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  • Writer's pictureAbhinav Kumar

Why Volume is a Game-Changer in E-Commerce Payments

The author (Abhinav Kumar) is an MBA '22 candidate at London Business School. He is interested in the Fintech space and is curious to understand what differentiates a winning business model from others. He believes in 'Capital as a Catalyst' for accelerating positive changes.

About Volume

Founded in 2021 and based out of London, Volume provides 1-Click checkout experience to online shoppers. Volume connects to customers’ banking app directly and securely retrieves the required information to pay for their online orders in real-time – in just 1 click. The checkout process does not require typing credit or debit card details, emails, or passwords, and is invisible to the customers. It operates by partnering with e-commerce businesses and challenger banks. Below is how Volume sits within the Fintech space.


Simone Martinelli, the co-founder, comes with the relevant background, adding credibility to what the team is building. Having spent 7 years in product management and 4+ years in the payments space in the UK, Simone understands the need for something like Volume to solve the existing problems in the checkout space. His co-founder, Chris Tarnawski, comes with 7 years of experience in software development with large banks and a payment company.

Why should Volume Exist?

Volume solves a problem for both ecommerce merchants and online shoppers. And as the ecommerce market continues to grow at close to 30% worldwide and is a ~ £700 Bn market just in the UK - the opportunity and need for Volume is tremendous.

Broadly, Volume solves the below pain-points in the ecommerce business:

If we dive deeper into the problems, we can understand how Volume enables ecommerce businesses:

Value proposition

  1. Volume enables 5x faster checkout time. Traditional checkouts prompt card numbers, which shoppers might not have handy. Volume fetches these details directly from the customers’ banking app. The customers do not have to enter these details, even at first use.

  2. Volume enables 2x more sales due to fewer cart abandonment, resulting from the removal of manual steps in the checkout process

  3. Volume costs up to 6x cheaper for ecommerce merchants to accept online payments. Card networks are not involved in the process. Hence, the intermediary costs are removed. Volume charges a flat 0.6% fee compared to up to 4% for other payment methods (e.g. wallets and cards)

How is Volume Building its Competitive Advantage?

To understand this, we will first look at the backend payment process that happens in the case of Volume (direct bank transfer) compared to existing card network-based payment methods (illustrated in the flow charts below).

Next we will understand the 2-sided business model:

If we combine the above two concepts, we can see that-

  1. The power of the network increases as more customers use Volume and that feeds into more merchants willing to adopt and promote Volume as a checkout product. This is a classic 2-sided business model which is difficult to build and hence difficult to replicate because it is a time-consuming and costly process.

  2. The novelty of Volume’s solution is that the customers will not be aware that he/she is using Volume’s infrastructure. Hence, the customer acquisition aspect does not exist. This means that Volume has to convince just 1 side of the network – the ecommerce merchants – to promote this payment method over others such as cards, wallets, BNPL, etc. However, this could pose its own challenges, and I discuss this later in the risks section of the report.

Competitive Landscape

There is no comparable company for Volume. However, indirect competitors are the other checkout businesses as shown below. is the closest competitor which I have used below for further illustration on differentiation.

Diving deeper into Fast as the closest competitor. Unfortunately (or fortunately for Volume) Fast is shutting down as it ran out of money.

Revenue Potential & Valuation

I have tried to triangulate the revenue potential for Volume over the next 3 years via 2 top-down methods. In both the methods I assumed that Volume is operational only in the UK.

  1. The first method is based on the idea of how many Neo-banking customers in the UK will use Volume; the rationale being - Volume partners with Neo-Banks which defines its addressable customer base in the first few years.

  2. The second method is based on the idea that Volume will first take market share from current payment flow via bank transfer method at the time of checkout; the rationale being – Volume makes the bank transfer process much better by removing the step required to input personal and financial details

Using the above two methods, I arrive at ~ £100 Mn revenue at the end of 3 years. Detailed calculations are shown below:

Method 1: Using Neo-banking market size method

Method 2: Using e-commerce market share method

To assign a suitable revenue multiple, I used precedent transactions of comparable companies. Using this, we arrive at 18x revenue multiple.

Based on the above calculations, if we believe that Volume can hit £100 Mn revenue in the next 3 years then assigning 18x revenue multiple yields £1.8 Bn valuation potential. Note that expanding to other European countries can push the valuation estimate upwards.

Future Diligence

  1. Checkout placement: Will merchants promote this checkout option? Potential it may get lost within many other checkout options.

  2. Merchants’ acceptance: Are merchants willing to let go of extra fraud control, loyalty programme, and benefits from BNPL options for the 1-click checkout option?

  3. Ease of replication: Why, Fast, and Bolt could not add this additional feature to their stack and succeed?

  4. Monetisation potential: What other apps can it build to extract more from the merchants? This will also help Volume to switch customers from other checkout methods.

  5. Competitive intensity: Pressure on interchange rates and final verdict by Mastercard and Visa on the topic of interchange hike. If hikes are not made, then Volume’s offering will be less attractive.

What can go wrong?

  1. Pricing pressure: Bank transfer is mostly free and with more competitors, it would be difficult to charge 0.6%. Further pressure if Visa or Mastercard reduces its fee.

  2. Lack of open-banking APIs: These APIs are not easily available outside Europe and hence product-market-fit will be a challenge, resulting in slower scale-up outside Europe.

  3. Threat from BNPL: BNPL claims to increase sales for the merchants, and it is a proven value add on a large scale. Compared to that 1-click checkout (connecting via banks directly) is a new method and mass scale validation is still lacking.

  4. Lack of value-added offerings: Other payment gateways provide value-added services such as reporting, analytics, and loyalty programmes. Volume may need to provide all those features for rapid adoption and to help merchants switch to Volume. This could make it a much longer process.

  5. Lost in the crowd: A merchant can have multiple 1-click checkout options on the payment page. Hence, it would be difficult for Volume to differentiate from the competitors.


Based on my preliminary research, I believe Volume is an opportunity worth a more detailed look. Volume seems promising because it solves a well-defined problem in a large addressable target market, has a highly scalable solution and offers unique value propositions. Although the open-banking space is crowded, Volume has picked its niche to land and expand in the merchants’ network to capture value in the e-commerce market.


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