Silverflow, a Netherlands-based startup established by former employees of Adyen, is publicly announcing its initial seed funding round.

For the past two years, this company, prior to its public launch, has been developing what it characterizes as a “cloud-native” system for processing online card transactions, establishing a direct link to card networks. The intention is to deliver a contemporary alternative to the payment card processing technology, largely in operation today, which is between 20 and 40 years old.

The €2.6 million seed investment in Silverflow is led by Crane Venture Partners, a venture capital firm located in the U.K., and includes contributions from Inkef Capital, as well as unnamed private investors and prominent figures from companies such as Pay.On, First Data, Booking.com and Adyen. This brings the total funding received by the fintech startup to approximately €3 million.

Founded while undergoing development and launching in 2021, Silverflow is led by CEO Anne-Willem de Vries, who previously focused on card acquiring and processing at Adyen, CBDO Robert Kraal, formerly the COO and EVP global card acquiring & processing of Adyen, and CTO Paul Buying, the founder of Livewords, a translation startup that was later acquired.

“An overhaul of the payments technology infrastructure is necessary,” Kraal explains. “The current card payment infrastructure, built on technology dating back 30 to 40 years, remains prevalent throughout the global payments ecosystem. This outdated infrastructure creates inefficiencies and costs for all parties involved: consumers, merchants, payment-service-providers and banks. These legacy platforms involve a prolonged onboarding process and are costly to maintain, [and] they also lack the capabilities required to effectively utilize data.”

Kraal further notes that incorporating new features is a complex and expensive undertaking, demanding the expertise of specialized engineers, which ultimately hinders innovation “across the entire card payments system”.

“Furthermore,” adds de Vries, “each acquirer provides its clients with a distinct processing platform, meaning that a typical payment service provider (PSP) must manage multiple legacy platforms – and all the associated costs and specialized support.”

Silverflow asserts it has created the first payments processor featuring a “cloud-native platform” designed for modern technology stacks. This includes offering straightforward APIs and “optimized data flows” that integrate directly with card networks.

De Vries elaborates: “Rather than managing a complicated network of acquirers across different markets, with numerous bank and card network connections to maintain, Silverflow delivers card-acquiring processing as a service, connecting directly to card networks through a simplified API.”

The company’s target clientele includes PSPs, acquirers, and “major global merchants” processing between €500 million and 10 billion in annual transactions.

“As a managed service, Silverflow handles the upkeep of connections and the development of new product features that users would typically need to support internally or plan for over extended timelines with suppliers,” Kraal clarifies. “Being cloud-based, Silverflow offers virtually limitless scalability to accommodate peak transaction volumes and also provides detailed data insights that users have not previously had access to.”

Regarding competition, Kraal states that, to their knowledge, no other companies are currently pursuing a similar approach. Currently, acquirers rely on traditional third-party processors, such as SIA, Omnipay, Cybersource or MIGS. Certain companies, like Adyen, have developed their own internal processing platforms.

De Vries suggests that a lack of understanding of the issue may be one reason why a cloud-native card processing platform like Silverflow hasn’t been developed sooner.

“Unless you have experience building integrations with acquirers, you may not realize that infrastructure 30 to 40 years old is still in widespread use. This isn’t a problem typically addressed by recent university graduates,” he suggests.

“Secondly, successful development of this requires prior experience within the card payments industry to navigate the complex legal, regulatory, and technical requirements.

“Thirdly, any large organization currently involved in card payment processing would be aware of the problem and possess the necessary industry expertise. However, creating a new processing platform would necessitate dedicating their most skilled personnel to the project for two to three years, diverting resources from existing initiatives. Additionally, they would need to manage a complex migration process to move their current customers to the new system, potentially risking customer attrition.”