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Exclusive: Amid payments fee price war, Helcim raises $20M

Feb 26, 2024
Illustration of hundred dollar bills on cell phones spread out.

Illustration: Aïda Amer/Axios

Helcim, a payments company offering lower and more transparent prices, raised $20 million in Series B funding, it tells Axios exclusively.

Why it matters: The raise comes as pricing competition in the space is heating up and as merchants have been battling payments companies over fees.

How it works: Helcim charges the cost of interchange, plus an 8-cent margin. It says — depending on the card used — its transactions average 1.93% and 8 cents per in-person transaction.

  • In comparison, many major processors charge what is known as a flat-rate for credit card processing: Each transaction is the same price. That results in a more predictable and simple bill, but one that doesn't necessarily disclose the processor's markup.
  • Helcim founder Nic Beique says the company was able to lower prices because it built its payments operations in-house rather than on top of another processor.

Zoom in: Square says its standard is 2.6% plus 10 cents per in-person transaction. Lightspeed also charges 2.6% plus 10 cents.

Zoom out: Payments fees have become a renewed source of dispute between merchants and payments companies.

  • Just last year, retail giants Amazon, Best Buy, Target, Walmart and Shopify began pushing Congress to pass a bill aiming to clamp down on credit card fees.
  • Similarly, Toast retracted a 99-cent fee after widespread backlash from its restaurant base.

The big picture: Merchants shopping for lower prices last year drove down the stock prices of companies like Adyen.

  • Adyen co-CEO Pieter van der Does said in August: "We could join a price fight. We don't think that's the right strategy."
  • That came after PayPal's Braintree cut prices on its payments services a year earlier.

Pismo and Acorns investor Headline led the round and was joined by investors including Clocktower Ventures, Vesey Ventures and SilverCircle.

  • "It's been a long time since we've had substantial change in the SMB-payments space," says Headline partner King Goh, noting Block and PayPal were founded over a decade ago.

State of play: The company targets SMBs with $500,000 to $2 million in annual transaction volume.

  • Square has also sought to move upmarket into sellers having over $500,000 in annual volume, with 40% of its GPV coming from such companies last year.
  • "Lower payments cost is the wedge," says Headline's Goh, who notes the company is adding business management software for this market of larger SMBs.
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