UK’s open banking startup Kikapay becomes the latest fintech to go under
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While the UK’s open banking scene is continuously growing bigger and stronger, the changing economic conditions are still making it challenging, and numerous startups have failed to stay afloat. The most recent example is Kikapay, an early startup in the UK’s open banking scene, which just went under.
Kikapay fails due to market difficulties
Kikapay has been around for about six years now, after being founded in 2018. The company used open banking to establish connections between businesses’ customers and their banks. The goal was to help initiate immediate single payments as well as fixed recurring payments.
Since its inception, the operation has managed to raise around 580,000 GBP. However, the startup’s last funding round brought in an undisclosed amount three years ago now, in February 2021.
Despite its efforts, however, the startup failed to establish itself and find a foothold in the current market. Its co-founder, Philip Godden, recently published a farewell message on LinkedIn, wishing good luck to all those who remain in the sector and who are continuing the battle to establish open banking, both in the UK and beyond.
Godden added that he still believes that open banking is the future of payments, but he points ut that it is still a long way away. This is supported by the fact that open banking startups have been put in a position where they are failing due to the challenges of the current market.
Kikapay’s closure also came after mid-year reports revealed that open banking-enabled payments topped 11.4 million GBP in July 2023.
In its own post on LinkedIn, the company wrote that Chris and Philip, the two co-founders, would like to thank everyone who helped the company on its journey.
The UK continues to develop the open banking sector despite challenges
Kikapay’s demise is far from the only example, as only last week, the same happened to a business app Paysme. This firm’s CEO, Derek Stewart, also stated that the tough macroeconomic situation is the main reason for the company’s demise.
While Kikapay’s journey did come to an end, the UK’s fintech sector is still successfully leveraging open banking technology. This has allowed the UK to be one of the global leaders in innovation, and the country is very much interested in advancing its fintech sector further and cementing its position as its leader, not only in this part of the world but on a global scale.
With open banking allowing users to make better-informed decisions and improving their access to financial services, many agree with Godden in thinking that this is the future of finance.
