining customers’ trust is essential. ‘Businesses need to be confident that if they use any of our business tools and services, the transaction will work simply, and they will get paid quickly,’ says Areington.

‘Processing costs are also a major consideration for small businesses. Getting businesses that traditionally relied on cash or bank transfers to see the value of digital payment systems can also be a challenge.’

SumUp believes its simple pricing plans and no hidden-fees model will appeal to new traders, SMEs and those who have irregular patterns of transactions. The model suggests clients can see benefits from improved cash flow and reduced administrative overhead. This compares to sending out invoices and waiting for funds to be transferred.

‘We see a trend in our data where merchants tend to grow their sales by about 30% year on year after they start using SumUp,’ notes Slavova. ‘That’s important for us because as they grow their needs become more sophisticated, and we need to be able to support them.’

The practical benefits of the A-UK FTA

Areington recognises the value of the Australia-UK Free Trade Agreement (A-UK FTA) for the fintech industry. The FTA promotes cooperation on regulatory matters that goes further than provisions under the Australia-UK Fintech Bridge established in 2018. It includes a world-first Innovation Chapter.

‘Fintechs expedite a fast-moving life cycle through innovation,’ says Areington. ‘Fintechs create innovation through new ideas and services, where regulators refine it over time. This in turn creates new opportunities. The FTA has a key role to play.’

How Austrade helped

Austrade had been assisting SumUp for around 18 months before the company launched in Australia.

‘It is hard to understand the market from the other side of the world,’ notes Areington. ‘That includes understanding Australia’s local card scheme Eftpos – Australia’s go-to payment system since 1984 – and the wide range of card products. We also need to know about compliance with data security, anti-money laundering and other regulations.’

As a new entrant into the market, Austrade’s introductions to Australian fintech networks have also been valuable. ‘I’ve found the fintech community very helpful,’ says Areington. ‘Most of the fintech community appreciate each stage of the learning curve and are forthcoming in sharing their experiences. Ultimately, we knew we needed a local presence to build trust in the SumUp Australia brand.’

Austrade’s Senior Trade and Investment Adviser Gaurav Johri explains: ‘Australia has been modernising its financial system to encourage innovation and boost competition. We have developed an open data framework (Consumer Data Right) and reformed our payments sector.

‘It is great to see a leading global fintech like SumUp take advantage of this by bringing its solutions to assist micro-SMEs. This group often finds it hardest to access financial innovations.’

Attracting local talent in Queensland

SumUp is still settling into its Queensland location but is already in talks with universities about graduate opportunities.

‘Queensland has great infrastructure,’ says Areington. ‘There are other fintech and technology companies setting up here. We think being on the Sunshine Coast can help us attract local talent who want to stay in the region and who are excited about coming on the journey with us.’