Tech Transformers

Adyen launches service to help Facebook, Uber get millions back in lost revenue


A start-up has launched a product aimed at helping the likes of Uber and Facebook recoup millions of dollars in lost revenue from failed debit and credit card transactions.

Around 85 percent of all worldwide e-commerce credit card transactions are approved. The remaining 15 percent is revenue which is lost to the world's biggest companies.

This is where Adyen, a Dutch start-up valued at $2.3 billion, comes in. Its clients include Facebook, Uber and Spotify.

The firm has launched a product called RevenueAccelerate which it claims has helped the organizations that piloted the feature to generate an average annual return of 1.43 percent.

Of the 15 percent of transactions that fail, 10 percent is declined for legitimate reasons, such as insufficient funds, whereas 5 percent is caused by flaws in the system, due to the complex nature of clearing a card payment. RevenueAccelerate is designed to turn this 5 percent of failures into revenue for merchants.

"If you look at Facebook, Uber, Spotify, if you can get 1.5 percent revenue without doing anything, that is very relevant as you get more revenue and it eliminates frustrated shoppers," Pieter van der Does, chief executive of Adyen told CNBC ahead of the Money 2020 fintech conference in Copenhagen.

Valuations off fair value

Adyen is one of Europe's biggest "unicorns" - start-ups valued over $1 billion - but it's likely many would not have heard of the firm. Last year the company snagged a $2.3 billion valuation after Iconiq Capital, a highly secretive wealth management firm that manages investments for the likes of Facebook boss Mark Zuckerberg, LinkedIn CEO Reid Hoffman and Twitter CEO Jack Dorsey, invested in Adyen.

Questions over the level of valuations of private technology start-ups have also been raised over the past few months, with some investors concerned that many companies could fail this year. Van der Does echoed concerns over valuations when asked if the company was pursuing any acquisitions to help it expand further.

"Acquisitions are difficult for us at this moment. Market valuations are way off from fair value," Van der Does said.

"We are benefitting so much from having a platform not the result of acquisitions and instead have built one thing from the ground up."