Founded in 2012 by two former Google employees, SumUp is one of the world’s fastest-growth mobile payment companies. It services multinational corporations to global franchises.
SumUp makes its money by charging merchants for each transaction they perform through their platform.
SumUp operates on an affiliate marketing model. It charges merchants fees whenever someone uses its app to purchase something from them.
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About SumUp
For small businesses, entrepreneurs, and anyone trying out their hands at the gig economy, accepting payment methods in various forms can be a big deal.
SumUp is a financial technology (fintech) payment company that helps small business owners accept payments and requests for funding.
Its mobile app makes it easy for merchants to accept card transactions from anywhere. It’s no surprise why its popularity has been growing so quickly.
Since its founding in 2012, SumUp (formerly known as Moneybookers) has expanded to include various countries including Austria, Germany, Poland, the UK, the US, and others.
Business Model of SumUp
SumUp has a solid revenue-sharing strategy that allows them to generate consistent cash flow from its customers purchases.
SumUp doesn’t sell traditional goods or provide any kind of service at a physical store. There is no requirement for a warehouse or office space for people working for SumUp. Instead, they operate on a per-transaction basis, taking a flat fee for every transaction. They help to process payments for both clients and customers without requiring any upfront fees.
They give people the chance to accept payment online and from almost any device. With SumUp, you can add a credit processing service and/or chip readers to your phone so you can start accepting remote and mobile transactions.
For SumUp customers, a flat charge is applied to all credit/debit card purchases regardless of the amount charged and regardless of which kind of payment method (credit/debit) was used in the purchase.
They charge a fixed per-transaction price for every transaction they handle. Knowing their pricing structure can give you an idea of whether the company is right for you and/or your project.
Features
Since its founding in 2012, SumUp has since grown exponentially with the expansion of the Gig Economy around the world.
With SumUp, accepting payments has never been so easy. You can now easily start taking your business and/or ventures seriously by starting to make sales and attract new potential customers.
Among the most notable features that set SumUp apart from its competitors are:
- SumUp is available worldwide except for China and North Korea.
- SumUp is one the most affordable payment processors, as the most expensive piece of equipment they sell for direct purchase is approximately $19 USD (for their cheapest package).
- With the SumUp Processing Unit, there are no surprises. You know exactly what your charges will be before you even start using them. There are no hidden fees, no surprise charges, and no guesswork involved.
- With SumUp, there are lots of different methods by which you can accept payments, which makes it ideal for any business owner or entrepreneur.
- You can also create an inventory management system using your smartphone, which allows you to add multiple products at once before making a purchase.
Besides offering these additional benefits, SumUp has several advantages over competing for point-of-sale systems and contracts.
- SumUp is affordable, which makes it ideal for people just starting out in eCommerce. You can start using SumUp for as little as $20 per month, and that includes the cost of the SumUp software and the chip reader required to sell. After you’ve bought the SumUp device, you can accept credit card payments from Google Pay and Apple Pay too.
- SumUp makes it easier for companies to use modern payment methods by replacing old, cumbersome POS systems with simple apps.
- You can also use SumUp to send out SMS messages containing payment link buttons, which makes it even easier to receive payments from your customers.
- SumUp can be used for sending invoices, requesting key payment transactions into a specific virtual terminal (e.g., PayPal), and working with digital wallets to receive and request payment from them.
It is also important to think about some of the drawbacks of using SumUp, including:
- Traditional point-of-sale (POS) terminals and payment processors are ideal for small and mid-size businesses. However, they aren’t appropriate for larger companies because they don’t offer enough functionality.
- It’s important to keep in mind that SumUp doesn’t include any extensive software solutions or tracking or inventory management services.
Target Audience
SumUp is perfect if you’re an individual entrepreneur who wants to sell digital goods online or if you want to accept credit cards from small local merchants. It has a mobile app and no monthly fees.
SumUp aims at helping small businesses and startups get started by providing them with tools to help manage their finances.
SumUp also works well for entrepreneurs who want to accept credit card transactions anywhere, as long as they’re connected to the web.
SumUp is perfect if you’re just starting out in retail or eCommerce, no matter which niches or industries you represent.
Overall, SumUp is definitely built for merchants who want to sell online. With its help, small business owners can improve their sales and profits by overcoming various obstacles and limitations.
How Does SumUp Make Money?
Because SumUp is an affordable point-of-sale solution, it’s no surprise how they generate revenue for themselves.
Transaction Fees
SumUp currently earns most of its revenues from transaction fees. However, it does generate some profits on the hardware and software that is purchased. At $19 per month, SumUp offers one of the lowest transaction fee rates for merchants.
SumUp makes money through its flat processing fees and rates charged to merchants who choose to use the Point Of Sale (POS) system to accept their own payments.
They offer an incredibly simple pricing model that makes it easy for anyone to start selling their products without feeling overwhelmed by complex pricing structures.
There is a 1.5% charge for every credit card transaction that is accepted and processed by PayPal. These transactions include chip cards, swipes, and contactless transactions.
For online transactions, a $0.30 per sale plus a 3.25% credit card processing charge is required.
With the use of the Sumup app, you can send unlimited invoiced at no charge. An additional 2.90% processing charge plus $0.15 per invoice is charged to complete and settle invoiced through SumUp.
Card Reader Sales
SumUp charges a single upfront payment for its device-agnostic card readers.
SumUp has grown its revenues by selling different versions of its card reader. They sell one for $19, another for $59, and so on.
SumUp Funding, Valuation, and Revenue
As of 2018, SumUp had estimated annual revenue of over $117 million, compared to $28 million in 2017.
Currently, SumUp (formerly known as Zimride) has raised $1.4 billion from 23 different venture capitalists and private equity firms. Most recently, both Oaktree Capital Management and Goldman Sachs invested in the company.
Is SumUp Profitable?
SumUp is a successful business. It currently focuses on growing its revenue by increasing its user base and enhancing its service offerings to its current customer base of small businesses.
According to SumUp’s CEO, they are the first company to reach profitability throughout the entire mobile payments industry. In 2016 alone, they were close to reaching $100 million in annual revenues.
Today’s growing mobile payments market and remote payment processors show there’s plenty of potential for the company.
Conclusion: How Does SumUp Make Money?
Now that we’ve covered everything about SumUp, let’s summarize our findings.
They made some smart moves that helped them grow their business. Their merchants are increasing every day because of innovative payment solutions.
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