Payments start-up Zeller growing ‘at a faster rate than Afterpay’, says CEO Ben Pfisterer

Fintech start-up Zeller says it has signed up more merchants in eight months than Afterpay did in three years.

Zeller co-founder Ben Pfisterer: ‘For all intents and purposes we shouldn’t be growing at that clip, so we’ve been incredibly pleased and it shows the opportunity and the gap in the market that we are tackling.’

Melbourne-based payments company Zeller says it is on track to surpass Afterpay’s three-year merchant sign-up volume in just eight months, with demand for its next-generation Eftpos solution skyrocketing as Melbourne and Sydney businesses return to ­normal.

Zeller, which raised $50m in a funding round in June and is led by ex-Square executive Ben Pfisterer, said it had now signed up more than 10,000 businesses onto its books, and was growing at a faster clip than that of buy now, pay later market darling Afterpay. Afterpay is set to be acquired by Square in a $39bn deal the companies hope will close in the first quarter of next year.

Mr Pfisterer said that despite the uncertainty caused by lengthy lockdowns across Australia, Zeller’s growth had boomed alongside a small business recovery, with payments through the company’s Zeller Terminal increasing by 103 per cent month on month.

“We are seeing great growth rates and we’ve been surprised and pleased, particularly when we talk to our US-based investors, and they read about the lockdowns we’ve gone through,” he said.

“For all intents and purposes we shouldn’t be growing at that clip, so we’ve been incredibly pleased and it shows the opportunity and the gap in the market that we are tackling.”

Businesses were switching their payments technology not only from the big four banks but also from rival outfits such as Square, Mr Pfisterer said, given fast-growing businesses were now demanding all-in-one solutions like those provided by Zeller.

Zeller offers an alternative for business banking for small businesses and is launching an App Marketplace this month, along with a direct integration with Xero coming late next month.

“We first started during Covid, and we thought we couldn’t have timed it better in terms of being a great product for new businesses coming on,” Mr Pfisterer said. “But actually our thesis was a bit wrong. Over 80 per cent of businesses are actually switching over to us, and it shows the products out there just aren’t meeting the demand by any stretch.”

Zeller is now eyeing an international expansion, and plans to become an APRA-regulated bank. The company to date has raised a total of $81m – most from US-based venture capital outfit Spark Capital – and it now has more than 120 employees, including 70 in Melbourne. It was recently a featured innovator in The List: Australia’s Top 100 Innovators in The Australian.

“We’re busily working on plans for new markets, and we absolutely have been given a lot of feedback that the problem we are solving here in Australia exists in many markets. So globalisation is a big part of our road map,” Mr Pfisterer said. “It’s probably coming ahead of schedule.

“We have built a lot of our infrastructure ourselves and, although people say there is a war for talent, we haven’t found too many problems with that because I think people gravitate towards the big audacious nature of what we are trying to do. We have pretty much an unlimited hiring schedule ahead of us, and hiring seems to be getting easier as we scale up.”