The app taking the pain out payments for the self-employed

Three former colleagues have teamed up to launch a revolutionary payment app to help the self-employed run and grow their businesses. 

Launched last year by Israelis Noam Nevo and Alon Zion, together with British-Israeli Daniel Scott, Osu is transforming the way the self-employed accept and manage their payments, enabling them maximise their time and earnings.

Akin to a virtual PA, the app works behind the scenes to automate tasks such as as sending invoices, accepting payments and chasing customers – the traditional pain points for many. 

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Osu, which means ‘push’ in Japanese, does not charge transaction fees, meaning users get 100 percent of every sale they make and everything is done instantaneously so they aren’t left waiting days to receive their money.

CEO Nevo, a former PayPal tech lead, says: “With more than four million self-employed professionals in the UK – almost half of whom operate entirely alone and cite chasing payments as one of their biggest daily frustrations – we spotted a gap in the market for a payment support app that could simplify the day-to-day hassle of getting paid by customers and eliminate transaction fees. The Osu app allows self-employed professionals to get fully paid, fast.” 

Osu helps sole traders manage their finances

This is something Nevo acknowledges is increasingly important at a time when the self-employed are already taking a hit due to the pandemic. And he is not alone in seeing the potential.

The app recently closed a £2.25 million seed round, led by early-stage experts Creandum, backers of Spotify, Kahoot and Klarna, to help it grow ten-fold this year from 1,000 to 10,000 customers. It has also received funding from a series of prolific Angel investors, including Charles Delingpole of ComplyAdvantage, Will Neale of Grabyo and Michael Pennington of Gumtree. 

Nevo and Zion – the former finance director of Matomy Media – had worked together as co-founders of a money transfer system for financial institutions, which Scott, a seven-year veteran of The Boston Consulting Group, joined later on. But, aware of the difficulties faced by freelancers when it comes to payments, they saw the need for a streamlined tool focusing solely on the self-employed. 

“I understood the importance of tracking and managing finances within a start-up and how losing sight of payments can quickly affect general day-to-day operations,” recalls Nevo. “The constant chasing and management of this process pushed me to create a better approach.”

Noam Nevo

Subscribers can increase their bottom line in the first month. And those with annual sales of £25,000 taken by card payments, will save £500 on transaction fees and 10 hours in reduced management and admin time per month.

The self-employed are key to getting the economy moving again, but the sector was left particularly exposed during Covid. 

“For every positive story about a thriving self-employed business or start-up, there is another about someone struggling to survive,” says Nevo. And the struggles are reflected in the statistics.

The number of solo self-employed – sole traders with no employees – in the UK dropped by five percent compared with 2019, including a fall of eight percent in construction and building, 20 percent in road transport and 11 percent in teaching and education professionals. Many have been unable to access benefits such as sick pay, holiday allowance, income protection or mental health support. 

“The lack of support has been further highlighted, with up to three million self-employed being unable to claim grants under the Self Employment Income Support Scheme (SEISS). As many as 1.5 million have gone for almost 12 months without financial aid, leading to escalating debt levels.

Osu founders (L-R) Daniel Scott, Noam Nevo and Alon Zion

“It’s incredibly important the self-employed – when they can get back to ‘usual’ operating levels – can maximise the time they spend on customer work. They can’t afford to lose this time to invoice management, chasing late payments or wading through other distracting business admin.” 

According to Nevo, more than half of the solo self-employed earn less than £300 a week, compared with just one third of employees. 

“This emphasises how important it is that if you’re self-employed you should be able to get paid without it costing you time and money.” 

Osu’s head office is in London, while the research and development team is in Tel Aviv. Why target the UK market?

“The UK is the most advanced fintech market in the world. It is at the forefront of Open Banking regulation and has a payment infrastructure that makes offerings like ours possible. This, coupled with the size of the UK market, made it a natural choice for us. “

According to data from the Organisation for Economic Co-operation and Development, the UK ranks towards the top half in terms of the self-employment rate. This position, rather than appearing in the top five or 10, reflects the relative stability of the UK economy versus countries that have very high rates of self-employment such as Colombia and Greece. Israel is not far behind the UK. 

But what is “most interesting” says Nevo, “is the very low rate of self-employment in the US. The US is by far the largest market when it comes to absolute numbers and spend on payment and business management tools. As the self-employment rate in the US grows, the growth in absolute numbers is astounding – and it’s why you see so many start-ups going after the US market. For us, the US is a market we would like to serve in the future but, like Israel, there is no Open Banking regulation in place.” 

In the meantime, the team is focused on developing the app and introducing new features such as direct communication with customers, calendar integrations, bookings and mini-steps to help users generate an online presence – tools Nevo acknowledges could help see the number of self-employed overtake the number of employed in the next few years. 

www.payosu.com

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